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Framing the Future of Corporate Governance

For insurance companies, the time to look ahead is now


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The National Association of Insurance Commissioners’ (NAIC) Executive (EX) Committee/Plenary approved the proposal for the Corporate Governance (E) Working Group (CGWG) to develop a new model law, which would facilitate the annual collection of information regarding insurers' corporate governance practices. An insurer will now be required to provide its regulator with a summary of its corporate governance framework and practices annually, instead of every three to five years, as is done now. The proposed framework summary would include five sections:

  • Discussion of significant changes from prior year
  • General description of the organization’s corporate governance framework
  • Description of board of directors and committee policies and practices
  • Description of management policies and practices
  • Management and oversight of critical risk areas

In addition to annual reporting, insurers will be required to provide an increased level of compensation disclosure and maintain an effective internal audit function for exceeding premium thresholds (the model law development request sets $500 million in annual premiums as the threshold requirement).

We believe that the enhanced NAIC governance requirements offer a unique opportunity for insurance companies to step back and consider their current governance framework, rather than to simply report what has always been. A more complete overview of the framework can be found in our publication, Framing the future of corporate governance: Deloitte Governance Framework.

Download this document to explore the appropriate attributes needed to deeply analyze specific needs within an organization and create a roadmap for continuous improvement.

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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