N.Y. Government Pressuring Regulated Insurance Companies into "Diversity" Hiring

From the N.Y. Department of Financial Services last month:

To:  All New York Domestic and Foreign Insurance Companies

Re:  Diversity and Corporate Governance

As Superintendent of the New York State Department of Financial Services (DFS), I have consistently stressed the critical importance of diverse perspectives to problem-solving.  Research shows that diverse teams perform better, innovate more, and are more effective at managing risks….

For all the reasons outlined in this circular letter, DFS expects New York-regulated insurers to make the diversity of their leadership a business priority and a key element of their corporate governance….

DFS has evaluated different regulatory approaches to promote DEI in the insurance industry, including the imposition of quotas and the collection and disclosure of diversity data on a company-by-company basis…. Based on our research and outreach, we have determined that the best way for DFS to support the insurance industry's DEI efforts is by collecting and publishing data relating to the diversity of corporate boards and management. Data collection is essential to identify areas for improvement, set goals and measure progress toward those goals. Given the limited availability of insurance-specific diversity data, making that information public will allow companies to assess where they stand compared to their peers and, we hope, raise the bar for the entire industry. Transparency is a powerful catalyst for change….

As a first step, DFS will collect data from New York domestic and foreign insurers with more than $100 million in annual New York premiums relating to the gender, racial and ethnic composition of their boards and management as of December 31, 2019 and 2020, including information about board tenure and key board and senior management roles….