NAIC: Comments on Corporate Governance Working Group’s Proposed Responses to a Comparative Analysis Paper Due Friday, September 28, 2012
Sep 24, 2012
The National Association of Insurance Commissioners (“NAIC”) reminds that the comment period for the Corporate Governance Working Group’s “Proposed Responses to a Comparative Analysis of Existing U.S. Corporate Governance Requirements” concludes on Friday, September 28, 2012.
To view the entire document click here: “Proposed Responses to a Comparative Analysis”
Commenters are encouraged to organize their thoughts in accordance with the structure of this document and provide specific suggestions for changes to the individual exhibits, if applicable.
The NAIC’s Corporate Governance Working Group (“Working Group”) has been charged with, inter alia, outlining high-level corporate governance principles for use in U.S. insurance regulation and developing regulatory guidance, including detailed best practices, for the corporate governance of insurers.
In furtherance of these charges, the Working Group reviewed recent insurance regulatory reforms in the corporate governance area and compiled a summary of existing corporate governance requirements impacting U.S. insurers. This review was organized based on the structure of “The United States Insurance Financial Solvency Framework,” which outlines the seven core principles used to regulate financial solvency. Those principles are:
- Principle 1: Regulatory Reporting, Disclosure and Transparency
- Principle 2: Off-site Monitoring and Analysis
- Principle 3: On-site Risk-focused Examinations
- Principle 4: Reserves, Capital Adequacy and Solvency
- Principle 5: Regulatory Control of Significant, Broad-based Risk-related Transactions/Activities
- Principle 6: Preventive and Corrective Measures, Including Enforcement
- Principle 7: Exiting the Market and Receivership
Upon the conclusion of the exposure period, the Working Group plans to hold conference calls to discuss the comments received and adjust the paper and its proposals, if necessary.
The Working Group is expected to finalize its response by the NAIC’s December 2012 National Meeting, in accordance with its established timeline.
About the Corporate Governance Working Group
On December 22, 2011, the Corporate Governance Working Group adopted “Existing U.S. Corporate Governance Requirements,” which summarized the existing corporate governance standards and practices in place within the U.S. regulatory system. Following completion of this document, the Working Group performed a comparative analysis among the existing standards and international standards, company best practices and regulatory needs. To complete this effort, individual states were assigned to perform an analysis of each of the seven core principles within the U.S. framework and to report their results and recommendations back to the Working Group. This occurred through a series of conference calls whereby the individual states recommended that the Working Group consider the implementation of specific corporate governance enhancements as a result of the comparative analysis.
The Working Group’s 2012 charges are:
- Outline high-level corporate governance principles. Determine the appropriate methodology to evaluate adherence with such principles, giving due consideration to development of a model law.
- Analyze the requirements, regulatory initiatives and best practices of the states, other countries and regulators, and the insurance industry, to assist in principle development.
- Develop additional regulatory guidance including detailed best practices for the corporate governance of insurers.
- Review the current International Association of Insurance Supervisors (“IAIS”) principles and standards related to corporate governance. Critically review and provide input and drafting to the IAIS Governance and Compliance Subcommittee, and on other IAIS papers as assigned. From this work, identify future initiatives to improve the U.S. regulatory solvency system.
- Consider the development of insurance regulatory education for members of insurers’ Boards of Directors.
To go directly to the Working Group’s Web page, click here.
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