Governance Standards

Professional Liability

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General Liability

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Cyber Liability

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Governance Standards


The Board of Directors of Preferra Insurance Company RRG, formerly NASW Risk Retention Group, Inc. (“the Corporation”) has adopted these Governance Standards to promote effective governance of the Corporation. The Board of Directors will review these Governance Standards periodically and may amend them as it deems necessary or appropriate to ensure proper governance of the Corporation or compliance with District of Columbia law.

Process for Electing Directors

As provided by the Corporation’s Bylaws, the Corporation is managed and directed by a Board of Directors consisting of up to nine voting Directors and two ex officio non-voting Directors. The two non-voting Directors are the Chief Executive Officer of the National Association of Social Workers (NASW) and the Chief Executive Officer of NASW Assurance Services, Inc. (ASI).

ASI is a wholly-owned subsidiary of NASW and the lender of the Corporation’s initial capital, in the form of surplus notes. The exact number of voting Directors is determined from time to time by the Board of Directors. ASI has the right to nominate up to one-third of the voting Directors for election to the Board. The rest of the voting Directors are nominated by the Board of Directors. All voting Directors, including those nominated by ASI, are elected by the Members at the Annual Meeting of the Membership. When the surplus notes made to the Corporation by ASI are repaid in full, ASI’s right to nominate Directors will expire.

Director Qualifications

The following qualifications are required to serve as a Director:

  • Honesty and integrity
  • Relevant education, training, experience, and credentials
  • Relevant business competency
  • Sound business judgment

The Board as a whole should possess the following core competencies, to the fullest extent practicable:

  • Industry knowledge
  • accounting and finance
  • business judgment
  • management/administration
  • regulatory compliance
  • risk management
  • leadership/vision

The Board of Directors shall have a majority of independent Directors. Whether a Director is independent shall be determined by the Board of Directors annually in accordance with standards established by District of Columbia law. The Board of Directors shall maintain a record of its determinations and shall report its determinations to the District of Columbia Department of Insurance, Securities and Banking promptly upon request.

Director Duties and Responsibilities

Directors have a fiduciary obligation to the Corporation to act with diligence, loyalty and care when carrying out their responsibilities.

The Board of Directors shall oversee and direct the operations of the Corporation. Their activities in this regard will include the following:

  • Strategic planning
  • Establishing financial and operational objectives
  • Providing direction to management to achieve the Corporation’s objectives
  • Developing corporate policies
  • Overseeing the annual audit and external auditors
  • Evaluating performance and financial results
  • Monitoring compliance with the Corporation’s Articles of Incorporation, Bylaws and Governance Standards
  • Monitoring compliance with all laws applicable to the operation of the Corporation

Access to Management and Indpendent Advisors

Directors shall have direct access to the Corporation’s management, independent auditor and advisors. The Board of Directors may retain independent advisors as it reasonably deems necessary and appropriate to meet its obligations to the Corporation.

Director Compensation

Directors will receive no compensation other than reimbursement for reasonable travel and other expenses incurred to attend Board of Directors and Committee meetings or otherwise incurred to fulfill their duties as Directors.

Director Orientation and Continuing Education

New Directors will receive appropriate orientation materials, including the Corporation’s Plan of Operation, financial statements, Bylaws, Governance Standards and Code of Business Conduct and Ethics. Upon request, new Directors may participate in an orientation program with incumbent Directors and senior management to discuss topics such as operations, compliance practices, financial operations and organizational structure.

Directors shall from time to time attend insurance industry conferences, webinars or seminars to further their knowledge and understanding of the Corporation’s industry and shall stay informed about legislative, regulatory and other developments related to risk retention groups and the professional and general liability insurance industries.

Policies and Procedures for Management Succession

The Board of Directors will work with senior management as appropriate to develop succession plans for the Corporation’s senior officers. The process shall include the designation of appropriate officers or a Committee of the Board of Directors to identify and interview individuals qualified to succeed senior managers and the presentation of recommendations for succession to the Board of Directors.

Annual Performance Evaluation of the Board of Directors

The Board of Directors will work with senior management to develop forms and procedures for the Board of Directors to conduct self-evaluations of its effectiveness in carrying out its responsibilities. Self-evaluations shall be conducted and reviewed on an annual basis.

Service Provider Contracts

The term of any material service provider contract with the Corporation shall not exceed five (5) years. Any such contract, or its renewal, shall require the approval of the majority of the Corporation’s independent Directors. For purposes of this section, the term “material service provider contract” has the same meaning as stated in 26-A DCMR § 3775.99.

The Board of Directors shall have the right to terminate any service provider, audit or actuarial contract at any time for cause after providing notice as defined in the contract.

Disclosure of Governance Standards

The Corporation will post these Governance Standards on its website or make them available to the Corporation’s Members by other electronic means and shall provide them to Members upon request.

Relationship of Governance Standards to Bylaws

If there is any conflict between these Governance Standards and the Bylaws of the Corporation, the Bylaws shall govern.

Adopted by the Board of Directors: April 6, 2018.

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