2021 FLA Conference Schedule

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

8:45 a.m. – 9:05 a.m.
Welcome and Presentation of Diversity and Inclusion Award
Robert M. Flowers, President, The Fidelity Law Association

9:05 a.m. – 9:55 a.m.
Dissecting a Mortgage Fraud Claim Under Insuring Agreement “E”
The industry has seen a recent increase in mortgage fraud claims. Given the lightning-fast pace of the current real estate market, the rate of such claims is likely to continue to increase. This presentation reviews the facts behind a typical mortgage fraud, including the usual roles of the mortgage company, financing bank, and closing agent, and examines how unscrupulous participants are able to carry out such frauds. The presentation then reviews the requirements for coverage under Insuring Agreement (E) of the standard form Financial Institution Bond, including the types of documents normally covered, the meanings of the terms “original” and “forgery”, as well as the “authorized representative” and “good faith” requirements. It also considers how these requirements for coverage are arguably impacted by business in the modern electronic world, and explores important claims-handling issues..
Matthew C. Kalin, Travelers
Michael Keeley, Clark Hill PLC
Charles Armstrong, Clark Hill, PLC

9:55 a.m. – 10:45 a.m.
Freeze! You Have the Right to Receive Restitution … Maybe: Insurers’ Rights Under Federal Law

Many times, the bad actors responsible for claims against a fidelity bond or crime policy are criminally prosecuted and convicted. As part of the criminal judgment, courts may issue restitution orders against the bad actors. This presentation will address the federal criminal restitution process, the fidelity insurer’s right to restitution, the enforcement of a federal restitution order, and ways that state law may impact the federal restitution process.
Keith Flanagan, Travelers
Ashley Gray, Hiscox
Ryan J. Weeks, Mills Paskert Divers

10:45 a.m. – 11:05 a.m.

11:05 a.m. – 12:05 p.m.
What are Cyber Criminals Planning Next?

From ransomware to business email compromises, cyber criminals are launching attacks daily on all types of businesses. Who are the actors behind the attacks, how do they get into the business of extortion, how
many crime groups are out there, and how can organizations protect themselves from these threats? This presentation will walk through the crime groups that are launching these attacks, the economics associated
with them, and will take us out to many “dark” websites to see how the crime syndicates work.

Bill Hardin, Charles River Associates

12:05 p.m. – 1:15 p.m.
LUNCH BREAK (on your own)

1:15 p.m. – 1:25 p.m.
Welcome Back & Announcements

Patricia A. Ricciuti, The Hartford
Adam P. Friedman, Chiesa Shahinian & Giantomasi PC

1:25 p.m. – 2:15 p.m.
It’s Not a Direct Loss, But Is It Covered Property? The Impact of Direct Loss and Owned/Covered Property Interpretations on Current Fidelity Claims

Despite clear policy wording, some courts fail to recognize that fidelity bonds and crime policies are indemnity policies, not liability policies, and find coverage for losses based on the insured’s vicarious liability for an employee’s tortious acts towards a third party. Courts similarly have found coverage for an employee’s conduct that unintentionally and indirectly causes damage to the insured, or for losses of third-party property neither held by the insured nor for which the insured was responsible before the loss occurred. This presentation will address how fidelity bonds and commercial crime policies are designed to cover direct first-party losses and limit coverage of losses for property not owned by the insured, and the impact that judicial interpretation of “direct loss” and “ownership” provisions have had on current fidelity claims.

Michael V. Branley, The Hartford
Scott S. Spearing, Hermes, Netburn, O’Connor & Spearing, P.C.
Peter C. Netburn, Hermes, Netburn, O’Connor & Spearing, P.C.

2:15 p.m. – 3:05 p.m.
What is “Loss”? The Quantification of Loss

A threshold requirement to potential coverage under a fidelity policy, and one that may be taken for granted, is that the insured actually suffered a loss. Over time, the development and evolution of case law and the language used in fidelity policies created certain basic tenets when evaluating loss. For example, an actual, pecuniary loss – as opposed to a hypothetical or subjective loss to property the insured never owned or held – is typically a prerequisite to coverage. Despite the bedrock principle that the insured must suffer a loss to potentially implicate coverage, the term “loss” is almost universally undefined in fidelity policies. Therefore, numerous coverage issues have arisen – whether the insured actually suffered a loss, when the loss occurred, how to value such loss, and whether the loss resulted directly from the covered peril. In addition, the meaning of “loss” as addressed by a fidelity policy can be significantly different than “loss” as determined by an accountant following American Institute of Certified Public Accountants standards. This presentation will address the evaluation of loss from both a fidelity practitioner’s perspective and from an accounting perspective.

Joseph Collins, Great American Insurance Company
D.M. Studler, SDC CPAs, LLC
Justin D. Wear, Manier & Herod, P.C.

3:05 p.m. – 3:20 p.m.

3:20 p.m. – 4:10 p.m.
Bank Communications and Wholesale Electronic Payment Systems

Money is transferred from bank to bank, domestically and internationally, at a staggering amount each day. This presentation will explain how such transfers have been, are, and perhaps will be accomplished, both in terms of the payment systems used and the communication methods that banks employ to facilitate the transfer. This presentation further addresses what exposures the various players in the process have with respect to money transfers, and the future of money transfers as more and more governments consider digital currencies.

Theresa Biedermann, Berkshire Hathaway
Joel T. Wiegert, Hinshaw & Culbertson
Christopher D. Blum, Hinshaw & Culbertson

4:10 p.m. – 5:00 p.m.
Fidelity Law Update 2021

This presentation will provide an overview of the most important fidelity cases decided between June 1, 2020, and June 1, 2021. Among the cases to be discussed are several important opinions that offer insight into the meaning of the phrase “resulting directly from”, as well as social engineering, computer fraud, and funds transfer fraud provisions.

Gabriel M. Speciale, QBE North America
Delaney L. Beier, Clark Hill PLC

5:00 p.m. – 5:10 p.m.
Closing Remarks
Robert M. Flowers, President, The Fidelity Law Association

Suggested dress for the conference is business casual.