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DFS Legislative Package: Managing General Agent Licensure


   

CS/CS/CS/HB 1073

Managing General Agent Licensure

pp. 27–33, 36–39, 44–45, 60; §§626.112, 626.171, 626.207, 626.451, 626.731, 626.7351, 626.7451, 626.7455, 626.8734, 626.88, and 648.27.

Eliminates the managing general lines (MGA) license, but not the role of an MGA. It requires an MGA to be a licensed agent and have an MGA appointment. These changes will clarify some of the inconsistency in the MGA statutes. The bill makes technical changes throughout Chapter 626, F.S., to conform terminology to these changes.

Under current law, an MGA is defined as any person managing all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office. In addition, an MGA, is a person acting as an agent for the insurer, who, with or without authority, separately or together with affiliates, produces directly or indirectly, or underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any single quarter or year. The definition also includes that an MGA adjusts or pays claims and/or negotiates reinsurance on behalf of the insurer.

To be an MGA under current law requires an MGA license, but this license type has no pre-licensing requirements or formal examination to determine eligibility. To obtain this license, the only requirements are to complete the application, be eligible to work in the United States, and submit fingerprints for a background evaluation.

Also under current law (§626.731, F.S.), a general lines agent may not hold an MGA license. This is inconsistent with the National Association of Insurance Commissioners’ Model Act because the Act states that a person shall not be an MGA without being licensed as an agent in the state.

Effective date: July 1, 2018
Chapter No. 2018-102, LOF

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