Business & Corporate
Pennsylvania Requires Insurers to File Annual Corporate Governance Disclosures
Pennsylvania has adopted uniform annual corporate governance disclosure requirements for domestic insurers and insurance groups of which the Commonwealth is the lead state (each, an “Insurer”) in Senate Bill 1205 of 2018, now known as Act 163 (the “Act”). Those national standards were approved November 18, 2014 by the National Association of Insurance Commissioners (“NAIC”) and are required to be implemented by the Pennsylvania Insurance Department (“Department”) for the Department’s continuing certification by the NAIC. Under the Act, beginning January 1, 2020, and annually thereafter, Insurers must file with the Department written disclosures of confidential governance practices and policies, each known as a “Corporate governance annual disclosure” or “CGAD”. The effect of the Act and similar legislation to be adopted in states throughout the United States is to establish uniform standards for the monitoring of the risk decision process of insurers and insurance groups with a goal of minimizing insolvencies in the insurance industry.