2018 FLA Conference Schedule

7:30 a.m. – 8:45 a.m.
Registration and Continental Breakfast

8:45 a.m. – 9:00 a.m.
Robert Olausen, President The Fidelity Law Association

9:00 a.m. – 9:30 a.m.
Tales From The Crypt: Cryptocurrency Is Here — How Will Crime Insurers Respond?
Once one looks beyond the immense “hype” surrounding cryptocurrency, it becomes clear that cryptocurrency is beginning to form part of the legitimate commercial ecosystem. As Blockchain technology and cryptocurrency continue to mature and proliferate,
an understanding of what they are and how they transfer value becomes essential for the fidelity professional. This presentation describes the fundamentals of cryptocurrencies, how their usage has evolved, and how courts and government regulators have
attempted to deal with cryptocurrency issues. After identifying the steps some carriers already have taken to address cryptocurrency risks, the presentation then canvasses potential loss scenarios involving cryptocurrency, and how these loss scenarios
compare and contrast with traditional fidelity loss scenarios. The presentation concludes by analyzing some of the potential coverage and valuation issues which may arise in a cryptocurrency loss, and by discussing some of the unique challenges that
a cryptocurrency loss can pose.
Chris McKibbin, Blaney McMurtry, LLP
Mark J. Krone, Anderson, McPharlin & Conners, LLP
Emily M. Lukes, Travelers

9:30 a.m. – 10:15 a.m.
ERISA Fidelity Insurance: An Updated Review
While ERISA’s fidelity bonding requirements are imposed by federal statute that mandate protection of ERISA funds from larceny by those who “handle” those funds, ERISA looks to state law definitions of fraud and dishonesty; the bonding requirement is
and has been satisfied through the use of standard commercial crime policies and financial institution bond forms, as modified; and these policies and bonds are overwhelmingly construed and interpreted using a state law, text-based approach, as are
other insurance policies and bonds. Dan White will present an overview of these and other anomalous aspects of ERISA bonding, including case law in which statutory incorporation has been generally rejected, and outline the sources claims and underwriting
professionals and coverage counsel should draw upon to write, understand, determine, and defend the coverage provided. The presentation will then shift to a panel discussion that will focus on recent filings of forms and endorsements made in response
to the Department of Labor’s interpretation and enforcement of the ERISA Bonding Regulations. The panel also will address claim experiences and coverage issues that have arisen over the years.
Daniel W. White, Chiesa Shahinian & Giantomasi PC
Robert Olausen, Insurance Services Office, Inc.
Robert J. Duke, The Surety & Fidelity Association of America
Dolores A. Parr, Zurich North America
Brian O’Neill, Berkshire Hathaway Specialty Insurance

10:15 a.m. – 10:30 a.m.

10:30 a.m. – 11:00 a.m.
The Impact of Digital Technology on Forgery Coverage
Modern consumers expect lenders to offer the convenience and speed afforded by digital technology that enables them to execute loan documents without burdening them with the inconvenience of attending an in-person closing. The convenience afforded by
digital lending creates a degree of separation and anonymity, thereby increasing the risk of fraud. From both a practical and legal perspective, there is a distinct difference between an unprotected email enclosing a scanned copy, and securely executed
and transmitted digital original. This presentation explores the current state of digital transactions, federal and state legislation of digital transactions, and their potential impact on financial institution bond claims.
Scott L. Schmookler, Gordon Rees Scully & Mansukhani, LLP
Katherine Musbach, Gordon Rees Scully & Mansukhani, LLP
Chris Arehart, Chubb

11:00 a.m. – 12:00 a.m.
The Cost of CyberCrime — Understanding the Basics of Breach Response Cybercrime is an ever-growing, almost risk free, method of perpetrating commercial crime, touching entities large and small across a wide range of industries.
Understanding the basics of breach incident recognition and response is critical to managing the fast-moving components of a cybercrime claim. This presentation will focus on cybercrime incident preparedness, as well as the nuts and bolts of the initial
incident response, the forensic investigation that often accompanies a cybercrime response, and the potential operational, data privacy and legal concerns associated with cybercrime incidents. The presentation also will illustrate the components of
a coordinated incident response using real world examples to demonstrate the collaboration between the various players. John Mullen is a co-founder of Mullen Coughlin, LLC. Mr. Mullen and his firm focus their practice on assisting insureds in preparing
for and responding to data privacy and network security events. He regularly presents on data privacy and network security issues for insurers and brokers via national webinar/phone, television conferences and live presentations (AM Best, NetDiligence,
Advisen, ACI, CPCU, RIMS and PLUS), and has been published and quoted as a national expert on cyber/data loss issues in multiple publications. Mullen Coughlin handles over 1,000 responses annually.
John F. Mullen, Mullen Coughlin, LLC

12:00 p.m. – 2:00 p.m.
LUNCH BREAK (on your own)

2:00 p.m. – 2:10 p.m.
Robert Olausen, President, The Fidelity Law Association

2:10 p.m. – 2:40 p.m.
Fidelity Law Update 2018
The presentation will offer a brief overview of the most important fidelity cases that were decided between June 15, 2017, and June 15, 2018. Among the cases to be discussed are several important opinions that offer insight into the meaning of Computer
Fraud and Funds Transfer Fraud coverage. Other key topics that also will be covered include theft and the meaning of “direct.”
Carla C. Crapster, Clark Hill Strasburger
Kimberly Russell, Chubb

2:40 p.m. – 3:10 p.m.
What’s Tort Got To Do With It?
Why do some courts persist in applying the tort concept of “proximate cause” to the interpretation of causation language in policies of insurance when the dictionary definition of such terms would be more consistent with the parties’ own understanding
of their contract? This presentation takes a look at the historical underpinnings of the concept of “proximate cause” and how its utilization has differed over time and under different circumstances. This concept has relevance in the interpretation
of fidelity policies, including commercial crime policies and policies issued to financial institutions, as these policies generally rely on some type of “direct” language, whether it be direct causation or direct loss. The speakers will demonstrate
that the use of the vague and increasingly criticized term “proximate cause” in interpreting an insurance contract is not only inconsistent with the rules of contractual construction, but also historically inappropriate. Given the courts predilection
over time to expand coverage, the inappropriate use of the “proximate cause” standard needs to be countered by a showing that an application of the “proximate cause” standard to insurance policy interpretation is not only incorrect, but contrary to
the true purpose of contractual construction.
Gary Valeriano, Anderson, McPharlin & Conners LLP
Robyn Sondak, Travelers

3:10 p.m. – 3:40 p.m.
Comparing and Contrasting Insuring Agreements (D) and (E)
Insureds frequently confuse and conflate Insuring Agreement D and Insuring Agreement E of the Financial Institution Bond despite the fact that each insuring agreement provides coverage for fundamentally different types of losses. This presentation will
provide an overview of Insuring Agreements D and E, the types of claims these insuring agreements were drafted to cover, the unique requirements for coverage under each insuring agreement, and how these requirements operate to render the coverage provided
by the two insuring agreements mutually exclusive. The presenters also will discuss coverage issues that often arise under Insuring Agreements D and E including an examination of how the courts have addressed these claims. The presenters also will
explore recent arguments that financial institutions are making an effort to avoid satisfying the express requirements for coverage under Insuring Agreements D and E and, thereby expand the coverage provided by these insuring agreements well beyond
their intended application.
Scott Spearing, Hermes, Netburn, O’Connor & Spearing, P.C.
Tim Markey, Great American Insurance Company

3:40 p.m. – 3:55 p.m.

3:55 p.m. – 4:55 p.m.
Panel Discussion: Cybercrime — Prevention, Available Products, Coverages and Claims
As technology continues to invade everyday life, the opportunity for criminals to exploit businesses and consumers worldwide increases. At the same time, the level and sophistication of cyber-attacks continue to rise. This presentation brings together
an unprecedented panel of experts on cybercrime to discuss the myriad of cyber threats facing business and governments, recommended methods of prevention, the varying insurance products and coverages available on the market, and examples of first-party
and third-party claims, from simple hacking, to social engineering, ransomware and data breaches.


Discussion Leader
Michael Keeley, Clark Hill Strasburger

Josh MacDonald, Chubb
Robert M. Flowers, Travelers
Kyle Sawdey, Beazley Group Limited
Toni Scott Reed, Clark Hill Strasburger
Melissa K. Ventrone, Clark Hill Strasburger

4:55 p.m. – 5:00 p.m.
Closing Remarks
Robert Olausen, President, The Fidelity Law Association

Suggested dress for the conference is business casual.