CSAA IG ESG Report 2022 - Flipbook - Page 35
Governance
2022
ESG Report
BACK TO TOP
From Our CEO
Environmental
Compliance
Enterprise Risk Management
Our Corporate Compliance function
tracks ongoing compliance activities
throughout the organization,
evaluating our compliance risk profile
across a variety of compliance risk
categories. Compliance reports to the
Chief Legal Officer, who also serves
as the Chief Compliance Officer
reporting to senior management,
the Audit Committee, and Board
of Directors.
Enterprise risk management (ERM)
is ingrained in our culture and
organizational structure from the
top down to ensure explicit risk
decision-making. We have assigned
clear ERM roles and responsibilities
for the Enterprise Risk Office, led
by the Chief Risk Officer; the Risk
Committee, made up of C-suite
members; the ERM Leadership Team;
and management. Additionally, we
have established a robust program
to ensure appropriate oversight of
top enterprise risks and traditional
insurance company risks.
The cross-functional Compliance
Committee brought legal, product
and other relevant business
partners together throughout the
year to educate ourselves on how
new trends across CSAA intersect
with compliance. Topics included
New Regulatory Standards for
Pet Insurance, Demystifying the
Regulatory Sandbox, and Update on
Credit-based Rating Factors. These
connections helped us develop a
more holistic view of the compliance
challenge and better understand
the risks in individual areas of
our business.
We added an entirely new dimension
to our risk management through the
adoption of Task Force on ClimateRelated Financial Disclosures
(TCFD) reporting, to help us better
prepare for climate impacts to our
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Social
Governance
business and policyholders. The
Financial Stability Board (FSB)
created the TCFD to develop
recommendations on the types of
information that companies should
disclose to support investors,
lenders, and insurance underwriters
in appropriately assessing and pricing
a specific set of risks—risks related
to climate change. CSAA’s first TCFD
report was issued in November 2022.
We use internal risk models to
assess our risk profile and establish
economic capital and solvency
requirements, develop risk tolerance,
allocate capital to individual products
and geographies, establish targeted
rates of return to be used in
ratemaking, and aid in strategic and
operational decision-making. The
Audit Committee is responsible for
overseeing the risk assessment and
risk management process
and structure, with the full Board
retaining visibility and involvement
in the process.
Each year AM Best closely evaluates
our balance sheet strength, operating
performance, business profile, and
ERM program to rate our ability
to meet our ongoing insurance
obligations. It determined that CSAA
“has a well-established, formalized
enterprise risk management process
with strong to superior capabilities
that are very well equipped to address
its risk profile.” It also affirmed our
financial strength rating of “A” and
outlook of “stable”—a rating we have
matched or exceeded for 92 years.
Task Force on Climate-Related Financial Disclosure
reporting helps us better prepare
for climate impacts to our business and policyholders.
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