A row has broken out among brokers and lawyers on market proposals to set up D&O captives.
A leading insurance lawyer this week called for the establishment of captives to alleviate the current crisis in the D&O market.
But a Marsh spokesman warned that the feasibility of setting up D&O captives needs to be examined more thoroughly.
Speaking at a seminar staged by leading law firm Herbert Smith, partner Stephen Hancock said captives were a viable means of securing much-needed D&O cover.
"Setting up captives is very useful in making up the shortcomings in the D&O market," he said.
Hancock said the recent Wickes trial, where members of the board had to resort to legal aid because of insufficient D&O cover, was evidence of the need to set up captives.
But managing director of Marsh's FinPro practice Roy White argued for caution.
"The use of captives needs to be discussed - you have to be sure you have the appetite for carrying higher deductibles," said White.
Brokers are currently facing problems finding affordable D&O cover for clients with premium increases of between 300% and 400% common.
A study published by law firm CMS Cameron McKenna this week concluded that 45% of 200 directors surveyed were not familiar with their D&O cover.
