d. Whether compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels.
e. Any claw back provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted.
f. Any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees.
4. The insurer’s or insurance group’s plans for CEO and senior management succession.
(e) The insurer or insurance group shall describe the processes by which the board, its committees and senior management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer’s business activities, including a discussion of the following:
1. How oversight and management responsibilities are delegated between the board, its committees and senior management.
2. How the board is kept informed of the insurer’s strategic plans, the associated risks, and steps that senior management is taking to monitor and manage those risks.
3. How reporting responsibilities are organized for each critical risk area. The description should allow the commissioner to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the board. This description shall include the following critical risk areas of the insurer:
a. Risk management processes. An own risk and solvency assessment summary report filer may refer to its assessment summary report under s. 622.09, Stats. b. Actuarial function.
c. Investment decision-making processes.
d. Reinsurance decision-making processes.
e. Business strategy and finance decision-making processes.
f. Compliance function.
g. Financial reporting and internal auditing.
h. Market conduct decision-making processes.
SECTION 5. EFFECTIVE DATE. A rule is effective on the first day of the month commencing after the date of publication in the Wisconsin Administrative Register in accordance with s. 227.22 (2), Stats. Dated at Madison, Wisconsin, this ____ day of March 2020.
Mark V. Afable
Commissioner
