The National Association of Insurance Commissioners (NAIC) has 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 US insurers on an annual basis.
Under the requirements of the Model Act, US insurers will have to provide a detailed account describing governance practices to their lead state or domestic regulator by 1 June each year.
The information 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 organisation to report their corporate governance practices at, depending upon their structure and organisation. The new disclosure requirements are expected to commence in 2016.
“[The 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.
Joseph Torti, Rhode Island deputy director and superintendent of insurance and banking commented: “Annual and transparent disclosure of corporate governance practices of insurers will ensure that state regulators have a comprehensive understanding of the corporate governance structure, policies and practices utilised by the insurer.”
