1. 1 Directors & Officers Liability Insurance & Disclosure of Information Moscow, November 19th, 2010 Karolina Vogelpohl, Regional Manager Financial Lines CEE

2. 2 Agenda Effects of Information Disclosure What is Directors & Officers (D&O) Liability Insurance? Main Aspects of D&O Insurance Latest Tendencies More claims against Directors & Officers from shareholders Proposed legislative changes

3. 3 Disclosure of information – as a source of potential errors => misrepresentation Annual Report = best source of information disclosure increase of risk in misrepresentation to the stake holders immediate impact on the stock dynamics (if publicly listed company) May potentially lead to claims against the directors (in Russia Chief Accountant & General Director in particular) Effects of Information Disclosure Directors & Officers Liability Insurance could be viewed as a key risk management tool

4. 4 What is Directors & Officers (D&O) Liability Insurance? Directors & Officers Liability Insurance covers claims brought against Directors and Officers of a company, for wrongful acts committed in the discharge of their duties as company managers causing financial loss to the shareholders. Claimants could be: -shareholders, -bondholders, -company itself, -employees, -customers, -suppliers, -competitors, -regulatory bodies and others. Directors & Officers Liability Insurance = Sleep well at night policy

5. 5 Personal liability of company Ds and Os as individuals (Side A cover), Reimbursement of the insured company in case it has paid the claim of a third party on behalf of its managers in order to protect them (Side B or Company Reimbursement Cover). L isted stock companies can also obtain cover for claims against the company itself for a wrongful act in connection with the trading of its securities (Side C or Securities Entity Cover). Main Aspects of D&O Insurance

6. 6 Latest Tendencies

7. 7 Increased claims against Ds & Os claimants looking for scapegoats More claims against Directors & Officers from shareholders

8. 8 Latest Tendencies More & More attention being devoted to D&O Liability including legislators Proposed legislative changes including : changes to Section 71 of the Federal Law on Joint-Stock Companies 208-FZ of December 26, 1995 proposing possible indemnification of Ds & Os liability (including defense costs) for unintentional wrongful acts to be made available by the company legislative recognition of companies rights to purchase D&O Liability Insurance

9. 9 Latest Tendencies More & More attention being devoted to D&O Liability including legislators Proposed legislative changes including: changes to the Federal Law on the Securities Market 39-FZ of April 22, 1996 prescribing liability to the issuer of securities for losses caused to investors or/and shareholders for wrongful information reported within the prospectus OR any other wrongful information disclosure elsewhere (including annual report)

10. 10 ? ? Questions or Comments ?

11. 11 Thank you for your attention!