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

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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….

NEXT: "Governments [May Be Constitutionally Obligated] to Provide ‘Vaccine Passports’"

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  1. In an unrelated matter, New York wonders why so many corporations are leaving the state.

    1. They are imposing the requirement on foreign* insurance carriers as well. Leaving the state is no longer sufficient. You have to stop selling there, too. Of course, they won’t let you do that either. Insurance carriers who want to leave the state still have to leave at least one legal entity registered in the state just in case there’s any “run-off business”.

      * In the context of insurance, “foreign” means headquartered in another state such as Vermont or Delaware, not another country. Though I suppose an international insurance carrier could be subject to this rule, too.

    2. Would a foreign corporation have grounds to seek an injunction in Federal court?

      If so, that would be an interesting case…

      1. Maybe on the grounds that it’s a first step toward prohibited quotas. But a domestic insurer would have equal grounds to challenge the rule on that argument.

  2. “…including the imposition of quotas…” state-mandated racial quotas are explicitly unconstitutional under Bakke. No governmental entity should be studying them as a potential policy, let alone privately threatening their imposition in an attempt to force compliance.

  3. This sounds serious. Put Heterodox Academy’s affirmative action department on it.

  4. Maaybe NY Govt should lead the way and impose racial quotas on itself. Has there ever been a non white governor?

  5. Taken together with Cuomo’s actions against Jewish minorities and his disparaging comments, this looks exactly like part of a pattern of unlawful discrimination.

  6. “make the diversity of their leadership a business priority”

    I look around with pride at the diverse board I have assembled and tell New York, “We got both kinds here, MBAs and lawyers.”

    1. “We have every kind of mix you can have. I have a black, I have a woman, two Jews and a cripple.”

      — James Watt, September, 1983.

      See: http://www.thisdayinquotes.com/2009/09/woman-two-jews-and-cripple.html?m=1

  7. “Research shows that diverse teams perform better, innovate more, and are more effective at managing risks….”

    The research I’ve seen is very weak – no one dares attempt to replicate studies as they might fail to find the superiority of diversity and be ostracized and ejected from academics.

    1. The larger issue was how few studies can be replicated — in anything. Something like half of the psych research published in respected refereed publications couldn’t be replicated.

      And the real issue with the research you mention are all the other variables which they don’t mention.

  8. So here is the issue. If a government entity pressures a private entity to act in a way that would be unconstitutional for a public entity, is that “state action?” Should Constitutional restrictions apply in this situation, or is the private party still treated as private?

  9. Diversity is absolutely important and, yes, a central issue to the economy and politics. https://katfile.me/en/ may be a great provider as well when it comes to protecting individuals.

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