In making the request, the working group said the proposed model law would aid the collection of confidential information on insurers' corporate governance practices. It would allow regulators to improve their understanding of domestic insurers' governance practices, insure confidentiality of governance information collected by insurers, and identify overlapping or redundant requests for information that could be removed from other areas of the regulatory reform process, the request said.
Donegan said that the working group's meeting in
A starting point is Exhibit A of the working group's earlier White Paper on the subject. It consists of interrogatories that provide information about an organization's strategic planning, including whether and how often strategic plans are updated. Donegan said such information is needed from the corporate governance level to ensure a company board understands and can articulate the company's risk profile as well as how to mitigate risk. "Those types of discussions topics let us know that the board is vigorously involved," she said, adding that it allows for information about auditing, nominations, and whether there are protections against conflict of interest.
Industry officials are set to make the first move in the debate by offering their own draft document in the days prior to the NAIC's Summer Meeting in
Kerns said the insurance industry seeks a means by which it can remove redundancies in filing corporate governance information in the new model law. And he said that much of the industry's plan for confidentiality in filing is similar to that in the Own Risk Solvency Assessment Model Law that NAIC passed last September. "That [
Donegan ultimately seeks to supervise the drafting of a model law that has clear confidentiality rules that states can adopt and use. She said confidentiality of information has been a concern of both regulators and industry throughout the discussions to this point. "We know as regulators that without confidentiality we jeopardize the level of candor we can engage in with the companies," she said.
The request for model law development said it is likely that the committee would draft and adopt the model within one year and that the necessary two-thirds majority of NAIC members would approve a proposed model law. Also, the document said state legislatures are likely to adopt the model law within three years' time.
An initial effort to conduct corporate governance information collection as part of a risk-based plan was under consideration last year, but industry officials backed away from the idea in the face of industry opposition (Best's News Service,
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