UK MGAs Gather to Support New Managing General Agents’ Association

The UK’s insurance industry has spawned numerous professional and trade associations over the years, but, oddly enough, one of the most important sectors, the managing general agents, or MGA’s, who underwrite on behalf of Lloyd’s syndicates and other insurers, have never formed one – until now.

More than 100 representatives from 70 UK MGAs came together yesterday in The Old Library in the Lloyd’s building to discuss the merits of launching the Managing General Agents’ Association (MGAA). They were nearly unanimous in their support for the organization, as they recognized the need to have their own trade association to “represent and support this important sector of the insurance industry.”

A press bulletin explained that, “In order to gauge the level of support for the new association, a membership proposal was distributed in October. It provided information about how the MGAA might work and be structured and sought comments, feedback and an indication of interest in membership from these businesses.

“The steering committee has received significant interest in the proposal and to join the association either as a full member or associate, which clearly supports its aim to achieve a membership representing 75 percent of the market within the first year of operation.”

The committee’s Chairman, Reg Brown, stated: “This is your opportunity to establish your own trade association and to take control of its future. We need a clear indication that you will support these proposals, become members and, will play your part in the future well being of the MGAA. We need your mandate to continue our work.”

After highlighting some of the important issues for debate, including membership criteria and proposed subscription levels, Brown passed the microphone to steering committee member Sian Fisher of OIM Underwriting to discuss the importance of recognizing the role and importance of the MGA model.

She pointed out that it “is curious that the UK is the only major insurance market place in the world which does not formally recognize the difference between brokers and underwriting agents or provide appropriate representation for both. In the spirit of treating customers fairly and the market initiative transparency and clear definition cannot be right,” she added.

Her comments also raised the issue of how to define a true MGA as opposed to a broker with binders. This question was answered by another steering committee member, David Coupe of Clyde & Co who crystallized the MGAA’s current thinking from a legal perspective referring to the draft constitution of the MGAA and the suggestion that Codes of Conduct and Ethics should be introduced.

Coupe explained: “In light of the recent recommendations made by CEIOPS [Committee of European Insurance and Occupational Pensions Supervisors] concerning possible revisions to the EU Insurance Mediation Directive, this is a perfect time for a trade association to be set up to represent UK MGA’s in this reform process.”

He then introduced the issue of what may be considered an MGA for the purposes of MGAA Membership, which solicited significant debate amongst those attending.

Brown indicated that he was “delighted with the success of the meeting and the positive attitude of those present. The steering committee now has the mandate they sought and will now both analyze the feedback and take steps to get the MGAA well and truly off the ground.”

The bulletin also gave further information on the new association as follows: The Managing General Agents’ Association (MGAA) is a non-profit making organization and has been incorporated as a company limited by guarantee. The Articles of Association as currently constituted will be amended in due course to reflect the wishes of the membership as to how they wish to organize the MGAA’s affairs.

The MGAA is set up with the assistance of The International Underwriting Association of London who will provide secretariat services. The MGAA will work within the professionalism framework of the Chartered Insurance Institute, and adhere to its own Code of Conduct.

The original steering group of underwriting agency practitioners and interested parties, chaired by Reg Brown, will form the initial executive committee of the MGAA until elections can be arranged within the first year of operation. The group may appoint a Chief Executive Officer subject to confirmation by the first full committee.

The bulletin listed the MGAA’s Objectives as follows:
a. To be a central representative body to put the views of members to Government departments and agencies including the FSA, Parliament, the European Commission and European Union Parliament and other relevant organizations.
b. To represent members and their interests in negotiations or discussions with such legislative, regulatory or Government bodies whose subsequent rulings, regulations or controls may impact members, and, when applicable, represent members on bodies or organizations that may have an interest in, or impact on, members.
c. To set best practice guidelines to assist members in ensuring the stability, security and reputation of their individual businesses and therefore the MGAA, while recognizing that ultimate responsibility for those issues rests with individual members.
d. To set best practice guidelines to assist insurance carriers interested in supporting underwriting agencies in ensuring the stability security and reputation of their binding authority arrangements while recognizing that ultimate responsibility for those issues rests with individual insurance carriers.
e. To work actively to improve the underwriting agency sector’s professionalism, stability and competitiveness.
f. To be a technical centre providing commentary, information and guidance on regulatory developments of relevance to underwriting agencies. g. To promote the underwriting agency sector through good public relations and appropriate communications to the trade and general media.
h. To promote market opportunities and through its relationship with the CII and any other appropriate establishments to promote training and education as well as standards and product and service quality.
i. To represent the interests of members to other national and international trade associations in the insurance sector and to the trade association sector itself

Source: Managing General Agents’ Association

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