Insurance Commissioner encourages greater governing board diversity for insurance companies in California
News: 2018 Press Release
SACRAMENTO, Calif. — California Insurance Commissioner Dave Jones sent letters to the CEOs of at least 50 California-licensed insurance companies encouraging them to increase the diversity of their governing boards. The letters highlight the positive impact of governing board diversity on a company's financial performance. The Commissioner's letter requested each company either disclose its intent to create a governing board diversity policy or develop a strategy or action plan to enhance the diversity of its governing boards within a specified timeframe.
Commissioner Jones has long advocated for increased diversity on insurer governing boards. Created in 2011, Jones' Insurance Diversity Initiative includes encouraging insurance companies to seek executives and board members who reflect the changing demographics and diversity within California and the rest of the country. In 2014, Commissioner Jones issued the Governing Board Diversity (GBD) Survey – a first-in-the-nation survey examining the state of diversity within insurer governing boards.
"Board diversity helps improve corporate accountability and enhance financial performance," said Commissioner Dave Jones. "I am committed to supporting efforts that expand opportunities for diverse representation on corporate boards. Independent studies continue to demonstrate that enhanced board diversity results in better corporate performance, as well as increased economic opportunities for diverse business communities."
In March 2018, Commissioner Jones convened the first GBD Summit bringing together insurer CEOs and board members to share challenges and best practices for advancing governing board diversity within the insurance industry. The GBD Summit included presentation of the findings from McKinsey & Company's latest study, Delivering through Diversity, which underscore the statistically significant link between profitability and diversity on corporate boards. For example, companies in the top quartile for gender diversity were 21 percent more likely to outperform on profitability and companies in the top quartile for ethnic diversity were 33 percent more likely to have industry-leading profitability.
The initial companies selected as part of Jones' GBD engagement campaign were chosen because they do not have women and/or ethnic minorities on their governing boards.
Over the coming months, the department will track the companies' progress and offer them tools and resources to help insurers enhance diversity on their corporate boards.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.