NAIC Adopts Corporate Governance Models for Insurers
|August 19, 2014|
The National Association of Insurance Commissioners (NAIC) adopted a Corporate Governance Annual Disclosure Model Act and supporting model regulation, which provides a means for insurance regulators to receive additional information on the corporate governance practices of U.S. insurers on an annual basis.
Under the requirements of the Model Act, U.S. insurers will be required to provide a detailed narrative describing governance practices to their lead state or domestic regulator by June 1 of each year. The NAIC said the narrative will be protected by strict confidentiality measures, which were included within the models to encourage insurers to be open and transparent in describing their governance practices to regulators. Insurers will be allowed some discretion in determining the level within the organization to report their corporate governance practices at, depending upon their structure and organization. The new disclosure requirements are expected to commence in 2016.
“The Corporate Governance Annual Disclosure Model Act represents nearly five years of thoughtful discussion and work regarding regulatory guidance that details best practices for the corporate governance of insurers,” said Susan Donegan, commissioner of the Vermont Department of Financial Regulation and Chair of the Corporate Governance Working Group. “This model act was developed to promote regulatory oversight as well as protect the confidentiality of the insurer.”
Key items required to be described within the corporate governance disclosure include: