Diversity disclosure for insurers and holding companies

Summary#

The federal government has proposed the Diversity Information Disclosure (Insurance Companies and Insurance Holding Companies) Regulations under the Insurance Companies Act. If adopted, they would make certain publicly distributing insurers and their holding companies publish board and senior-management diversity data and related policies, with First Nations, Inuit, and Métis reported separately. Comments are invited for 30 days from publication (February 15, 2025), so roughly until March 17, 2025.

What it does#

• Says that “distributing companies” and “distributing insurance holding companies” (terms taken from the Distributing Company and Distributing Insurance Holding Company Regulations) are the businesses covered.
• Requires directors of covered firms to make available information about diversity, including:
  • whether the board has term limits or other renewal mechanisms and a short explanation;
  • whether the firm has a written policy for identifying and nominating candidates from designated groups for director positions, and if so a summary of the policy’s goals and main features;
  • what measures are in place to implement that policy, and the annual and cumulative progress toward its objectives;
  • whether the board or nominating committee considers representation of each designated group when choosing director candidates, and an explanation of how (or why not);
  • whether the company considers representation of each designated group when appointing senior management, and an explanation of how (or why not);
  • whether the company has set targets (numbers or percentages) for each designated group on the board and in senior management, the targets themselves if set, and progress toward them or reasons for not setting targets.
• Requires reporting, for each designated group, the number and proportion (percentage) of:
  • directors, and
  • members of senior management, including data for all major subsidiaries. A “major subsidiary” is one that accounts for 30% or more of consolidated assets or of consolidated revenue.
• Lists the designated groups to be reported in the prescribed form: women, First Nations, Inuit, Métis, persons with disabilities, members of visible minorities, optional other equity-seeking groups, and people belonging to more than one group.
• Provides a standard disclosure table in the schedule that firms must use.
• Says the regulations come into force when Division 40 of Part 4 of the Budget Implementation Act, 2024, No. 1 comes into force, or on the day they are registered if that is later.

Who's affected#

• Distributing insurance companies and distributing insurance holding companies — that is, insurers and holding firms that meet the “distributing” definition in related regulations. (You would need to check those other rules to know exactly which firms qualify.)
• Boards of directors, nominating committees and senior managers at those firms.
• Human-resources and compliance teams who will prepare the disclosures.
• Investors, analysts and the public who use corporate disclosure to assess governance and diversity.
• The disclosure separately highlights First Nations, Inuit, and Métis, so Indigenous communities and organizations may be particularly interested in the results.
• The proposal is sponsored by the Department of Finance (it’s a notice of proposed regulations, not final rules).

Why it matters#

• It would make board and senior-management diversity information more visible and standardized across covered insurers. That helps investors, customers and the public compare firms on representation.
• Requiring policy descriptions, targets (if set), and progress reports could push companies to adopt clearer diversity plans or explain why they do not have them.
• Reporting for major subsidiaries means diversity data could cover significant parts of insurance groups, not just the parent company.
• Firms will face extra reporting work and may need new data-collection processes. The exact cost and administrative burden are not detailed in this notice.
• This is a proposed regulation. Stakeholders have a limited window (about 30 days) to comment before the government decides whether to finalize it.