Section 0780-01-35-.04 - FILING PROCEDURES(1) An insurer, or the insurance group of which the insurer is a member, required to file a CGAD by the Corporate Governance Annual Disclosure Act, 2018 Tenn. Pub. Acts Ch. 873, § 8, shall submit to the Commissioner a CGAD in accordance with the following:(a) All insurers or insurance groups, except those that fall within the scope of subparagraph (b), shall file a CGAD that contains the information described in Rule 0780-01-35-.05.(b) An insurer or insurer group who meets the requirements of 2018 Tenn. Pub. Acts Ch. 873, § 8 (subsection 56-2-906(c)), shall file a CGAD that contains the information described in Rule 0780-01-35-.06. For the purposes of this Rule, "nominal compensation" is defined as where 75% of the voting directors on the insurer or insurance group's Board receive direct compensation of $10,000 or less per year and indirect compensation and benefits of $50,000 or less per year, exclusive of per diem and lodging travel expenses.(2) The CGAD must include a signature of the insurer's or insurance group's CEO or corporate secretary attesting to the best of the individual's belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the CGAD has been provided to the insurer's or insurance group's Board of Directors (hereinafter "Board") or the appropriate committee thereof.(3) The insurer or insurance group shall have discretion regarding the appropriate format for providing the information required by these regulations and is permitted to customize the CGAD to provide the most relevant information necessary to permit the Commissioner to gain an understanding of the corporate governance structure, policies and practices utilized by the insurer or insurance group.(4) For the purposes of completing the CGAD, the insurer or insurance group may choose to provide information on governance activities that occur at the ultimate controlling parent level, an intermediate holding company level and/or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the CGAD disclosures:(a) At the level at which the insurer's or insurance group's risk appetite is determined;(b) At which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised; or(c) At the level at which legal liability for the failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.
(5) Notwithstanding paragraph (1) of this rule, and as outlined in 2018 Tenn. Pub. Acts Ch. 873, § 8 (subsection 56-2-904), if the CGAD is completed at the insurance group level, then it must be filed with the lead state of the group as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC. In these instances, a copy of the CGAD must also be provided to the chief regulatory official of any state in which the insurance group has a domestic insurer, upon request.(6) An insurer or insurance group may comply with this chapter by referencing other existing documents (e.g., ORSA summary Report, Holding Company Form B or F Filings, Securities and Exchange Commission (SEC) Proxy Statements, foreign regulatory reporting requirements, etc.) if the documents provide information that is comparable to the information described in Rule 0780-01-35-.05 or Rule 0780-01-35-.06, as applicable. The insurer or insurance group shall clearly reference the location of the relevant information within the CGAD and attach the referenced document if it is not already filed with or available to the Commissioner.(7) Each year following the initial filing of the CGAD, the insurer or insurance group shall file an amended version of the previously filed CGAD indicating where changes have been made. If no changes were made in the information or activities reported by the insurer or insurance group, the filing should so state.Tenn. Comp. R. & Regs. 0780-01-35-.04
Original rules filed August 20, 2018; effective 11/18/2018.Authority: T.C.A. § 56-2-301 and 2018 Tenn. Pub. Acts Ch. 873, § 8.