Nevada Administrative Code
Chapter 692C - Holding Companies
CORPORATE GOVERNANCE ANNUAL DISCLOSURE
Section 692C.220 - Requirements and contents of disclosure
Universal Citation: NV Admin Code 692C.220
Current through September 16, 2024
1. Each insurer or insurance group shall:
(a) Be as descriptive
as possible in completing the corporate governance annual disclosure;
and
(b) Include, without
limitation, documents used in the corporate governance of the insurer or
insurance group that demonstrate the strength of the framework and practices of
the corporate governance of the insurer or insurance group.
2. For the purposes of describing the framework and structure of the corporate governance of an insurer or insurance group, the insurer or insurance group shall include, without limitation, in the corporate governance annual disclosure the following:
(a) An identification of the board of
directors of the insurer or insurance group and any committee thereof that has
the ultimate responsibility for overseeing the insurer or insurance group and
an explanation of how such oversight occurs;
(b) The size and structure, including,
without limitation, the structure of the leadership, of the board of directors
and an explanation as to why the board of directors is of such size and
structure;
(c) The duties of the
board of directors and any committee thereof and whether the duties are
governed by bylaws, charters, informal mandates or by some other method;
and
(d) The roles of the chief
executive officer and chair of the board of directors.
3. For the purposes of describing the policies and practices of the board of directors of the insurer or insurance group and any committee thereof, the insurer or insurance group shall include, without limitation, in the corporate governance annual disclosure the following:
(a) The qualifications, expertise
and experience of each member of the board of directors and an explanation of
how such qualifications, expertise and experience assist in meeting the needs
of the insurer or insurance group;
(b) An explanation of how the board of
directors and any committee thereof maintain their independence;
(c) The number of meetings held by the board
of directors and any committee thereof over the past year and information
regarding the attendance of each member of the board of directors at such
meetings;
(d) An explanation of how
the insurer or insurance group identifies, nominates and elects a member of the
board of directors and any committee thereof and:
(1) Whether the insurer or insurance group
has established a committee to identify and select individuals for
consideration as a member to the board of directors or any committee
thereof;
(2) Whether term limits
are placed on the members of the board of directors;
(3) The procedure for the election and
reelection of a member of the board of directors; and
(4) Whether a policy promoting diversity on
the board of directors and any committee thereof is in place and, if so, an
explanation of how such a policy functions; and
(e) Information concerning any:
(1) Processes that are in place for the board
of directors to evaluate its performance and the performance of any committee
thereof; and
(2) Measures that the
board of directors has recently taken to improve the performance of the board
of directors and any committee thereof, including, without limitation, any
training programs that the board of directors has put in place.
4. For the purposes of describing the policies and practices of the board of directors of the insurer or insurance group for directing and managing senior management, the insurer or insurance group shall include, without limitation, in the corporate governance annual disclosure the following:
(a) If the
board of directors uses any suitability standard or other process to determine
if each prospective member of senior management has the qualifications,
expertise, experience and integrity required to fulfill his or her prospective
position, the board of directors must identify:
(1) The specific positions for which
suitability standards have been developed;
(2) A description of the suitability
standards used; and
(3) Any changes
that occur in the suitability standards for each member of senior
management;
(b) The code
of business conduct and ethics of the insurer or insurance group and an
explanation of how such a code:
(1) Complies
with any applicable federal or state laws and regulations; and
(2) Provides a method to report any behavior
or conduct that is illegal or unethical;
(c) The plan of the insurer or insurance
group for succession of the chief executive officer and the other members of
senior management; and
(d) An
explanation of how the insurer or insurance group ensures effective performance
by senior management throughout the organization by using performance
evaluations, programs of compensation and corrective action. Such information
must contain sufficient detail so that the Commissioner is able to understand
how the insurer or insurance organization ensures that programs of compensation
do not encourage or reward excessive risk-taking by senior management. The
insurer or insurance group:
(1) Shall include
a description of the general objectives of significant programs of compensation
and the types of actions or results that the programs of compensation are
designed to reward; and
(2) May
include, without limitation:
(I) The role of
the board of directors in overseeing programs of compensation and practices for
senior management;
(II) The various
elements of compensation provided by the programs of compensation of the
insurer or insurance group and an explanation of how the insurer or insurance
group determines and calculates the amount of each element of compensation
paid;
(III) An explanation of how
the programs of compensation of the insurer or insurance group are related to
the performance of both the company and each member of senior management over a
period of time;
(IV) Whether the
programs of compensation contain risk adjustments and, if so, how such
adjustments are incorporated into the programs of compensation of different
members of senior management and other employees;
(V) Any provisions built into the programs of
compensation to recover any awards or payments made to a member of senior
management or another employee if the measure of performance upon which such
awards or payments were calculated are restated or otherwise adjusted;
and
(VI) Any other factors relevant
in understanding how the insurer or insurance group monitors its programs of
compensation and policies regarding such programs to determine whether the
objectives for risk management of the insurer or insurance group are met by
incentivizing its members of senior management and other employees.
5. For the purposes of describing the policies and practices by which the board of directors of the insurer or insurance group, any committee thereof and senior management oversee the critical risk areas that impact the business activities of the insurer or insurance group, each insurer or insurance group shall include, without limitation, in the corporate governance annual disclosure the following:
(a) An explanation of how the board
of directors delegates the responsibilities of overseeing and managing critical
risk areas among the board of the directors, any committees thereof and senior
management;
(b) An explanation of
how the insurer or insurance group keeps the board of directors informed of
the:
(1) Strategic plans of the insurer or
insurance group;
(2) Associated
risks of those strategic plans; and
(3) Steps senior management is taking to
monitor and manage those associated risks; and
(c) An explanation of how the insurer or
insurance group organizes for each critical risk area the responsibility of
reporting. Such information must contain sufficient detail so that the
Commissioner can understand the frequency at which information on each critical
risk area is reported to and reviewed by the board of directors and senior
management. The insurer or insurance group may include, without limitation,
information on how the following critical risk areas of the insurer or
insurance group are reported:
(1) Risk
management processes or an ORSA Summary Report containing the information
required pursuant to
NRS
692C.351 to
692C.3548,
inclusive;
(2) Actuarial
function;
(3) Investment
decision-making processes;
(4)
Reinsurance decision-making processes;
(5) Business strategy and finance
decision-making processes;
(6)
Compliance function;
(7) Financial
reporting and internal auditing; and
(8) Market regulation decision-making
processes.
Added to NAC by Comm'r of Insurance by R094-17A, eff. 5/16/2018
NRS 679B.130, 692C.120, 692C.3505, 692C.3506
Disclaimer: These regulations may not be the most recent version. Nevada may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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