March 28, 2022 by Jason Contant
Property and casualty insurance carriers and brokers have embraced the Canadian Association of Managing General Agents’ (CAMGA) self-regulatory regime, the association’s managing director tells Canadian Underwriter.
Late last year, CAMGA’s board and membership approved and adopted the undertaking as a condition of membership beginning Jan. 1. The voluntary measures and membership requirements include three pillars. At a high level, the pillars are:
Since the self-regulatory regime was unveiled in November, Masnyk says the association has received a handful of calls from carriers asking if a specific MGA was a member and following the code.
“So, the first one or two calls I just said yes or no,” Masnyk says in an interview. “But then after I discovered the reason they were calling is because they’ve adopted that code as one of their points of due diligence in vetting an MGA when they trade with them and offer up capacity.”
To date, about five or six insurers have implemented the code adoption as part of their vetting process, for both new and renewal of delegated authority capacity agreements, Masnyk reports. “Their question was, ‘Is this X MGA following this code/a member of your organization?” he says, adding that most times he responded in the affirmative.
In addition, Masnyk says he’s received several calls from different mid-sized commercial brokerages who “have told me that they’re in the process of moving their entire books to MGAs who are following the code.
“So, that’s quite significant, I think,” Masnyk says. “The reason they give is that they just feel more comfortable in dealing with companies that are following this code, [and] basic minimum standards of operating. In the next year… who knows? It could be dozens and dozens of brokerages switching. It could be dozens of carriers using this as a guideline for their vetting process.”
Masnyk adds the code is a “living document” that’s not static and will be improved. “We are open to changing it if somebody has a good idea and there’s good reason to change it,” he says, adding that there have been no changes to date.
In addition to the undertaking’s three main pillars, it also requires MGAs in the P&C sector to:
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