D&O policy must pay for defence costs, appeal court rules
A federal appeals court has upheld the Houston court ruling that Lloyd's must pay the defence costs of alleged swindler Allen Stanford's his former chief investment officer Laura Holt, and former accounting executives Gilbert Lopez and Mark Kuhrt, Reuters reports.
The appeals court on Monday upheld US District Judge David Hittner’s ruling but also sent the case back to the district court for additional arguments on the coverage question. Lloyd's must pay in the meantime.
"The underwriters are enjoined from refusing to advance defence costs as provided for in the D&O policy unless and until a court 'determines in fact' by clear and convincing evidence ..." that money laundering occurred, the ruling said.
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