Wyoming Administrative Code
Agency 044 - Insurance Dept
Sub-Agency 0002 - General Agency, Board or Commission Rules
Chapter 70 - CORPORATE GOVERNANCE ANNUAL DISCLOSURE
Section 70-5 - Contents of Corporate Governance Annual Disclosure
Universal Citation: WY Code of Rules 70-5
Current through September 21, 2024
(a) The insurer or insurance group shall be as descriptive as possible in completing the CGAD, with inclusion of attachments or example documents that are used in the governance process, since these may provide a means to demonstrate the strengths of their governance framework and practices.
(b) The CGAD shall describe the insurer's or insurance group's corporate governance framework and structure including consideration of the following:
(i) The Board and various committees thereof
ultimately responsible for overseeing the insurer or insurance group and the
level(s) at which that oversight occurs (e.g., ultimate control level,
intermediate holding company, legal entity, etc.). The insurer or insurance
group shall describe and discuss the rationale for the current Board size and
structure; and
(ii) The duties of
the Board and each of its significant committees and how they are governed
(e.g., bylaws, charters, informal mandates, etc.), as well as how the Board's
leadership is structured, including a discussion of the roles of Chief
Executive Officer (CEO) and Chairman of the Board within the
organization.
(c) The insurer or insurance group shall describe the policies and practices of the most senior governing entity and significant committees thereof, including a discussion of the following factors:
(i) How
the qualifications, expertise, and experience of each Board member meet the
needs of the insurer or insurance group.
(ii) How an appropriate amount of
independence is maintained on the Board and its significant
committees.
(iii) The number of
meetings held by the Board and its significant committees over the past year as
well as information on director attendance.
(iv) How the insurer or insurance group
identifies, nominates, and elects members to the Board and its committees. The
discussion should include, for example:
(A)
Whether a nomination committee is in place to identify and select individuals
for consideration.
(B) Whether term
limits are placed on directors.
(C)
How the election and re-election processes function.
(D) Whether a Board diversity policy is in
place and if so, how it functions.
(v) The processes in place for the Board to
evaluate its performance and the performance of its committees, as well as any
recent measures taken to improve performance (including any Board or committee
training programs that have been put in place).
(d) The insurer or insurance group shall describe the policies and practices for directing Senior Management, including a description of the following factors:
(i)
Any processes or practices (i.e., suitability standards) to determine whether
officers and key persons in control functions have the appropriate background,
experience, and integrity to fulfill their prospective roles, including:
(A) Identification of the specific positions
for which suitability standards have been developed and a description of the
standards employed.
(B) Any changes
in an officer's or key person's suitability as outlined by the insurer's or
insurance group's standards and procedures to monitor and evaluate such
changes.
(ii) The
insurer's or insurance group's code of business conduct and ethics, the
discussion of which considers, for example:
(A) Compliance with laws, rules, and
regulations; and
(B) Proactive
reporting of any illegal or unethical behavior.
(iii) The insurer's or insurance group'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 Commissioner to understand how the organization
ensures that compensation programs do not encourage and/or reward excessive
risk taking. Elements to be discussed may include, for example:
(A) The Board's role in overseeing management
compensation programs and practices;
(B) The various elements of compensation
awarded in the insurer's or insurance group's compensation programs and how the
insurer or insurance group determines and calculates the amount of each element
of compensation paid;
(C) How
compensation programs are related to both company and individual performance
over time;
(D) Whether compensation
programs include risk adjustments and how those adjustments are incorporated
into the programs for employees at different levels;
(E) Any clawback provisions built into the
programs to recover awards or payments if the performance measures upon which
they are based are restated or otherwise adjusted;
(F) Any other factors relevant in
understanding how the insurer or insurance group monitors its compensation
policies to determine whether its risk management objectives are met by
incentivizing its employees.
(iv) The insurer's or insurance group's plans
for CEO and Senior Management succession.
(e) The insurer or insurance group shall describe the processes by which the Board, its committees, and Senior Management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer's business activities, including a discussion of:
(i) How oversight and management
responsibilities are delegated between the Board, its committees, and Senior
Management;
(ii) How the Board is
kept informed of the insurer's strategic plans, the associated risks, and steps
that Senior Management is taking to monitor and manage those risks;
(iii) How reporting responsibilities are
organized for each critical risk area. The description should allow the
Commissioner to understand the frequency at which information on each critical
risk area is reported to and reviewed by Senior Management and the Board. This
description may include, for example, the following critical risk areas of the
insurer:
(A) Risk management processes (an
ORSA Summary Report filer may refer to its ORSA Summary Report pursuant to the
Risk Management and Own Risk and Solvency Assessment Model Act);
(B) Actuarial function;
(C) Investment decision-making
processes;
(D) Reinsurance
decision-making processes;
(E)
Business strategy/finance decision-making processes;
(F) Compliance function;
(G) Financial reporting/internal auditing;
and
(H) Market conduct
decision-making processes.
Disclaimer: These regulations may not be the most recent version. Wyoming 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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