11 February 2014 Insurance

MGAs must step up to regulatory demands

Managing General Agents (MGA) must keep abreast of changing regulation and seek to improve distribution to stay relevant. That is the view of Peter Montanaro, head of delegated authorities at Lloyd’s who spoke to three quarters of the Managing General Agents' Association (MGAA) member organisations at a briefing yesterday.

“MGAs are an important part of the Lloyd’s distribution chain. The market must therefore continue to ensure these entrepreneurial businesses are able to operate effectively while ensuring they manage their relationships to appropriate standards and respond appropriately to the increased regulatory focus on conduct risk,” he said.

“The level of interest and engagement from the MGAA members today demonstrates this is a mutual objective and the team at Lloyd’s intends to work closely with the Association to ensure the goals of all parties are delivered.”

The new Lloyd’s initiatives outlined included the Consumer Product Binding Authority project, which combines coverholder auditing, the introduction of a new level of underwriting authority,  enhanced due diligence and a fifth minimum standard for delegated underwriting focussed on conduct risk.

Peter Staddon, managing director of the MGAA, said: “Our members understand the importance of appropriate regulation. The Association is working with all regulators to ensure that the distinctive position of the MGA in the distribution chain is recognised, understood and reflected in their thinking.

“We welcome the Lloyd’s market’s proposals for delegated authority business.  They are in line with our focus on professionalism and will help to ensure the benefits MGAs bring to the market are clearly identified.”

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