The National Association of Insurance Commissioners ispursuing a new model law to allow for a framework to collectconfidential information on insurers' corporate governancepractices.

The development of this model law is meant to protect theconfidentiality of governance information collected from insurersand assist U.S. regulators in achieving greater consistency withinternational standards.

The NAIC's Corporate Governance Working Group, which proposedthe new model law, has spent several years studying the issues andhas identified a need to collect and review corporate governanceinformation of insurers in the period between onsite examinationsby the states.

The full NAIC agreed and voted on this and other proposalsduring a July 26 NAIC Executive/Plenary Committee conferencecall.

The working group considered amending other existing model lawsor requirements such as the Risk-Based Capital for Insurers ModelAct, Own Risk and Solvency Assessment (ORSA) Model Act and theannual statement filing, but couldn't find a framework that couldbe extended to allow for the collection and protection ofconfidential information.

In its questionnaire for evaluating the development of a modellaw, the working group said that the development of this model lawwould serve to bring about increased consistency and compliancewith international standards, which is best achieved through anational standard.

However, the NAIC working group checked the box “No” for whetherthe proposed model law was a response to or impacted by federallaws or regulations.

One of the standards of the internationally-establishedInsurance Core Principles (ICPs) — to which the U.S. insurancesystem generally adheres — requires adequate top-level controls,checks, structures and communication in an extensive fashion anddetail.

The likelihood that state legislature will adopt the model lawin a uniform manner within three years of adoption by the NAIC ismoderately high, according to its checklist.