Amendments to the DGCL Permit Captive D&O Insurance
February 24, 2022
The Delaware General Assembly has approved legislation amending Section 145 of the Delaware General Corporation Law (the “DGCL”) to authorize a Delaware corporation to use captive insurance, which is generally defined as insurance provided by or through a wholly-owned subsidiary funded by the corporation, to protect its current and former directors, officers and other indemnifiable persons (“covered persons”). The captive insurance may be used to protect covered persons against liability even if the corporation would not be empowered to indemnify them, subject to a limited set of minimum exclusions. The amendments, which are expected to be enacted in the near term, will afford Delaware corporations the opportunity to take advantage of captive insurance arrangements when designing their D&O insurance programs.