CORPORATE GOVERNANCE ANNUAL DISCLOSURE

M.G.L. pt. Part I, tit. Title XXII, ch. c. 176W

in effect

M.G.L. c. 176W, § 1 Definitions

c. 176W, § 1. Definitions Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Commissioner'', the commissioner of insurance. ''Corporate Governance Annual Disclosure (CGAD)'', a confidential report filed by the insurer or insurance group made in accordance with the requirements of this chapter. ''Corporate Governance Annual Disclosure Model Regulation'', the current version of the Corporate Governance Annual Disclosure Model Regulation developed and adopted by the NAIC and as amended from time to time. A change in the Corporate Governance Annual Disclosure Model Regulation shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC. ''Division'', the division of insurance. ''Insurance group'', those insurers and affiliates included within an insurance holding company system as defined in section 206 of chapter 175; health maintenance organizations and affiliates included within a health maintenance organization holding company system, as defined in section 1 of chapter 176G; workers compensation self-insurance groups and their affiliates organized pursuant to sections 25E to 25U, inclusive, of chapter 152; fraternal benefit societies and their affiliates organized pursuant to chapter 176; non-profit hospital service corporations and their affiliates organized pursuant to chapter 176A; medical service corporations and their affiliates organized pursuant to chapter 176B; dental service corporations and their affiliates organized pursuant to chapter 176E; optometric service corporations and their affiliates organized pursuant to chapter 176F; insured legal services plans and their affiliates organized pursuant to chapter 176H; and limited societies and their affiliates organized pursuant to chapter 176P. ''Insurer'', the same meaning as in section 1 of chapter 175; workers compensation self-insurance groups organized pursuant to sections 25E to 25U, inclusive, of chapter 152; fraternal benefit societies organized pursuant to chapter 176; non-profit hospital service corporations organized pursuant to chapter 176A; medical service corporations organized pursuant to chapter 176B; dental services corporations organized pursuant to chapter 176E; optometric service corporations organized pursuant to chapter 176F; health maintenance organizations organized pursuant to chapter 176G; insured legal services plans organized pursuant to chapter 176H; and limited societies organized pursuant to chapter 176P; except that ''insurer'' shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the commonwealth of Puerto Rico, the District of Columbia or a state or political subdivision of a state. ''NAIC'', the National Association of Insurance Commissioners. ''ORSA summary report'', the report filed in accordance with chapter 176V.

M.G.L. c. 176W, § 2 Disclosure requirement

c. 176W, § 2. Disclosure requirement Section 2. (a) An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in subsection (a) of section 4. Notwithstanding any request from the commissioner made pursuant to subsection (c), if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC. (b) The CGAD shall include a signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee thereof. (c) An insurer not required to submit a CGAD under this section shall do so upon the commissioner's request. (d) For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level 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 at the level at which the insurer's or insurance group's risk appetite is determined, or 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 the level at which legal liability for 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 3 criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting. (e) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook adopted by the NAIC referenced in subsection (a). (f) Insurers providing information substantially similar to the information required by this chapter in other documents provided to the commissioner, including proxy statements filed in conjunction with Form B requirements pursuant to section 206C of chapter 175, or other state or federal filings provided to the division, shall not be required to duplicate that information in the CGAD, but shall only be required to cross reference the document in which the information is included.

M.G.L. c. 176W, § 3 Rules and regulations

c. 176W, § 3. Rules and regulations Section 3. The commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as shall be necessary to carry out the provisions of this chapter.

M.G.L. c. 176W, § 4 Contents of corporate governance annual disclosure

c. 176W, § 4. Contents of corporate governance annual disclosure Section 4. (a) The insurer or insurance group shall have discretion over the responses to the CGAD inquiries, provided the CGAD shall contain the material information necessary to permit the commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies and practices. The commissioner may request additional information that he or she deems material and necessary to provide the commissioner with a clear understanding of the corporate governance policies, the reporting or information system or controls implementing those policies. (b) Notwithstanding subsection (a) of this section, the CGAD shall be prepared consistent with the NAIC Corporate Governance Annual Disclosure Model Regulation, subject to the requirements of this chapter. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.

M.G.L. c. 176W, § 5 Confidentiality

c. 176W, § 5. Confidentiality Section 5. (a) Documents, materials or other information including the CGAD, in the possession or control of the division that are obtained by, created by or disclosed to the commissioner or any other person under this chapter shall be proprietary and recognized to contain trade secrets. All such documents, materials or other information shall be confidential by law and privileged, shall not be considered a public record pursuant to section 10 of chapter 66, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer. Nothing in this section shall require written consent of the insurer before the commissioner may share or receive confidential documents, materials or other CGAD-related information pursuant to subsection (c) to assist in the performance of the commissioner's regular duties. (b) Neither the commissioner nor any person who received documents, materials or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner, or with whom such documents, materials or other information are shared pursuant to this chapter shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a). (c) In order to assist in the performance of the commissioner's regulatory duties, the commissioner may: (i) upon request, share documents, materials or other CGAD-related information including the confidential and privileged documents, materials or information subject to subsection (a), including proprietary and trade secret documents and materials with other state, federal and international financial regulatory agencies, including members of any supervisory college as defined in subsection (x) of section 206C of chapter 175, with the NAIC, and with third party consultants pursuant to section 6, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, material or other information and has verified in writing the legal authority to maintain confidentiality; and (ii) receive documents, materials or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal and international financial regulatory agencies, including members of any supervisory college as defined in said subsection (x) of said section 206C of said chapter 175, and from the NAIC, and shall maintain as confidential or privileged any documents, materials or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information. (d) The sharing of information and documents by the commissioner pursuant to this chapter shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this chapter. (e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials or other CGAD-related information shall occur as a result of disclosure of such CGAD-related information or documents to the commissioner under this section or as a result of sharing as authorized in this chapter.

M.G.L. c. 176W, § 6 NAIC and third-party consultants

c. 176W, § 6. NAIC and third-party consultants Section 6. (a) The commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurer's compliance with this chapter. (b) Any persons retained under subsection (a) shall be under the direction and control of the commissioner and shall act in a purely advisory capacity. (c) The NAIC and Third-party consultants shall be subject to the same confidentiality standards and requirements as the commissioner. (d) As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this chapter. (e) A written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to this chapter shall contain the following provisions and expressly require the written consent of the insurer prior to making public information provided under this chapter: (i) specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this chapter; (ii) procedures and protocols for sharing by the NAIC only with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality; (iii) a provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant shall remain with the division and the NAIC's or third-party consultant's use of the information is subject to the direction of the commissioner; (iv) a provision that prohibits the NAIC or a third-party consultant from storing the information shared pursuant to this chapter in a permanent database after the underlying analysis is completed; (v) a provision requiring the NAIC or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer's CGAD-related information; and (vi) a requirement that the NAIC or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this chapter.

M.G.L. c. 176W, § 7 Sanctions

c. 176W, § 7. Sanctions Section 7. Any insurer failing, without just cause, to timely file the CGAD as required pursuant to this chapter shall, after notice and hearing, be subject to a penalty of $500 for each day of delay, to be recovered by the commissioner. The maximum penalty under this section shall be $10,000. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

M.G.L. c. 176W, § 8 Severability

c. 176W, § 8. Severability Section 8. If any provision of this chapter except for section 5, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this chapter which can be given effect without the invalid provision or application, and to that end the provisions of this chapter, except for section 5, shall be severable.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter176WFetched: 10/20/2026