Conservation & Liquidation Governance Principles

CLO activities are overseen by an Oversight Committee composed of three senior executives of the California Department of Insurance. The current committee members are Catalina Hayes-Bautista, Chief Deputy Insurance Commissioner, Kenneth Schnoll, Deputy Commissioner and General Counsel, and Susan Bernard, Deputy Insurance Commissioner, Financial Surveillance Branch. The Committee meets three times a year.

The Oversight Committee, as representatives of the Insurance Commissioner and estate claimants, is committed to the achievement of maximizing distributions to claimants with the highest standards of integrity and ethics. In that regard, the Oversight Committee has adopted these principles to provide an effective governance framework for the CLO, intending to reflect a set of core values that provide the foundation for the CLO's governance and management systems and its interactions with others.

Ethics and Values
The Oversight Committee and management are jointly responsible for managing and operating the CLO's business with the highest standards of responsibility, ethics and integrity. In that regard, the Oversight Committee expects each committee member, as well as each member of senior management, to lead by example in a culture that emphasizes trust, integrity, honesty, judgment, respect, managerial courage and responsibility.

Furthermore, the Oversight Committee also expects each committee member and each member of senior management to act ethically at all times and to adhere to the policies, as well as the spirit, expressed in CLO's Code of Conduct. The Oversight Committee will not permit any waiver of any ethics policy for any committee member or executive officer.

Roles of Oversight Committee and Management

Role of Oversight Committee - It is the responsibility of the Oversight Committee to direct, guide and oversee the conduct of the CLO's business, and to ensure that the interests of the Commissioner and estate claimants are being served. In carrying out that responsibility, the Oversight Committee considers its primary functions to include the following:

  • Management planning and oversight - Selecting and evaluating the Chief Executive Officer (CEO).
  • Strategic and operational planning - Reviewing, understanding and approving long-term strategic plans and annual operating plans, and monitoring the implementation and execution of those plans.
  • Major CLO actions - Reviewing, understanding and approving significant financial and business transactions and other major CLO actions.
  • Financial reporting - Reviewing, understanding and approving financial statements and reports, and overseeing the establishment and maintenance of controls, processes and procedures to ensure accuracy, integrity and clarity in financial and other disclosures.
  • Governance, compliance and risk management - Establishing and maintaining governance and compliance processes and procedures to ensure that the CLO is managed with the highest standards of responsibility, ethics and integrity.
  • General advice to management - Providing general advice and counsel to the CEO and senior management in connection with issues arising during the course of managing the CLO's business.

Role of Management - It is the responsibility of management, under the direction of the CEO, to conduct the CLO's business and affairs in an effective, responsible and ethical manner, consistent with the principles and direction established by the Oversight Committee. In carrying out that responsibility, management is charged with the following:

  • Organizing management - Selecting qualified management and implementing an organizational structure that is efficient and appropriate for the CLO's operations and culture.
  • Strategic and operational planning and implementation - Developing long-term strategic plans and annual operating plans; presenting those plans to the Oversight Committee; implementing and executing approved plans; and recommending and executing changes to those plans as necessary.
  • Managing risk - Identifying and managing the risks that CLO undertakes in the course of carrying out its business and managing the CLO's overall risk profile.
  • Financial reporting - Ensuring the integrity of the financial statements and reports by implementing and supervising the operation of systems, controls, processes and procedures that allow the CLO to record, process, summarize and report information timely and accurately. To produce financial statements and other disclosures that fairly present the CLO's financial condition and results of operations, and permit the Commissioner and estate claimants to understand the CLO's business, financial soundness and risks.