FPCA Homeowners Division Members: Alternate MGA Regulation Legislation Anticipated by April 6
Apr 1, 2010
Florida Property Casualty Homeowners’ Division Members:
Certain insurance industry interest groups have been involved with negotiating a proposal with the Florida Office of Insurance Regulation (“OIR”) relating to managing general agencies (“MGAs”) and affiliates.
IMPORTANT: Please note that this proposal, a copy of which is attached, has not been approved or accepted by either the insurance industry groups or the OIR at this time.
The attached bill draft:
- Amends Florida statutes 626.7451 relating to MGAs to require an MGA to maintain separate business records unless it is a controlling person at an insurance company and also writes business for only one insurer;
- Provides that an insurer cannot pay an MGA anything outside of the terms of a written agreement unless the insurer notifies the OIR at least 30 days prior to the payment and the OIR does not object;
- Provides that an insurer cannot engage a third party to perform duties required of an MGA unless the insurer has notified the OIR 30 days prior and the OIR does not object. In the case of a catastrophe, the insurer may engage a third party to perform these duties, but must notify the OIR within 30 days of any engagement;
- Amends Florida statutes 628.801 relating to insurance holding companies to state that an insurer is required to file certain specific financial information with the OIR if the insurer files an annual statement indicating a loss in surplus of 20 percent for the prior year, or a loss of more than 35 percent in statutory surplus for the prior two years.
Please review the attached draft and provide your comments and concerns to Katie Webb (kwebb@cftlaw.com) as soon as possible.
We anticipate that some version of an MGA regulation proposal will be offered on April 6 for attachment to the Senate omnibus insurance bill, SB 2044. At this time, it is unclear what that proposal will be.
