How did the enactment of ERISA change the professional liability insurance industry? -
️️Fiduciary liability existed before ERISA. However, this type of insurance was not
offered until after ERISA was enacted. ERISA imposed guidelines that increased the
potential liability of fiduciaries of ...
RPLU Fiduciary Liability Insurance Exam
12
How did the enactment of ERISA change the professional liability insurance industry? -
✔️✔️Fiduciary liability existed before ERISA. However, this type of insurance was not
offered until after ERISA was enacted. ERISA imposed guidelines that increased the
potential liability of fiduciaries of employee benefits plans. Consequently the need for
this insurance emerged.
A person or organization is a fiduciary if that person or organization holds the
confidence or trust of another, especially when that trust surrounds the control of the
other party's assets. - ✔️✔️What is a fiduciary?
Retirement Equity Act of 1984 - ✔️✔️Created spousal rights to pension benefits
through qualified domestic relations orders (QDROs) in the event of divorce and through
pre-retirement survivor annuities
What is a purpose of ERISA? - ✔️✔️Provide guidelines for creating and administering
employee benefits plans
What is a purpose of ERISA? - ✔️✔️Define the standards of conduct for fiduciaries of
employee benefit plans
What is a purpose of ERISA? - ✔️✔️Prohibit corporate indemnification for fiduciaries of
employee benefit plans
What is a purpose of ERISA? - ✔️✔️Define fiduciary for employee benefit plans
What is a purpose of ERISA? - ✔️✔️Make Fiduciaries of employee benefits plans
personally liable for plan losses
What is a purpose of ERISA? - ✔️✔️Require most fiduciaries of employee benefits
plans to obtain ERISA bonds
NAMED fiduciaries and FUNCTIONAL fiduciaries - ✔️✔️ERISA regulates two types of
fiduciaries:
When property or assets of others are entrusted to a person or organization, that person
or organization assumes a fiduciary role regarding those assets or property. -
✔️✔️What is a fiduciary?
, Exercises any discretionary authority or discretionary control in managing the plan or
exercises any authority or control in managing or disposing of plan assets. -
✔️✔️ERISA's Functional Definition of a Fiduciary
Renders investment advice for a fee or other compensation, regarding any monies or
other property belonging to the plan. - ✔️✔️ERISA's Functional Definition of a
Fiduciary
Has any discretionary authority or responsibility in administering the plan -
✔️✔️ERISA's Functional Definition of a Fiduciary
state, local, or foreign law that governs the plan would likely determine whether a
person or organization is a fiduciary. - ✔️✔️If a plan is not subject to ERISA, then the
applicable..
means, that although the director or officer was not listed as aplan fiduciary, that person
did exercisesome control over those who acted as plan fiduciaries. - ✔️✔️De facto
control
D&O and Fiduciary Liability Insurance Policies. - ✔️✔️The primary risk of duplicate
coverage seems to exist between
D&O insurance cover economic loss that occurs as the result of mismanagement by
corporate directors and officers. - ✔️✔️What type of loss is covered by D&O
insurance?
Judgments, Settlements, Damages (may or may not cover punitive or exemplary
damages), Interest, Defense costs, Attorneys' fees, Other taxed costs. - ✔️✔️What
does a Fiduciary Liability policy typically cover?
Directors and officers of the sponsoring organization. - ✔️✔️Who is Typically Covered
by a Fiduciary Liability Insurance Policy?
1) prudently select the fiduciaries they appoint, or 2) adequately monitor the
performance of those fiduciaries. - ✔️✔️Corporate executives who appoint plan
fiduciaries can be held liable, if they do not:
the actual plan benefits. - ✔️✔️A Fiduciary Liability Insurance Policy usually does not
cover..
1) Losses incurred by the plan, 2) Return of profits made through improper use of
assets, 3) Other equitable or remedial relief dictated by the courts. - ✔️✔️A fiduciary
can be held personally liable for all of the following:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller PatrickKaylian. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.39. You're not tied to anything after your purchase.
