New rules have been adopted by the National Association of Insurance Commissioners' Financial Condition Committee that would allow regulators to gain greater insight into insurers' corporate-governance practices.

The model act—the Corporate Governance Annual Disclosure (CGAD) Model Act—calls for U.S. insurers to provide "a detailed narrative describing governance practices to their lead state or domestic regulator by June 1 of each year," the NAIC says, adding that "strict confidentiality measures" would be in place to protect the confidential and sensitive information insurers would be providing.

In particular, the NAIC says items "required to be described within the corporate governance disclosure" include:

• The insurer's corporate-governance framework and structure including duties and structure of the board of directors and its committees.
• The policies and practices of its board of directors and significant committees including appointment practices, the frequency of meetings held and review procedures.
• The policies and practices directing senior management, including a description of defined suitability standards, the insurer's code of conduct and ethics, performance evaluation and compensation practices, and succession planning.
• The processes by which the board of directors, its committees and senior management ensure an appropriate level of oversight to the critical risk areas impacting the insurer's business activities including risk management processes, the actuarial function, and investment, reinsurance and business strategy decision-making processes.

The NAIC is expecting that states will start requiring disclosures at the beginning of 2016, with all states and territories on board by 2019, the NAIC told PC360.