{"data":{"id":"us-ky/krs-304.3-235","jurisdiction":"us-ky","citation":"KRS 304.3-235","heading":"Corporate Governance Annual Disclosure -- Submission to department","body":"or lead state regulator -- Required information and support -- Annual filing of\namended version -- Confidentiality -- Use and sharing of filings and\ninformation -- Parties retained to assist commissioner.\n(1) As used in this section:\n(a) \"Insurance group\" means those insurers and affiliates included within an\ninsurance holding company system as defined in KRS 304.37-010;\n(b) \"Lead state regulator\" means the state insurance regu lator of the state that is\nthe lead state for an insurance group, as determined by procedures outlined in\nthe National Association of Insurance Commissioner's Financial Analysis\nHandbook, as amended; and\n(c) \"CGAD\" means Corporate Governance Annual Disclosure.\n(2) This section shall not be construed to:\n(a) Prescribe or impose corporate governance standards or internal procedures\nbeyond those required under applicable state corporate law; or\n(b) Limit the authority of the commissioner or the department, or the rights or\nobligations of third parties, under this chapter.\n(3) (a) By June 1 of each calendar year, an insurer shall submit a CGAD to the\ndepartment, unless the insurer is a member of an insurance group, in which\ncase either the insurer, or the insura nce group of which the insurer is a\nmember, shall submit a CGAD to the lead state regulator for the insurance\ngroup.\n(b) 1. An insurer or insurance group not required to submit a CGAD under\nparagraph (a) of this subsection shall submit a CGAD to the depart ment\nif requested by the commissioner, but not more than once per calendar\nyear.\n2. The insurer or insurance group required to provide a CGAD under this\nparagraph shall notify the department of the CGAD's proposed\nsubmission date within thirty (30) days of the commissioner's request.\n(4) (a) Subject to paragraph (b) of this subsection, an insurer or insurance group shall\nhave discretion in:\n1. Determining the appropriate format of the CGAD; and\n2. Communicating the information required by this section in the CGAD.\n(b) Notwithstanding paragraph (a) of this subsection, an insurer or insurance\ngroup shall:\n1. Provide sufficient material and relevant information in the CGAD to\nenable the commissioner to  understand the corporate governance\nstructure, policies, and practices used by the insurer or insurance group;\n2. Provide any additional information requested by the commissioner that\nthe commissioner deems necessary to comply with the requirements of\nthis section; and\n3. Ensure that the CGAD is prepared in compliance with all requirements\nof this section.\n(5) (a) Each CGAD submitted to the department shall:\n1. Contain the signature of the insurer's or insurance group's chief\nexecutive officer or corporate  secretary attesting that, to the best of his\nor her belief and knowledge, the insurer or insurance group has:\na. Implemented the corporate governance practices disclosed in the\nCGAD; and\nb. Provided a copy of the CGAD to the insurer's or insurance group's\nboard of directors or to the appropriate committee of the board;\n2. Be as descriptive as possible;\n3. Include any attachments or example documents used in the governance\nprocess; and\n4. Describe the following:\na. The corporate governance framework and str ucture of the insurer\nor insurance group;\nb. The policies and practices:\ni. Of the insurer's or insurance group's most senior governing\nentity and its significant committees; and\nii. For directing the insurer's or insurance group's senior\nmanagement; and\nc. The processes by which the insurer's or insurance group's board, its\ncommittees, and senior management ensure an appropriate amount\nof oversight to the critical risk areas that have an impact on the\ninsurer's business activities.\n(b) 1. An insurer or ins urance group may comply with this subsection by\ncross-referencing other existing relevant and applicable documents, if\nthe documents contain information substantially similar to the\ninformation required by this subsection.\n2. For purposes of this paragraph , \"other existing relevant and applicable\ndocuments\" include but are not limited to:\na. The ORSA Summary Report as defined in KRS 304.3-600;\nb. The filings required under KRS 304.37-020;\nc. Securities and Exchange Commission proxy statements; and\nd. Documents filed in compliance with other state, federal, or\ninternational reporting requirements.\n3. An insurer or insurance group that cross -references documents under\nthis paragraph shall:\na. Clearly identify and reference the specific location of the\ndocuments; and\nb. Include the referenced documents as an attachment to the CGAD,\nunless the documents have already been filed with, or made\navailable to, the department.\n(6) For purposes of completing the CGAD:\n(a) An insurer or insurance group may:\n1. Report information at one (1) of the following levels, depending upon\nthe structure of its corporate governance system:\na. The ultimate controlling parent level;\nb. An intermediate holding company level; or\nc. The individual legal entity level; and\n2. Make disclosures at the level:\na. Used to determine the risk appetite of the insurer or insurance\ngroup;\nb. At which the earnings, capital, liquidity, operations, and reputation\nof the insurer are collectively overseen and the supervision of\nthose factors is coordinated and exercised; or\nc. At which legal liability for failure of general corporate governance\nduties is placed; and\n(b) An insurer or insurance group shall:\n1. Indicate the reporting level used;\n2. If the reporting level was based on the criteria set for th in paragraph\n(a)2. of this subsection, indicate the criteria used to determine the\nreporting level; and\n3. Explain any subsequent changes in reporting level.\n(7) An insurer or insurance group shall maintain documentation and support for all\ninformation provided in the CGAD, which shall be made available to the\ncommissioner upon examination or upon request.\n(8) For each year following the initial filing of a CGAD with the department, the\ninsurer or insurance group shall comply with this section by filing an amended\nversion of the CGAD previously filed. The amended CGAD shall indicate any\nchanges that have been made from the previously filed CGAD. If no changes were\nmade in the information or activities reported by the insurer or insurance group\nsince the previous filing, the insurer or insurance group shall so indicate.\n(9) Subject to subsection (10) of this section:\n(a) Filings, documents, and information in the possession or control of the\ndepartment that are obtained by, created by, or disclosed to the c ommissioner\nor any other person under this section are recognized as being proprietary and\ncontaining trade secrets, and shall be confidential by law and privileged. The\nfilings, documents, and information shall not be subject to:\n1. Disclosure or production by the department under:\na. The Kentucky Open Records Act, KRS 61.870 to 61.884; or\nb. A subpoena; or\n2. Discovery or admission into evidence in any private civil action; and\n(b) The following persons shall not be permitted or required to testify in any\nprivate civil action regarding the filings, documents, or information referenced\nin paragraph (a) of this subsection:\n1. The commissioner or any person who received filings, documen ts, or\ninformation while acting under the authority of the commissioner; and\n2. Any person with whom filings, documents, or information are shared\nunder subsection (10) of this section.\n(10) The filings, documents, and information subject to subsection (9)  of this section\nmay be:\n(a) Used by the commissioner in furtherance of any regulatory or legal action\nbrought against an insurer as part of the commissioner's official duties; and\n(b) Shared, upon request, by the commissioner with the following, if the re cipient\nagrees in writing to maintain the confidential and privileged status of the\nfilings, documents, or information and has verified in writing the recipient's\nlegal authority to do so:\n1. Other state, federal, and international financial regulatory age ncies,\nincluding members of any supervisory college as defined in KRS\n304.37-010;\n2. The National Association of Insurance Commissioners; and\n3. Third-party consultants retained under subsection (14) of this section.\n(11) (a) The commissioner may receive C GAD filings, related documents, or\ngovernance-related information from the following:\n1. Other state, federal, and international financial regulatory agencies,\nincluding members of any supervisory college as defined in KRS\n304.37-010; and\n2. The National Association of Insurance Commissioners.\n(b) Any filing, document, or information received under this subsection, with\nnotice that the filing, document, or information is confidential or privileged\nunder the laws of the jurisdiction that is the source of the  filing, document, or\ninformation, shall be confidential by law and privileged in accordance with\nsubsection (9) of this section.\n(12) The sharing of documents or information by the commissioner under this section\nshall not constitute a delegation of regul atory authority or rulemaking. The\ncommissioner is solely responsible for the administration, execution, and\nenforcement of this subtitle.\n(13) A waiver of any applicable privilege or claim of confidentiality in the filings,\ndocuments, or information received or provided under this section shall not occur as\na result of:\n(a) Disclosure to the commissioner or any person acting under authority of the\ncommissioner; or\n(b) Sharing as authorized in this section.\n(14) (a) The commissioner may retain, at the insur er's or insurance group's expense,\nthird-party consultants and the National Association of Insurance\nCommissioners for the purpose of assisting the commissioner in the\nperformance of his or her regulatory duties under this section, including but\nnot limited to understanding the insurer's or insurance group's:\n1. Risk management framework;\n2. Own Risk and Solvency Assessment (ORSA) and ORSA Summary\nReport, as those terms are defined in KRS 304.3-600; and\n3. CGAD filing.\n(b) As part of the retention process, each party retained by the commissioner shall\nagree, in writing, to the following:\n1. Adhere to the same confidentiality standards and requirements as the\ncommissioner;\n2. Comply with specific procedures and protocols for maintaining the\nconfidentiality an d security of information shared with the retained\nparty;\n3. Comply with specific procedures and protocols for sharing by the\nNational Association of Insurance Commissioners only with other state\nregulators from states in which the insurance group has domiciled\ninsurers. The agreement shall:\na. Specify that the reci pient state agrees to maintain the\nconfidentiality and privileged status of the information received;\nand\nb. Provide verification that the recipient state has legal authority to\nmaintain confidentiality;\n4. Recognize that:\na. Ownership of information share d with the retained party shall\nremain with the department; and\nb. The retained party's use of shared information is subject to the\ndirection of the commissioner;\n5. Verify and give notice to the insurer that the retained party is free of any\nconflict of interest;\n6. Monitor compliance with applicable confidentiality and conflict of\ninterest standards in accordance with a system of internal procedures;\n7. Not store information shared with the retained party in a permanent\ndatabase after the underlying analysis is completed;\n8. Provide prompt notice to the commissioner and the insurer or insurance\ngroup of any subpoena or request received by the retained party for the\ninsurer's or insurance group's filings, documents, or information; and\n9. Consent to interve ntion by an insurer in any judicial or administrative\naction in which the retained party may be required to disclose\nconfidential information about the insurer that was shared with the\nretained party under this section.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49240","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:37Z","sha256":"545c1454cd33929da931cfbd86585e2617c8a4c7d27c02f45a6756024c959d9f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.3-230","next":"us-ky/krs-304.3-240"},"notice":"GroundRules: Original legal text. Not legal advice."}