The NAIC recently adopted the Corporate Governance Annual Disclosure Model Act and corresponding Model Regulations (CGAD). Although the initial disclosures are not likely due until 2016 at the earliest, carriers should take Benjamin Franklin’s advice: “Don’t put off until tomorrow what you can do today.” In 2015, insurers should take a hard look at their corporate governance structure and practices, realizing that regulators will likely be doing the same in the not so distant future.
Executive Summary
In the wake of the NAIC's adoption of new corporate disclosure requirements, insurers need to start examining their corporate governance structure and practices now—and not when the filing deadline is imminent.CGAD is one of the many regulatory changes resulting from NAIC’s Solvency Modernization Initiative. It seeks to address the perceived lack of effective corporate governance practices and oversight of critical risk areas. One key difference between CGAD and some other NAIC initiatives is that there are no exemptions from the reporting requirement. CGAD applies to all insurers, even small insurers, fraternals and standalone mutuals.
