BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE

MONTANA STATE AUDITOR

 

In the matter of the adoption of NEW RULES I through V relating to corporate governance annual disclosures

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NOTICE OF ADOPTION

 

TO: All Concerned Persons

 

1. On September 22, 2017, the Commissioner of Securities and Insurance, Montana State Auditor, published MAR Notice No. 6-236 pertaining to the public hearing on the proposed adoption of the above-stated rules at page 1536 of the 2017 Montana Administrative Register, Issue Number 18.

 

2. The department has adopted the above-stated rules as proposed: New Rules I (6.6.8701), II (6.6.8702), III (6.6.8703), IV (6.6.8704), and V (6.6.8705). 

 

3. These rules shall become effective on January 1, 2018. 

 

4. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

 

COMMENT No. 1: One commenter requested clarification on the first due date of the corporate governance annual disclosure. 

 

RESPONSE No. 1: The Corporate Annual Disclosure Act has an effective date of January 1, 2018. Likewise, these rules implementing the Corporate Annual Disclosure Act will not come into effect until January 1, 2018. New Rule III(1) states that insurers "shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in [New Rule IV] for the prior calendar year." Since the Act and the rules are not effective until 2018, the first CGAD will be due to the CSI on or before June 1, 2019, for the 2018 calendar year. 

 

COMMENT No. 2: One commenter requested the addition of language to New Rule III(5), to provide that for insurance groups, the CGAD may only be requested by the CSI once it has been "adopted by and filed with the lead state of the group." 

 

RESPONSE No. 2: The CSI disagrees with this request. As set forth in New Rule III, if the lead state of an insurance group has not adopted laws substantially similar to the Corporate Governance Disclosure Act, then the insurance group is not required to create and file a CGAD. However, 33-2-2105(3), MCA, provides that any insurer not required to file a CGAD "shall do so upon the commissioner's request." While the department currently does not intend to exercise that authority, the department declines to limit its authority granted by the Montana legislature.   

 

 

/s/ Michael A. Kakuk                                   /s/ Kristen Hansen             

Michael A. Kakuk                                        Kristen Hansen

Rule Reviewer                                            Chief Counsel

                                                                                   

Certified to the Secretary of State November 13, 2017.