The Board of Directors of County Hall Insurance Company, Inc., A Risk Retention Group, Inc. (the “Corporation”) has adopted these Governance Standards (“Governance Standards”) to promote appropriate governance of the Corporation for the benefit of its shareholders, policyholders and other interested persons. To the extent of any conflict or inconsistency with the Corporation’s Bylaws, the Bylaws shall control.
Mission of the Board of Directors
The Board of Directors is responsible for overseeing the policies, strategies, operations, and management of the Corporation. The Board collectively, and each Director individually, is responsible for the following:
In all actions taken by the Board, the Directors are expected to exercise their business judgment in a manner they reasonably believe to be the best interests of the Corporation. In discharging this obligation, each Director is entitled to rely upon any Board Committees of which the Director is not a member if the Director reasonably believes the committee merits confidence, the Corporation’s officers and employees whom the Director believes are reliable and competent in the matters presented, and legal counsel, public accountants and other outside advisors as to matters the Director reasonably believes are reliable and competent in the matters presented. Each Director of the Corporation is expected to spend the time and effort necessary to properly discharge the Director’s responsibilities.
Definition of Independence
The Corporation’s Board of Directors shall consist of a majority of Independent Directors, as defined herein:
The Board of Directors shall annually review compliance with the standards of independence set forth above, maintain a record of these determinations and provide these determinations to the Commissioner of Insurance of the State of North Carolina promptly upon request.
Director Qualification Standards
The following qualifications are required to serve as a Director of the Corporation:
The Board as a whole should possess the following core competencies, to the fullest extent practicable:
Nomination and Election of Directors
The following process will be observed for nomination of candidates for Director of the Corporation:
Director Orientation and Continuing Education
The Corporation shall provide a Director orientation program. This program shall be designed to enable new Directors to become familiar with the Corporation’s operations, policies, strategies, finances, and other key policies and practices.
Directors shall be encouraged to participate in continuing education programs. The Board of Directors or any Committee designated by the Board of Directors for such purpose shall make efforts to notify Directors of appropriate continuing education opportunities, and oversee and periodically evaluate the Director orientation and continuing education programs.
Ethics and Conflicts of Interest
All Directors, officers and any employees must adhere to the Corporation’s Code of Business Conduct and Ethics. Each Director, officer and employee shall read and acknowledge the Code of Ethics upon joining the Corporation and annually thereafter.
The Board of Directors of the Corporation shall determine the amount of Director compensation, if any, in accordance with the Bylaws of the Corporation. In making such determination, the Board shall consider whether a Director is otherwise compensated by the Corporation as an employee or service provider.
Board Performance Evaluations
In order to continuously improve its performance, the Board of Directors shall conduct a performance self- evaluation at least annually.
Access to Senior Management and Employees
The Board should serve as a resource for senior management and the Corporation’s service providers in matters of planning and policy. Directors shall have full and open access to senior management, service providers and independent advisors of the Corporation as may be necessary and appropriate for Directors to serve the best interests of the Corporation.
Access to Outside Advisors
The Board of Directors shall have the right to retain independent financial, legal, compensation, or other experts or consultants, for any purpose reasonably related to the duties of the Board of Directors or any Board Committee. The reasonable expenses of such experts or consultants shall be paid by the Corporation.
The Board, through the Audit Committee (or, if permitted by the Commissioner of Insurance of the State of North Carolina, by direct Board appointment and interface with the Auditor), shall engage an independent auditor to audit the Corporation’s financial statements, to review internal controls over the Corporation’s financial reporting, examine the amounts and disclosures in the financial statements, assess the accounting principles and significant estimates made by the Corporation’s management, and evaluate the Corporation’s overall financial statement presentation, including but not necessarily limited to the following:
If a separate Audit Committee shall be designated by the Board of Directors of the Corporation or required by the Commissioner of Insurance of the State of Nevada, the following requirements shall apply:
Service Provider Contracts
The term of any material service provider contract with the Corporation shall not exceed 5 years. Any such contract, or its renewal, shall require the approval of the majority of the Corporation’s independent directors. The Corporation’s Board of Directors shall have the right to terminate any service provider, audit or actuarial contracts at any time for cause, after providing adequate notice as defined in the contract. The service provider contract is deemed “material” if the amount to be paid under such contract is greater than or equal to either five percent (5%) of the Corporation’s annual gross written premium or two percent (2%) of its surplus, whichever is greater.
Disclosure Regarding Corporate Governance
These Governance Standards and the Bylaws of the Corporation shall be made readily available to the policyholders of the Corporation and to the shareholders and policyholders upon request.
Adopted by the Board of Directors of County Hall Insurance Company, Inc., A Risk Retention Group (the “Corporation”), on June 30, 2017.