China: D&O liability insurance market take-off still tentative
Source: Asia Insurance Review | Jun 2020
In recent weeks, the Chinese D&O insurance market saw two events which are expected to boost the D&O liability insurance business.
Firstly, China’s revised securities law took effect on 1 March which stipulates increased costs for companies and individuals in the event of regulatory violations such as financial fraud, insider trading and market manipulation.
Secondly, a financial scandal involving Xiamen-headquartered Luckin Coffee broke out whereby the firm was found to have fabricated sales figures by as much as CNY2.2bn ($310m) or 40% of its projected 2019 sales since the second quarter of 2019.
While class action suits are taken out in the US, there is considerable debate over whether insurers should pay out on D&O liability cover which the company had bought. A