Which regulator action addresses governance practice deficiencies identified by regulators?

• A. Non-renewal of part/all of the business
• B. Replacing senior management
• C. Run-off
• D. Ordering an increase to the capital & surplus

Answer: (B)

When regulators find governance practice deficiencies, they focus on who is steering the organization and how decisions are made. Replacing senior management directly targets those responsible for governance, bringing in leaders with the authority, expertise, and accountability needed to rebuild governance processes, strengthen controls, and set a stronger tone at the top. This change can catalyze improved oversight, risk management, and accountability across the company.

The other actions address different regulatory concerns. Non-renewal of part or all of the business relates to the insurer’s risk mix and scope, not governance structure. Run-off is about winding down operations. Ordering an increase to capital and surplus deals with financial strength, not governance practices.