Revision: June 14, 2016, midnight
\t \t\tHB 1339 - VERSION ADOPTED BY BOTH BODIES
10Mar2016... 0594h
04/21/2016 1418s
1June2016... 2020CofC
1June2016... 2142EBA
2016 SESSION
\t16-2443
\t01/10
HOUSE BILL\t1339
AN ACT\trelative to the corporate governance annual disclosure act and relative to compensation of ski area employees.
SPONSORS:\tRep. Butler, Carr. 7; Rep. Hunt, Ches. 11; Rep. Flanders, Belk. 3; Sen. Bradley, Dist 3
COMMITTEE:\tCommerce and Consumer Affairs
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AMENDED ANALYSIS
\tThis bill establishes the corporate governance annual disclosure act. Under this bill, an insurer shall submit a corporate governance annual disclosure (CGAD) regarding the insurer's corporate structure.
\tThis bill also clarifies the compensation of ski area employees.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10Mar2016... 0594h
04/21/2016 1418s
1June2016... 2020CofC
1June2016... 2142EBA
\t16-2443\t01/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Sixteen
AN ACT\trelative to the corporate governance annual disclosure act and relative to compensation of ski area employees.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 New Chapter; Corporate Governance Annual Disclosure Act. Amend RSA by inserting after chapter 401-C the following new chapter:
CHAPTER 401-D
CORPORATE GOVERNANCE ANNUAL DISCLOSURE ACT
\t401-D:1 Purpose and Scope.
\t\tI. The purpose of this chapter is to:
\t\t\t(a) Provide the insurance commissioner with a summary of an insurer or insurance group’s corporate governance structure, policies and practices to permit the commissioner to gain and maintain an understanding of the insurer’s corporate governance framework.
\t\t\t(b) Outline the requirements for completing a corporate governance annual disclosure with the insurance commissioner.
\t\t\t(c) Provide for the financial treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer or insurance group’s internal operations and proprietary and trade secret information which, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.
\t\tII. Nothing in this chapter shall be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law. Nothing in this chapter shall be construed to limit the commissioner’s authority, or the rights or obligations of third parties, under RSA 400-A:37.
\t\tIII. The requirements of this chapter shall apply to all insurers domiciled in this state.
\t401-D:2 Definitions. In this chapter:
\t\tI. “Commissioner” means the insurance commissioner.
\t\tII. “Corporate governance annual disclosure" or "CGAD” means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this chapter.
\t\tIII. “Insurance group” means those insurers and affiliates included with an insurance holding company system as defined in RSA 401-B.
\t\tIV. “Insurer” shall have the same meaning as set forth in RSA 401-B:3-a, I(b) except that it 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.
\t\tV. "NAIC" means the National Association of Insurance Commissioners.
\t\tVI. “ORSA summary report” means the report filed in accordance with RSA 401-C.
\t401-D:3 Disclosure Requirement.
\t\tI. 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 RSA 401-D:5. Notwithstanding a request from the commissioner made pursuant to paragraph III, 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.
\t\tII. The CGAD shall include a signature of the insurer 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 of such board.
\t\tIII. An insurer not required to submit a CGAD under this section shall do so upon the commissioner’s request.
\t\tIV. 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, and/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 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.
\t\tV. 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 referenced in paragraph I.
\t\tVI. 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, or other state or federal filings provided to the department 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.
\t401-D:4 Rules and Regulations. 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.
\t401-D:5 Contents of Corporate Governance Annual Disclosure; Rulemaking.
\t\tI. 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.
\t\tII. The commissioner may, pursuant to RSA 541-A, adopt rules to establish the material information necessary to meet the requirements of paragraph I.
\t401-D:6 Confidentiality.
\t\tI. Documents, materials, or other information, including the CGAD, in the possession or control of the insurance department that are obtained by, created by, or disclosed to the commissioner or any other person under this chapter are recognized by this state as being proprietary and to contain trade secrets. All such documents, materials, or other information shall be confidential by law and privileged, shall not be subject to RSA 91-A, 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 is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as 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 be construed to require written consent of the insurer before the commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to paragraph III to assist in the performance of the commissioner’s regular duties.
\t\tII. 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 paragraph I.
\t\tIII. The commissioner:
\t\t\t(a) May, upon request, share documents, materials, or other CGAD-related information, including the confidential and privileged documents, materials, or information subject to paragraph I, 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 RSA 401-B:7, with the NAIC, and with third party consultants pursuant to RSA 401-D:7; provided, 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.
\t\t\t(b) May 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 RSA 401-B:7, 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.
\t\tIV. 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.
\t\tV. 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.
\t401-D:7 NAIC and Third-Party Consultants.
\t\tI. 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.
\t\tII. Any persons retained under paragraph I shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.
\t\tIII. The NAIC and third-party consultants shall be subject to the same confidentiality standards and requirements as the commissioner.
\t\tIV. 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.
\t\tV. A written agreement with the NAIC and/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:
\t\t\t(a) 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.
\t\t\t(b) 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.
\t\t\t(c) A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third party consultant remains with the insurance department and the NAIC’s or third party consultant’s use of the information is subject to the direction of the commissioner.
\t\t\t(d) 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.
\t\t\t(e) 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.
\t\t\t(f) 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.
\t401-D:8 Sanctions. Any insurer failing, without just cause, to timely file the CGAD as required in this chapter shall be required, after notice and hearing, to pay a penalty of $100 for each day’s delay up to a maximum of $2,500, to be recovered by the commissioner. The penalty so recovered shall be deposited in the general fund. 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.
\t401-D:9 Severability Clause. If any provision of this chapter other than RSA 401-D:6, 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, with the exception of RSA 401-D:6, are severable.
\t2 Payment of Wages; Ski Area Employees. Amend RSA 275:43-a to read as follows:
\t275:43-a Required Pay. On any day an employee reports to work at an employer's request, he or she shall be paid not less than 2 hours' pay at his or her regular rate of pay; provided, however, that this section shall not apply to [employers] employees of counties or municipalities or ski and snowboard instructional employees at ski resorts, provided that these employees receive other compensation that is at least equal to their rate of pay, and provided further that no employer who makes a good faith effort to notify an employee not to report to work shall be liable to pay wages under this section. However, if the employee reports to work after the employer's attempt to notify him or her has been unsuccessful or if the employer is prevented from making notification for any reason, the employee shall perform whatever duties are assigned by the employer at the time the employee reports to work.
\t3 New Paragraph; Minimum Wage Law; Minimum Hourly Rate. Amend RSA 279:21 by inserting after paragraph V the following new paragraph:
\t\tV-a. These limitations shall not apply to an employee of a ski area who exclusively performs welcoming and guest relation services at a ski area which are not essential to the functional operations of a ski area.
\t\tI. Sections 2-3 of this act shall take effect November 1, 2016.
\t\tII. The remainder of this act shall take effect January 1, 2017.