New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter B - Life Insurers
Part 90 - Corporate Governance
Section 90.3 - Corporate governance annual disclosure
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 90.3
Current through Register Vol. 46, No. 39, September 25, 2024
(a)
(1) An
insurer shall submit electronically to the superintendent by December 1, 2020 a
corporate governance annual disclosure applicable to the insurer and the
holding company system, article 16 system, or article 17 system of which it is
a member. The insurer also shall submit to the superintendent one hard copy of
the corporate governance annual disclosure in 2020. Starting in 2021, the
insurer shall file by June 1 of each year an amended version of its previously
submitted corporate governance annual disclosure indicating in the disclosure,
using tracked changes, where the insurer made changes. The insurer also shall
file a copy of the amended disclosure without any tracked changes shown. If the
insurer did not make any changes, then the insurer shall file with the
superintendent the corporate governance annual disclosure filed with the
superintendent the previous year and shall state that the insurer did not make
any changes. An insurer shall maintain and make available documentation and
supporting information upon examination or upon the superintendent's
request.
(2) An insurer may comply
with paragraph (1) of this subdivision by submitting to the superintendent the
most recent and substantially similar corporate governance annual disclosure or
disclosures provided by the insurer or another member of the insurer's holding
company system, article 16 system, or article 17 system to the head insurance
regulator of another state or to a supervisor or regulator of a foreign
jurisdiction, if the corporate governance disclosure or disclosures provide
information that is comparable to the information described in this section. A
report in a language other than English shall be accompanied by a certified
translation of the report into English.
(3) An insurer shall make the corporate
governance annual disclosure at the level at which:
(i) the insurer's or system's risk appetite
is determined;
(ii) the insurer's
earnings, capital, liquidity, operations, and reputation are overseen
collectively and at which the supervision of these factors is coordinated and
exercised; or
(iii) legal
responsibility for failure of general corporate governance duties would be
placed. The insurer shall indicate in the corporate governance annual
disclosure which of the criteria set forth in subparagraphs (i) through (iii)
of this paragraph were used to determine the level of disclosure and explain
any subsequent changes in the level of disclosure.
(4) The corporate governance annual
disclosure shall describe the corporate governance framework, including a
description of:
(i) the board of directors,
or other governing body, and various committees thereof, ultimately responsible
for overseeing the insurer or system, and the level or levels at which that
oversight occurs;
(ii) the
rationale for the current size and structure of the board of directors or other
governing body;
(iii) the duties of
the board of directors, or other governing body, and of each of its significant
committees, and the way in which they are governed;
(iv) the way in which the board of
directors', or other governing body's, leadership is structured, including a
discussion of the roles of chief executive officer and chairperson of the board
of directors, or other governing body;
(v) the policies and practices of the most
senior governing entity and significant committees thereof, including a
discussion of the following factors:
(a) the
way in which the qualifications, expertise, and experience of each member of
the board of directors, or other governing body, meet the needs of the insurer
or system;
(b) the way in which an
appropriate amount of independence is maintained on the board of directors, or
other governing body, and its significant committees;
(c) the number of meetings held by the board
of directors, or other governing body, and its significant committees over the
past year, as well as information about attendance at the meetings;
(d) the way in which the insurer or system
identifies, nominates, and elects members to the board of directors, or other
governing body, and its committees, including whether a nomination committee is
in place to identify and select individuals for consideration, whether term
limits are placed on members of the board of directors or other governing body,
how the election and re-election processes function, whether there is a
diversity policy in place and if so, the way in which the diversity policy
functions;
(e) the processes in
place for the board of directors, or other governing body, to evaluate its
performance and the performance of its committees, as well as any recent
measures taken to improve performance, including any training programs that
have been put in place;
(f) the way
in which the insurer or system ensures that members of the board of directors,
or other governing body, comply with the duty to act in good faith and in a
manner that the members believe to be in the best interests of the insurer or
system;
(g) the way in which the
insurer or system ensures that members of the board of directors, or other
governing body, comply with the duty to discharge their duties with the care
that a person in a like position reasonably would believe to be appropriate
under similar circumstances;
(h)
the reporting or information system or controls that the insurer or system has
implemented to enable members of the board of directors, or other governing
body, to carry out their duties; and
(i) the way in which the insurer or system,
having implemented a reporting or information system or controls, ensures that
the members of the board of directors, or other governing body, do not
consciously fail to monitor or oversee the insurer's or system's operations
thereby disabling itself from being informed of risks or problems requiring
their attention;
(vi)
the policies and practices for directing senior management, including a
description of the following factors:
(a) any
suitability standards used to determine whether officers and key persons in
control functions have the appropriate background, experience, and integrity to
fulfill their prospective roles, identification of the specific positions for
which suitability standards have been developed and a description of the
standards employed, and any changes in an officer's or key person's suitability
as outlined by the insurer's or system's standards and procedures to monitor
and evaluate the changes;
(b) the
insurer's or system's code of business conduct and ethics, the discussion of
which considers compliance with laws, rules, and regulations, and proactive
reporting of any illegal or unethical behavior;
(c) the insurer's or system's processes for
performance evaluation, compensation, and corrective action to ensure effective
senior management throughout the organization, including a description of the
general objectives of significant compensation programs and what the programs
are designed to reward. The description shall include sufficient detail to
allow the superintendent to understand the way in which the insurer or system
ensures that compensation programs do not encourage or reward excessive risk
taking. Elements that shall be discussed include:
(1) the role of the board of directors, or
other governing body, in overseeing management compensation programs and
practices;
(2) the various elements
of compensation awarded in the insurer's or system's compensation programs and
the way in which the insurer or system determines and calculates the amount of
each element of compensation paid;
(3) the way in which compensation programs
are related to both business entity and individual performance over
time;
(4) whether compensation
programs include risk adjustments and the way in which those adjustments are
incorporated into the programs for employees at different levels;
(5) any clawback provisions built into the
programs to receive awards or payments if the performance measures upon which
they are based are restated or otherwise adjusted; and
(6) any other factors relevant in
understanding how the insurer or system monitors its compensation policies to
determine whether its risk management objectives are met by incentivizing its
employees; and
(d) the
insurer's or system's plans for senior management succession; and
(vii) the processes by which the
board of directors, or other governing body, its committees, and senior
management ensure an appropriate amount of oversight of the critical risk areas
affecting the insurer's business activities, including a discussion of the way
in which:
(a) oversight and management
responsibilities are delegated between the board of directors, or other
governing body, its committees, and senior management;
(b) the board of directors, or other
governing body, is kept informed of the insurer's or system's strategic plans,
the associated risks, and steps that senior management is taking to monitor and
manage those risks; and
(c)
reporting responsibilities are organized for each critical risk area. The
description shall specify the frequency with which information on each critical
risk area is reported to and reviewed by senior management and the board of
directors, or other governing body. This description shall include the
following critical risk areas:
(1) risk
management processes;
(2) actuarial
function;
(3) investment
decision-making processes;
(4)
reinsurance decision-making processes;
(5) business strategy and financial
decision-making processes;
(6)
compliance function;
(7) financial
reporting and internal auditing; and
(8) market conduct decision-making
processes.
(b) An insurer may comply with this section by referencing other existing documents in the corporate governance annual disclosure if the referenced documents provide information that is comparable to the information described in paragraph (3) of subdivision (a) of this section. The insurer shall clearly reference the location of the relevant document within the corporate governance annual disclosure and shall attach the referenced document if it has not been filed with the superintendent during the prior 12 months or is otherwise not available to the superintendent.
(c) A corporate governance annual disclosure shall include the signature of the chief executive officer or corporate secretary, attesting to the best of his or her knowledge and belief that the insurer or its system has implemented the corporate governance framework, and that a copy of the corporate governance annual disclosure has been provided to the insurer's or system's board of directors or the appropriate committee thereof, or if there is no board of directors, then to the insurer's or system's governing body.
Disclaimer: These regulations may not be the most recent version. New York 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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