Committee performs a vital function by informing various elements both inside and outside the insurance industry
The AAMGA Communications Committee may have been around "forever," as Joe Hutelmyer, board liaison for the committee and currently SVP/Eastern Region, puts it, but in the last five years the committee has taken on an increasingly more significant role.
"That can be seen in the budgetary increases we've had over the years," says Hutelmyer. "Five years ago, we had a budget of $12,000. Today, our budget is $50,000. That, in itself, is a clear indication that the AAMGA board recognizes the importance of our committee and is willing to fund its activities."
One of the primary functions of the committee, according to Hutelmyer, is to "get our members out there" to communicate with our customers--the retailers--as well as with legislators and the public when particular issues arise that involve the property/casualty insurance industry. "For example, after September 11, we had our members make themselves available to answer any questions about claims and coverages. If retail agents are having difficulty finding markets for their risks, we will provide information to them so that they can place their insureds with financially secure insurers."
Another area in which the Communications Committee has become more active, according to Hutelmyer, is in establishing liaisons with the press. "Very often the press needs articles on crisis-type subjects, such as asbestos and medical malpractice. We can provide them with written articles or MGA members to interview. We are also responsible for writing and disseminating press releases to the press, to keep them informed of MGA activities, and to our members to keep them abreast of what is happening within the association. We also give awards to members for the best advertising and print media participation, for the best Web sites and for the best newsletters. The awards are presented at our annual meeting."
But, perhaps one of the most important functions of the Communications Committee is getting the message across to the public, the press, regulators and legislators that members of the AAMGA pride themselves on their expertise and trust. In the late '70s and '80s, some unscrupulous operators in the international insurance arena who called themselves MGAs took advantage of insurers' desires to attract additional capital for investment purposes. These enterprising miscreants were able to obtain the "underwriting pens" of major insurance companies and devised complex insurance and reinsurance schemes to victimize the insurers. During this period, all MGAs were being tarred with the same brush.
"It wasn't just the fault of the miscreants," says Hutelmyer. "In the late 1980s and early 1990s, some insurance companies entered into lines of business where they had little or no expertise and grew too fast. Some of them didn't perform their due diligence properly. We (AAMGA) spend a good deal of time meeting with legislators and attending meetings to let everyone know that we are the 'good guys,' and that being a member of the AAMGA is a badge of honor and trust. To become a member of the AAMGA, an MGA has to meet certain obligations to other MGAs, to the insurance industry and to the communities in which business is conducted."
Hutelmyer says that the AAMGA has a code of ethics to which each member must subscribe. AAMGA members must meet all financial obligations--such as debts owed, premiums due companies, returns due to sub-producers and to policyholders--on a timely basis, says Hutelmyer.
"Our MGAs must do research and remain current on the financial stability of companies with which they place business," says the Communications Committee liaison. "MGAs who are members of the AAMGA must remain current on the laws affecting insurance companies in those states in which the MGAs have authority, advising insurers to the best of their ability on statutes and practices that affect the insurers. In addition, our code of ethics has enforcement provisions. If a member MGA is found guilty of violating state or federal criminal laws, he or she can be expelled from the organization. A pattern of violation of state and/or federal insurance laws will lead to investigation of members in question and action. Evidence of unfair trade practice or maligning other AAMGA members must be brought to the attention of the Ethics Committee."
Hutelmyer says that it is the Communications Committee's mandate to let those who deal with AAMGA members or who regulate them know that the association's members are professionals who know their business and who act in a professional and trustworthy manner. *