Maryland To Monitor Private Insurers' Governance

By Michael Ha

NU Online News Service, April 12, 9:54 a.m. EDT?Maryland is starting a program to monitor and improve corporate-governance policies of mutual or closely held insurers incorporated in the state that fall outside the scope of Sarbanes-Oxley requirements.[@@]

Commenting on his department's new initiative, Maryland's insurance commissioner Alfred Redmer noted that while corporate scandals of the past few years have produced laws and regulations to strengthen the duties of corporate directors and officers, these requirements do not extend to non-public insurers.

"Most of these laws apply only to Securities and Exchange Commission regulated public insurance companies," Mr. Redmer commented. "Because many of Maryland's domestic insurance companies are mutual, non-profit or closely held, the rules made under the Sarbanes-Oxley Act, the SEC and other entities do not apply."

Mr. Redmer said the Maryland insurance administration's program will focus mostly on small and midsized insurers "that are not subject to SEC laws and regulations, including the Sarbanes-Oxley Act."

The purpose of this program, the commissioner added, is to make sure that board members are aware of their fiduciary responsibilities and obtain the necessary information and expertise to carry out their responsibilities.

"Our aim is to have strong, independent, knowledgeable directors," Mr. Redmer told National Underwriter. "We just want to make sure that the companies understand what board members' responsibilities are and make sure that everyone's on the same page."

"Our goal," Mr. Redmer said, "is not to punish or intimidate companies or board members." Rather, he explained, his program is designed to help strengthen insurers' internal controls and procedures. "I believe that having strong, independent and knowledgeable directors is one of the best ways to protect policyholders," Mr. Redmer said.

Special Reports /

Maryland To Monitor Private Insurers' Governance

Related Stories

Recommended For You