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NASW Risk Retention Group Rated Excellent in Financial Strength

NASW RISK RETENTION GROUP


GOVERNANCE STANDARDS




GOVERNANCE STANDARDS


INTRODUCTION

The Board of Directors of NASW Risk Retention Group, Inc. (“the Corporation”)
has adopted these Governance Standards to promote effective governance of the
Corporation. The Board of Directors will review these Governance Standards
periodically and may amend them as it deems necessary or appropriate to ensure
proper governance of the Corporation or compliance with District of Columbia
law.


PROCESS FOR ELECTING DIRECTORS

As provided by the Corporation’s Bylaws, the Corporation is managed and directed
by a Board of Directors consisting of up to nine voting Directors and two ex
officio non-voting Directors. The two non-voting Directors are the Chief
Executive Officer of the National Association of Social Workers (NASW) and the
Chief Executive Officer of NASW Assurance Services, Inc. (ASI). ASI is a
wholly-owned subsidiary of NASW and the lender of the Corporation’s initial
capital, in the form of surplus notes. The exact number of voting Directors is
determined from time to time by the Board of Directors. ASI has the right to
nominate up to one-third of the voting Directors for election to the Board. The
rest of the voting Directors are nominated by the Board of Directors. All voting
Directors, including those nominated by ASI, are elected by the Members at the
Annual Meeting of the Membership. When the surplus notes made to the Corporation
by ASI are repaid in full, ASI’s right to nominate Directors will expire.


DIRECTOR QUALIFICATIONS

The following qualifications are required to serve as a Director:

 * Honesty and integrity
 * Relevant education, training, experience, and credentials
 * Relevant business competency
 * Sound business judgment

The Board as a whole should possess the following core competencies, to the
fullest extent practicable:

 * Industry knowledge
 * accounting and finance
 * business judgment
 * management/administration
 * regulatory compliance
 * risk management
 * leadership/vision

The Board of Directors shall have a majority of independent Directors. Whether a
Director is independent shall be determined by the Board of Directors annually
in accordance with standards established by District of Columbia law. The Board
of Directors shall maintain a record of its determinations and shall report its
determinations to the District of Columbia Department of Insurance, Securities
and Banking promptly upon request.


DIRECTOR DUTIES AND RESPONSIBILITIES

Directors have a fiduciary obligation to the Corporation to act with diligence,
loyalty and care when carrying out their responsibilities. The Board of
Directors shall oversee and direct the operations of the Corporation. Their
activities in this regard will include the following:

 * Strategic planning
 * Establishing financial and operational objectives
 * Providing direction to management to achieve the Corporation’s objectives
 * Developing corporate policies
 * Overseeing the annual audit and external auditors
 * Evaluating performance and financial results
 * Monitoring compliance with the Corporation’s Articles of Incorporation,
   Bylaws and Governance Standards
 * Monitoring compliance with all laws applicable to the operation of the
   Corporation


ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS

Directors shall have direct access to the Corporation’s management, independent
auditor and advisors. The Board of Directors may retain independent advisors as
it reasonably deems necessary and appropriate to meet its obligations to the
Corporation.


DIRECTOR COMPENSATION

Directors will receive no compensation other than reimbursement for reasonable
travel and other expenses incurred to attend Board of Directors and Committee
meetings or otherwise incurred to fulfill their duties as Directors.


DIRECTOR ORIENTATION AND CONTINUING EDUCATION

New Directors will receive appropriate orientation materials, including the
Corporation’s Plan of Operation, financial statements, Bylaws, Governance
Standards and Code of Business Conduct and Ethics. Upon request, new Directors
may participate in an orientation program with incumbent Directors and senior
management to discuss topics such as operations, compliance practices, financial
operations and organizational structure. Directors shall from time to time
attend insurance industry conferences, webinars or seminars to further their
knowledge and understanding of the Corporation’s industry and shall stay
informed about legislative, regulatory and other developments related to risk
retention groups and the professional and general liability insurance
industries.


POLICIES AND PROCEDURES FOR MANAGEMENT SUCCESSION

The Board of Directors will work with senior management as appropriate to
develop succession plans for the Corporation’s senior officers. The process
shall include the designation of appropriate officers or a Committee of the
Board of Directors to identify and interview individuals qualified to succeed
senior managers and the presentation of recommendations for succession to the
Board of Directors.


ANNUAL PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

The Board of Directors will work with senior management to develop forms and
procedures for the Board of Directors to conduct self-evaluations of its
effectiveness in carrying out its responsibilities. Self-evaluations shall be
conducted and reviewed on an annual basis.


SERVICE PROVIDER CONTRACTS

The term of any material service provider contract with the Corporation shall
not exceed five (5) years. Any such contract, or its renewal, shall require the
approval of the majority of the Corporation’s independent Directors. For
purposes of this section, the term “material service provider contract” has the
same meaning as stated in 26-A DCMR § 3775.99. The Board of Directors shall have
the right to terminate any service provider, audit or actuarial contract at any
time for cause after providing notice as defined in the contract.


DISCLOSURE OF GOVERNANCE STANDARDS

The Corporation will post these Governance Standards on its website or make them
available to the Corporation’s Members by other electronic means and shall
provide them to Members upon request.


RELATIONSHIP OF GOVERNANCE STANDARDS TO BYLAWS

If there is any conflict between these Governance Standards and the Bylaws of
the Corporation, the Bylaws shall govern. Adopted by the Board of Directors:
April 6, 2018.

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