Insurance company management teams have just completed their annual statement filings for the 2018 calendar year and will soon be having meetings with their Boards of Directors to discuss 2019. We consider now a good time to remind Pennsylvania companies that the Corporate Governance Annual Disclosure (CGAD) was signed into Pennsylvania law in 2018, with an initial filing deadline of June 1, 2020. Currently, the Pennsylvania Insurance Department (PID) is preparing a preferred CGAD template for insurers to use and plans to post it on the PID website in 2019.
The Pennsylvania law’s recommended information to include in the CGAD is fairly extensive. In 2019, management staff and their Boards of Directors should schedule specific meetings to review and discuss the information to be included in the filing, as well as to begin drafting the CGAD. Once the PID CGAD template is available, we recommend that management staff use it as a guide to document this information.
The law states that the purpose of the CGAD is to provide the Acting Insurance Commissioner with a summary of an insurer’s corporate governance structure, policies and practices. This will permit the Insurance Commissioner to gain and maintain an understanding of the insurer’s corporate governance framework. There are no exemptions from the CGAD filing requirement related to size or type of entity. The CGAD will be a company-specific document providing a narrative on the following key areas:
- Corporate governance framework
- Policies and practices of the Board of Directors and significant committees
- Policies and practices for directing senior management
- Processes to ensure oversight of critical risk areas
Please contact Brown Schultz Sheridan & Fritz (BSSF) to provide advisory services to your company related to this initial CGAD filing.