Lloyd’s announces new multi-year binding authority agreements

AAMGA noted as being integral to this new, streamlined process

Lloyd’s, the world’s specialist insurance market, today issued a market bulletin announcing it is changing its requirements to allow multi-year binding authority agreements of up to 36 months. The bulleting lays out the new process and requirements, while also recognizing the American Association of Managing General Agents (AAMGA) for its years of advocacy on this important issue for Lloyd’s coverholders. The new agreements will take effect in 2016.

“We’ve been advocating for this change for several years to provide peace of mind and security – and frankly good business practices – for all Lloyd’s coverholders,” noted Roger Ware, president of AAMGA. “We met with Lloyd’s Chairman John Nelson as recently as May of this year at our Annual Meeting in Maryland to again press the issue, and we’re pleased to learn of Lloyd’s actions today.”

Currently, Lloyd’s coverholders can only enter into binding authority agreements of up to 18 months, while in most cases these agreements are renewed annually. Under the new multi-year binding authority agreements, Lloyd’s coverholders will be able to establish these agreements for up to 36 months. A streamlined annual confirmation component is included, in which Lloyd’s will send a simple form to its coverholders each November or December requesting appropriate confirmation of binding authority.

Grant Kimball, president of Canadian-based Angus-Miller, an associate member of AAMGA, applauded the change to Lloyd’s binding authority agreements.

“Lloyd’s listened to our industry representatives, reviewed the market landscape and made an appropriate and practical decision,” noted Kimball. “These multi-year agreements will take some of the guess work out of renewing business as well as make it easier to work effectively and efficiently with Lloyd’s.”

AAMGA Proposes Expansion of Membership Ranks: Association Seeks to Lead Broader Wholesale Insurance Market

The board of directors of the American Association of Managing General Agents (AAMGA) today announced it has voted to expand membership to bring all wholesale insurance practitioners who meet membership requirements under a single umbrella. The board made the announcement to members on May 10. Members will vote on bylaw changes that allow for the proposed membership expansion, and include the Association’s new name: the American Association of Wholesale Insurance Professionals.

In addition to managing general agents, national and international insurance companies, business services and state stamping offices, the proposal would add qualifying brokers, managing general underwriters, program administrators, program managers, aggregators and other insurance entities operating on a wholesale basis to the Association.

“We will become a stronger Association that serves as the single, reliable source for the entire wholesale distribution market and, in the process, yield ongoing and long-term benefits and value to existing and future members,” said R.C. Chaffin, AAMGA board president. “The board encourages members to vote in favor of these new opportunities once the bylaw amendments are sent out in June.”

The proposed change follows a two-year strategic review instituted by the board that highlighted opportunities for the Association, and its members, to better adapt to a changing insurance market.

“The wholesale insurance market has undergone dramatic changes in the last decade,” said Bernd G. Heinze, Esq., AAMGA executive director. “We’ve seen an expansion of the wholesale distribution system with new market participants and an increase by those professionals into more specialty lines of business. We want our Association to be ahead of the changes. The Board believes it is better for us to lead rather than follow, a fact that has always been core to our identity.”

Noting three other membership expansions in the Association’s 87-year history, Heinze said the proposed changes will add value to the Association’s membership by better representing the realities of the wholesale insurance market, strengthening the Association with increased membership and expanding business and educational opportunities.

Under the proposed changes, membership standards will include board approval, required minimums for written annual premium, time spent transacting and writing business on a wholesale basis, three recommendations from existing members and compliance with the Code of Ethics. The board proposal will be discussed at the AAMGA annual meeting, May 19-22, 2013 in New Orleans. Balloting on bylaw amendments by the members will follow.

About AAMGA

The AAMGA is the international, professional trade Association representing the wholesale insurance marketplace. Currently, members in 50 states write a combined $20.6 billion in admitted and excess and surplus lines annual premium domestically and internationally. Other members include U.S. and international risk bearing and non-risk bearing members (insurance, reinsurance, retrocessional, captive, Lloyd’s and London market brokers), business services members and each of the state surplus and stamping line offices.

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