(B) the various elements of compensation awarded in
the insurer's or insurance group's compensation programs and how the
insurer or insurance group determines and calculates the amount of
each element of compensation paid;
(C) how compensation programs are related to both company
and individual performance over time;
(D) whether compensation programs include risk adjustments
and how those adjustments are incorporated into the programs for employees
at different levels;
(E) any "clawback provisions" built into the programs
to recover awards or payments if the performance measures upon which
they are based are restated or otherwise adjusted; and
(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 chief
executive officer and senior management succession.
(h) Oversight. The insurer or insurance group must
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:
(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; and
(3) how reporting responsibilities are organized for
each critical risk area. The description should allow the board 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 may include the following critical risk areas of
the insurer:
(A) risk management processes. An ORSA summary report
filer may refer to its ORSA summary report under Insurance Code Chapter
30;
(B) actuarial function;
(C) investment decision-making processes;
(D) reinsurance decision-making processes;
(E) business strategy/finance decision-making processes;
(F) compliance function;
(G) financial reporting/internal auditing; and
(H) market conduct decision-making processes.
(i) Severability. If any portion of this section, or
its application to any person or circumstance, is held invalid, the
determination does not affect other portions of this section or its
applications that can be given effect without the invalid portion
or application. To this end, the provisions of this rule are severable.
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