On March 16, New York State Superintendent of Financial Services Linda Lacewell announced the issuance of Insurance Circular Letter 2021-5, on diversity (also referred to as “diversity, equity and inclusion” or DEI) and corporate governance. Under the letter:
- The Department of Financial Services
(DFS) expects New York-regulated insurers to make the diversity of
their leadership a business priority and a key element of their
corporate governance, treating diversity like other strategic
priorities. Beginning in 2022, questions relating to an
insurer's diversity-related efforts will be included in
DFS' examination process.
- The best way for DFS to support the
insurance industry's diversity efforts is by collecting and
publishing data relating to the diversity of corporate boards and
management.
- An insurer should strive to have a
board and management team that benefits from the broadest diversity
of skills, experiences and perspectives possible, including those
based on a person's gender, race or ethnicity. Each
company should assess where it stands on these measures as well as
“where it wants to go and how it will get there, taking into
consideration its size and other relevant factors, with a focus on
improvement over time.”
- DFS will collect data from New York
domestic and foreign insurers with more than $100 million in annual
New York premiums relating to the gender, racial and ethnic
composition of their boards and management as of Dec. 31, 2019 and
2020, including information about board tenure and key board and
senior management roles.
- DFS expects to collect this data over
the summer and publish results in the fall. Insurers are
“strongly encouraged” to disclose publicly the
diversity composition of their boards and management. DFS may
continue this kind of information-gathering into the future.
- DFS will organize a webinar focused on diversity best practices and address specific issues that companies have encountered in their diversity efforts.
Originally Published by Kramer Levin, March 2021
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