The suite provides financial fidelity insurance solutions that complement a financial institution's management and professional liability program.
PRODUCTS: Financial Institution Bond for Banks; Financial Institution Bond for Insurance Companies; Financial Institution Bond for Broker-Dealers; Financial Institution Bond for Investment Companies; and Financial Institution Bond for Fiduciaries of ERISA Plans.
COMPANIES: Federal Insurance Company; Chubb Insurance Company of New Jersey (New Jersey domiciled risks only); Chubb Custom Insurance Company (surplus lines only).
BEST RATING: A++
AVAILABILITY: Appointed agents and brokers only.
FOCUS: Chubb has introduced five new fidelity bonds to modernize its product suite of Financial Institution Bonds. The suite has been designed to provide financial fidelity insurance solutions that complement a financial institution's management and professional liability program.
Chubb is the largest underwriter of fidelity in North America according to the Surety and Fidelity Association of America, a position held since 2001.
COVERAGE DETAILS: Each bond is designed to address the increased operational risk faced by financial institutions from a host of emerging risks, as well as regulatory and compliance requirements.
In addition to traditional exposures like employee dishonesty, the suite addresses the increasingly frequent risks financial institutions face, including the theft of funds caused by unauthorized access into the firm's computer system, fraudulent funds transfer instructions, and the social engineering of customers, executives and vendors.
“Financial institutions need modernized insurance coverage to address a range of risks associated with sophisticated computer, funds transfer, and social engineering fraud schemes," said Ayo Oshodi, vice president, fidelity product manager, Chubb North America Financial Lines. “Our new and updated fidelity products address these needs by combining time-tested fidelity bond coverage with contemporary coverage to produce a robust financial fidelity insurance solution that complements a financial institution's management and professional liability program."
Coverage highlights include the following:
- Financial Institution Bond for Banks: Provides an updated and modernized banker's blanket bond that keeps the 21st century financial fidelity risk concerns of banks and non-depository financial institutions at its forefront.
- Financial Institution Bond for Insurance Companies: Provides insurance companies with a straightforward financial fidelity insurance solution for their complex financial and regulatory risks.
- Financial Institution Bond for Broker-Dealers: Provides fidelity bond coverage to entities registered as broker-dealers in accordance with the fidelity bonding requirements set forth under FINRA Rule 4360. There is no aggregate limit of liability applicable to mandated coverage and the ability to include optional coverages, including computer system fraud, fraudulent funds transfer and social engineering fraud.
- Financial Institution Bond for Investment Companies: Serves registered investment companies by providing coverage for loss resulting from larceny or embezzlement by employees as required by the Rules and Regulations of the Investment Company Act of 1940 (Rule 17g-1). Coverage limits meet the minimum required pursuant to Rule 17g-1 with no reporting requirement.
- Financial Institution Bond for Fiduciaries of ERISA Plans: Provides coverage to insured Employee Retirement Income Security Act (ERISA) plans for losses resulting from fraud or dishonesty committed by a covered employee of the fiduciary, as set forth in the bonding requirements of the ERISA.
TARGET: Chubb's Bank Bond targets commercial banks, trust companies and finance companies. Chubb's Insurance Company Bond targets property-casualty insurers; life, health, and annuities insurers; and reinsurers of all types.
COVERAGE TERRITORY: Chubb offers Fidelity Bonding coverage to customers domiciled in the U.S. and Canada, responding to loss sustained anywhere in the world.
COVERAGE AVAILABILITY: Currently available in most U.S. states and Washington, D.C., on an admitted basis.
CONTACT: Ayo Oshodi, vice president, fidelity product manager, Chubb North America Financial Lines; 212-801-4250.
Will Jones is IA editor-in-chief.