Skip to main content

Back to Insurance Topics

Corporate Governance


Last Updated: 8/25/2023

Issue: Corporate governance is the system of rules, practices, and processes by which an insurance company governs itself. Corporate governance includes not only the obvious corporate structure (board of directors, senior management, business area functions, etc.) but also a company’s organizational culture (values, ethics, etc.), strategies, controls, as well as all the governing documents that capture the spirit and the letter of a company’s guiding principles and mandates.

Overview: Corporate governance defines all organizational roles, responsibilities, and accountabilities at all levels. It describes and explains the management hierarchy, that is, the decision-making and accountability chain and ultimately who has the power to manage and legally represent the company in all settings. Corporate governance spells out requirements for documenting decisions and actions as well as the thinking behind them. It also provides corrective action for non-compliance or weak oversight, controls, and management. 

Hence, corporate governance addresses the allocation and regulation of power and accountabilities within an insurer and avoids undue concentration of authority and power. Also, corporate governance has to be transparent and have appropriate systems, controls, and limits to ensure the given authority and power is used to protect the interests of all of the insurance company’s stakeholders.


Status: The Corporate Governance Annual Disclosure Model Act and Regulation (#305/#306) details requirements for extensive disclosure of regulated insurance companies’ corporate governance practices. The Model Act became an accreditation requirement on January 1, 2020. The Model Act requires each U.S. insurer (or the insurance group in which the insurer is a member) to submit a Corporate Governance Annual Disclosure (CGAD) to its lead state or domestic regulator on an annual basis.

In the CGAD, insurers must document confidential information about their corporate governance framework. This includes the policies of their boards of directors and key committees, the frequency of their meetings, and the procedure for the oversight of critical risk areas and appointment practices. Insurers must also disclose the policies and practices used by their board of directors for directing senior management on critical areas. This includes a description of codes of business conduct and ethics and processes for performance evaluation, compensation practices, corrective action, succession planning, and suitability standards. This information is utilized by insurance regulators to understand, review and assess the corporate governance practices of insurers in their ongoing solvency monitoring activities.


View upcoming meetings or use the completed tab to view the last 150 days.

Couldn't find any upcoming meetings or calls...