OCTOBER 2014                                                                              

Dear Colleagues,

Welcome to our October newsletter; again, any comments, suggested topics or ideas on how to improve this would be gratefully received. 

~The Editorial Board~

 


The Humble Beginnings - by Reg Brown, Chairman of MGAA

As we approach the end of another very successful year for the MGAA I thought it might be a useful exercise to look back to our beginning and reflect on what has been achieved. Those of you who were lucky enough to attend our House of Commons reception on 23rd July 2014 might be forgiven for thinking that these things just happen without appreciating the effort put in by so many people to bring the Association to a point where, I believe, it has come of age. We have achieved a great deal in a relatively short space of time.

So let me take you back to 11th June 2009 when I agreed to attend a meeting with Brian Russell of Anglo Pacific Consultants (APC) and Francis de Zulueta of Alpine Risk Services. They said they needed my help to form a new trade association specifically to represent the interests of MGAs. I remember expressing a great deal of scepticism but agreed to hear what they had to say.

We met in neutral territory – an office in New Bond Street belonging to a company which Alpine “had some links with.” I recall the office was a bit dark and dingy and was in a part of town I do not frequent! I listened to Brian and Francis carefully trying to decide whether they were a couple of visionaries or just slightly barmy.

I was aware that MGAs were getting a pretty bad press at the time and I could see how APC would benefit from having a voice. Alpine invested in a couple of MGAs so they would benefit too. We agreed:

  • That I would give the matter more thought.

  • We would try to form a steering committee made up of interested parties – Sian Fisher and Charles Earle were identified.

  • We needed to talk to other industry bodies – FSA, ABI, BIBA, IIB, BIPAR and Lloyd’s.

  • Although the press was eager for more stories about MGAs it would be too dangerous to talk to them at that stage.

  • Quality benchmarking and training geared to the MGA community were necessary.

  • The steering committee would draft terms of reference, constitution and membership criteria and business plan.

  • That we would check BIBA’s constitution, ownership and whether the board “should be paid something”. (I should say here that none of the board have been paid anything other than expenses).

  • That we would meet again in the City on 21st July 2009.

I was still unsure how we would define an MGA and how many UK MGAs there were. I was determined that we would confine ourselves to the UK and worry about Europe and elsewhere later. Brian’s best guess was that there were about 320 UK MGAs.

I was also unclear how we would attract seedcorn capital to get the Association off the ground.

My scepticism had not subsided by the time of our second meeting. As the minutes put it “RB (after welcoming Sian Fisher and Charles Earle to the meeting) went on to express some scepticism as to the value of forming another trade association in an already crowded arena, where the market is unsure of whom to take note of.”

 

Reg will continue his look back at the beginnings of the MGAA in our next edition due out in December 2014. 

ELTO

A number of members have expressed concerns over the capture of the ERN in its correct format. Whilst there is no suggestion that Brokers are collecting inaccurate reference numbers there is still a worry that “best endeavours” will not be achieved and as a consequence MGAs will be in the firing line should the Regulator wish to make an example of a specific insurer. Consequently we have been asked to remind members of the actual format of the ERM.

ERN Formats

ELTO confirms that each ERN is unique to the employer and will not be replicated. On PAYE records the format for most numbers allocated since 2001 is ‘nnn/aznnnnn’. ‘nnn’ is the 3 digit number for the tax office whose catchment area the employer falls into. ‘aznnnnn’ is the ERN, where ‘n’ is numeric and ‘a’ and ‘z’ are letters. For numbers allocated prior to 2001, the format is ‘nnn/annnnn’ in the majority of cases.

As previously mentioned the ELTO guides give further information on the ERN and ELTO in general. ELTO have also produced a guide which can be issued to policyholders to explain why the industry is now collecting the ERN. For added information click here for the ELTO newsletter should you wish to subscribe.

Compliance Newsletter

For those of you who missed our compliance newsletter you can access this from http://www.mgaa.co.uk/news/compliance-news/2014/august/august-compliance-newsletter/

Compliance Calendar

If you missed our compliance calendar you can access this from http://www.mgaa.co.uk/news/compliance-news/2014/september/regulatory-calendar-(updated-22nd-september-2014)/

Meeting with FCA

On the 1st October, 2014 the MGAA board together with members [approx. 90 registered in total] attended an open door meeting with FCA. James Gerry, Chairman of the Association’s Legal, Regulatory and Compliance Committee chaired the meeting. FCA representatives from supervision and technical areas were also present. Members were invited to put forward questions for debate – a further analysis will be contained within our December newsletter.

Welsh Assembly

The Managing Director joined a dinner hosted by the Welsh Government. In attendance was the Head of Financial & Professional Services Sector and the Head of Economic Development. The round table discussions were numerous and one specific item under discussion was an outline of the development to South Wales over the coming years.

 

House of Commons debate on Motor Insurance

The All Party Parliamentary Group on Financial Services and Insurance held a debate on the issue of Motor insurance. The debate chaired by Jonathan Evans MP looked at recent changes introduced by the “The Legal Aid, Sentencing and Punishment of Offenders” (Laspo) reforms and the success of the insurance industry in combatting fraud; there has been an expectation that motor insurance premiums would reduce. Whilst this is the case for many, there are some – especially in certain cities - who continue to see the cost of their motor insurance rise. This session looked at why this is the case, and what is left to be done to improve the situation for policyholders. The debate speaker was Bradford East MP David Ward.

House of Lords

Following our successful social event at the House of Commons on the 23rd July the Managing Director together with an MGA member attended the House of Lords for a discussion with Lord Sheikh. One of the items under discussion related to the Insurance Bill which was actually being debated on the evening of our social function.

Capacity Exchange

On the 10th September we held our successful Capacity Exchange in Lloyd’s. With a packed house comprising of numerous MGAs, 22 insurers all supported by 15 suppliers this event was viewed as a great success. This was a great opportunity for MGAs to discuss their capacity requirements with interested market practitioners as well as speaking to suppliers. This hive of activity was a good post summer event and allowed MGAs to open up new contacts at a neutral venue.

Flood Re

In our last newsletter we mentioned the new CEO of Flood Re, Brendan McCafferty. The executive of the MGAA have a meeting with Flood Re interim CEO to discuss issues regarding band ‘H’ homes as well as access for SMEs to flood cover which is no longer available in the conventional market. Members are requested that if they are having difficulty in obtaining flood cover for SME commercial coverage then they should email Peter Staddon with their concerns peter.staddon@mgaa.co.uk

American Association of Managing General Agents [AAMGA]

Members will recall that earlier this year the MGAA were awarded Associate Membership of the AAMGA. Bernie Heinz, Executive Director of the AAMGA, was in London on Wednesday 25th September and together with Tom Bolt from Lloyd’s outlined the position regarding delegated authority and American business. This seminar showed how MGAs in the US were shaping the insurance arena and as such reflected the importance of UK Managing General Agents to the UK economy.

During the meeting there was time to catch up with Mark Woodall who is setting up the Canadian Association of Managing General Agents. Mark agreed that further discussions should be held and when they are next in London they will meet the MGAA board.

Underwriting Agencies Council

The Australian UAC will be in London on the 28th October, 2014 and will be meeting members of the MGAA board for open discussions.

Demise of the Car Tax Disc

In a recent publication by RAC they identified that DVLA has been advising UK residents for the last couple of years that paper tax discs, which have been in use since 1921, will become obsolete, with their total removal to apply from 1 October 2014. From that date, drivers can choose to manage their road tax online, through the Post Office or with Direct Debit payments. Enforcement will be via DVLA and police cameras with number plate recognition technology, which can check automatically whether a vehicle is currently taxed or SORN, rather than checking that paper tax discs are affixed to windscreens.

The DVLA believes the new system will not only make it more difficult for drivers to get away with driving untaxed vehicles but also cut down on administration costs to an estimated £10 million annually. The DVLA produced 42.2 million paper tax discs, with a total weight over 72 tonnes - more than a Challenger 2 tank!

Car owners must also be vigilant in ensuring that the DVLA is informed of any change of car ownerships, and any unused tax cannot be transferred with the vehicle. Drivers, instead, will need to claim a refund for the remaining taxation period. Sellers who fail to notify the DVLA that their vehicle has been sold risk a fine of £1,000, in addition to being on the end of any speeding or parking offences incurred by the new owner, resulting in further fines and possible licence penalty points.

The DVLA is reminding car owners that it is the seller's responsibility to return the V5C registration document complete with details of the sale, rather than relying on the new owner to do so, and owners who scrap their vehicles must be in receipt of a Certificate of Destruction, as given by an authorised facility. Until the documents are sent off, drivers are likely to be held liable for any transgressions committed by the car's new owner.

 

MGAA – On the Road

Peter Staddon, Managing Director and Jane Comerford, General Manager have been invited to speak at a number of venues around the country. The next two months will include the following venues.

Manchester       29th October

Cambridge        11th November

Chelmsford       14th November 

Jane and Peter will host coffee after these events and members are welcome to join us for a general discussion.

Other dates for Exeter, Cheltenham, London and Mid Kent are being arranged.

For further details or to join Peter and Jane please contact angela.lacey@mgaa.co.uk

 

Jane and Peter will also be attending the Lloyd's Meet the Market event in Manchester on 7th October.

 

Financial Ombudsman News

The Ombudsman newsletter 119 was issued on the 19th August, 2014.

http://financialombudsmanservice.newsweaver.co.uk/1xznrrjw48t4mf6x091xsi?email=true&a=11&p=47817686

Also newsletter 120 issued ion the 23rd September, 2014

http://financialombudsmanservice.newsweaver.co.uk/1g672vawtsy4mf6x091xsi?email=true&a=11&p=47930417

Information Commissioner Newsletter 2014

The information commissioner has issued their August and September newsletters which can be accessed via the following. The newsletter looks at a number of data protection issues.

http://ico.msgfocus.com/q/1bkxYLu97GcxEsStd2K/wv http://ico.msgfocus.com/q/1bkxYLx47xw9CYqZui9/wv

 

MEMBERS' FORUM

Cover.net

As planning gets underway to celebrate Cover.net’s 20th anniversary next year, the directors have produced a new brochure to introduce their software to a wider market. The Northern Ireland firm offers some of the most complete, powerful and flexible solutions of their kind for the MGA market, and have a long track-record in helping MGAs grow and succeed. For more details on the company, and their ISMIS and CHIME systems please have a look at their brochure: http://www.cover.net/main/CovernetProductBrochure.pdf

BLM

BLM comment on the Giles case recently handed down. Further details below http://ec3view.com/commercial-court-clarifies-insurance-brokers-duties-when-assessing-clients-business-interruption-insurance-cover/

EC3\Legal

Abeje Gordon explores what US & EU Trade Sanctions against Russia looks like and what this means for Managing General Agents (MGAs)

http://ec3legal.com/news-media/publication-blog/regulatory/176-us-eu-trade-sanctions-against-russia-what-this-means-for-managing-general-agents-mgas.html

ReSource Pro

Dan Epstein, CEO of ReSource Pro, explores our society and asks is it facing a crisis of trust. Surveys have shown the public's trust in key institutions like government, insurance, banking and business in general is on the decline. Expertise without trust creates uncertainty, and this uncertainty leads to bad or delayed decisions. By using expertise in the context of trusting relationships, MGAs, program administrators and brokers have an opportunity to win more business and deepen the loyalty of existing business. http://resourcepro.com/resourcecenter/articles.html

PKF Littlejohn

PKF Littlejohn are hosting a tax update aimed at MGAs. Whether involving celebrities being named and shamed for their participation in aggressive tax avoidance schemes, or multinational companies standing accused of not paying their ‘fair share of tax', the issue of tax is rarely far away from the headlines.

To join this breakfast meeting log onto the following

http://www.pkf-littlejohn.com/events/tax-update-for-brokers-and-mgas.php

SSP

SSP have recently prepared an e-trading paper that looks at dispelling the myths regarding e-trading, especially within the commercial lines arena.

Follow the link below to read this white paper

http://www.talented-innovators.com/e-trading

 

Charities

The MGAA are committed to working with charities across the country; below are just two examples:

The Insurance Charities

Attached is a link to the IC current newsletter http://www.theinsurancecharities.org.uk/wp-content/uploads/2014/07/TheInsuranceCharities-News-Summer2014.pdf

CALM

CALM raises awareness and provides support for people who suffer with depression, anxiety and other mental health issues. Their aim is to tackle the high level of suicide amongst men. It is seen as the number one killer of men aged 20 to 49; a demographic that represents not only a large proportion of the insurance industry but also the rest of any major city across the country.

CALM are hosting an event in London on the 10th October at Devonshire Terrace and features a Raffle and an Auction to raise money for CALM www.thecalmzone.net

All the money from the auction will go straight to the charity and the items include:

  • A signed Ryder Cup Flag by the winning Ryder Cup Captain Paul McGinley with limited edition Ryder Cup £5 note (£150 current bid)

  • An official signed football from Chelsea Football Club from the 2014/2015 season. With an certificate of authentication (£120 current bid)

  • An official signed cricket bat from the Little Master, Sachin Tendulkar. With certificate of authentication

  • An official signed goalkeeper glove and collage from the Great Gordon Banks (£150 current bid)

  • Geoff Hurst signed photos

  • Jairzino signed and framed photo

  • Carlos Alberto signed and framed photo

Tickets are available at £5

 

Forthcoming Events

London Market Claims 2014 - 16th October 2014

The London market claims event is being held on the 16th October and is dedicated to improving claims performance for policyholders. http://www.the-insurance-network.co.uk/lmc14.aspx

The conference brings together the entire value chain, including insureds, underwriters, MGAs, reinsurers, brokers, claims adjusters and other service providers - to benchmark and share knowledge and expertise.

This year there’s more discussion time to tackle the practical issues, a stronger focus on pre-placement and more client/risk manager perspectives, as well as a keynote from Dominic Christian at Aon and the results of exclusive research from Gracechurch Consulting.

MGAA Market Briefings

"A Briefing on the Insurance Bill 2014" presented by BLM - 13th October

"Practical Ways for MGAs to use data to grow and improve retention" presented by FTI Consulting - 3rd November

"Legal Expenses" presented by Arc Legal Assistance - 24th November

These will be held in The Old Library at Lloyd's, commencing with a networking buffet luncheon at 12.30pm.  For further details please go to the MGAA website or contact Angela Lacey (angela.lacey@mgaa.co.uk