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Enhance Your Society’s Board Performance with New NFCA Tool

I’ve been invited to address a number of NFCA member-society conventions this year, and in virtually every case, the CEO has asked me to focus my remarks on the need for fraternals to modernize their governance structure and enhance the performance of their boards.  That’s a good sign, because of the three major challenges we face as a system – governance, solvency, and relevance – it’s governance over which we have the most control.  In fact, you can make a good case that we can’t effectively address the solvency and relevance issues without first modernizing how our organizations are governed.  The bottom line is that you can’t create the fraternal of the future on the chassis of the past.

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Financial Exams, Ft. Hood Memorial, and a Father’s Wisdom…

NAIC Plans Review of RBC System – Don’t know if you’ve seen the article in today’s National Underwriter, but the NAIC is planning to conduct the first thorough review of the risk-based capital (RBC) system in nearly two decades.  Regulators use the RBC ratio to adjust the value of an insurer’s holding to reflect the estimated level of risk and, after the adjustments are made, to determine whether the insurer has enough capital to meet its obligations.  Regulators may step in when an insurer’s RBC ratio falls sharply or falls below a “regulatory intervention” level – typically 300% or lower.  The NFCA provides members a worksheet to calculate their RBC ratio and submit it to those state regulators who require fraternals to file such data.

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Corporate Governance: Maybe the Most Important Change Agent in Your Organization

We talk a lot about the need for change in our system.  Much of that talk revolves around the issues of solvency and relevance.  When fraternal executives discuss these issues, I find that they frequently equate the concept of change with the process of merger.  Consolidation is certainly one method of implementing change in an organization, but it is not the solution for every society, and it is not the only change a society can implement in order to reinvent itself. 

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