MBIA's D&O Policies Cover Probe Costs: 2nd Circ.

Law360, New York (July 1, 2011, 6:45 PM EDT) -- The Second Circuit ruled Friday that MBIA Inc. deserves coverage from Federal Insurance Co. and ACE American Insurance Co. under two $15 million directors and officers policies for costs related to government investigations and derivative lawsuits over alleged accounting misstatements.

According to the three-judge appeals panel, the government bond guarantor was owed losses stemming from investigations by the New York Attorney General and the U.S. Securities and Exchange Commission for which the insurers had disputed coverage. The plaintiff is also entitled to coverage for the costs of an independent auditor in...
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