Advice To MGAs: ?Be Educators'

By Mark E. Ruquet

NU Online News Service, May 20, 3:57 p.m. EDT, Phoenix,Ariz.?An industry expert told Managing General Agentsmeeting here that they need to begin thinking of themselves aseducators and teach independent agents the unique needs of thewholesale market when placing risks.[@@]

That was the advice of Pegi Flahault, a consultant for TrilliumAdvisors Inc. (www.Trillium-Advisors.com)based in Black Mountain, N.C., during a session at the AmericanAssociation of Managing General Agents 78^th annualmeeting here titled, "When What You Don't Know About Liability CanHurt You."

Ms. Flahault said with more new retail agents entering theinsurance business and existing retail agents moving into thewholesale agent ranks, there is a lack of understanding of theimportance of policy language for wholesale coverage, which hasbeen made more complicated by the actions of attorneys.

"What seems very simple has gotten very complex," sheobserved.

Part of the problem, she said, comes from insurance companies,which have developed silos of responsibilities between claimsadjusters and underwriters. Because they do not work together on apolicy, they at times come up with different interpretations overthe same policy application, she said, instead of working togetherto get to the same answer.

The other problem, she said, is that some retail agents havegotten "very sloppy," believing that a business owners policycovers all business risks, which is not the case.

"You are going to be trainers for the next couple of yearsbecause retailers need to have explained to them what is the kindof information you need," Ms. Flahault said. "You understand whatyou need and you have to pass it on to them."

To underscore the need to understand the complexity of policylanguage, Ms. Flahault and the group reviewed some past claims andthe legal decisions that they prompted.

The MGA's found in the examples that the court's ultimatedecisions differed decidedly from how they thought the policyshould be applied.

"Sometimes we take for granted what we know is what everyoneelse does, but that's not necessarily true," she continued."Sometimes it's just a matter of presenting things in a differentway to them and they say, ?Gosh, why didn't I think of it that waybefore.'"

AAMGA is based in King of Prussia, Pa.