New Corporate Governance Annual Disclosure Requirements for Connecticut Insurers to Take Effect in 2017 -

A recently enacted Connecticut statute intended to compel insurance companies to improve their corporate governance will impose significant new obligations on Connecticut domestic insurers, and their holding companies. Pursuant to ConnecticutPublic Act No. 16-206, by June 1, 2017, and annually thereafter, each domestic insurer or the insurance group of which that insurer is a member must submit to the Insurance Commissioner a confidential Corporate Governance Annual Disclosure (CGAD). If an insurer is a member of an insurance group, the insurer must submit the CGAD to the lead state commissioner, as determined by the procedures in the NAIC’s applicable financial analysishandbook. Although the new statute is essentially a disclosure obligation, it will focus directors and senior management on analyzing and improving their corporate governance practices. Enactment of P.A. 16-206 follows the approval of the CorporateGovernance Annual Disclosure Model Act and supporting Model Regulation by the NAIC. Similar CGAD statutes have already been enacted in several other states, including California, Florida, Vermont and Nebraska.