A heightened federal regulatory environment, including interest in environmental, social and governance issues, could make the directors and officers liability insurance market more difficult.

Among recent regulatory developments, a Securities and Exchange Commission clawback rule adopted in October requires, in cases where stock issuers must prepare an accounting restatement, the recovery of erroneously awarded incentive compensation paid to current or former executive officers for the preceding three-year period.

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William G. Passannante, a shareholder with Anderson Kill P.C. in New York, said the anti-ESG issue could prompt litigation.

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