Managing General Agents (MGAs) are leaders of the wholesale insurance market place and function as an intermediary managing the relationships among policy holders, retail producers and the insurance carriers. These agents provide underwriting and administrative services and have the authority to accept and appoint placement from retail agents on behalf of the insurers they represent. Generally, MGAs market more unusual coverage, such as professional liability, for which a particular expertise is required. Insurers benefit from MGAs where such expertise is not available within the company and would be costly to develop.
The purpose of MGAs hired by insurance companies is to supervise their business in a particular territory and they are often referred to as wholesalers, but in no way do they compete with brokers and do not deal with customers directly. MGAs have a unique relationship with their carriers. Depending on the relationship, a MGA may perform tasks normally performed by an insurer; which include, handling claims, issuing policies, sub-contracting with independent agents, collecting premiums and negotiating commissions to name a few. As agents of the insurer, they perform the basic insurance functions for the carrier of underwriting and policy issuance.
According to the American Association of Managing General Agents, an MGA can be of used in any line of insurance and includes Insurers WHO COMPLETE are On “Admitted or not, direct or otherwise, broker or agent View system, contract / appoint or open-broker a sub-production, or any combination of these. ” Typically, MGAs are utilized most in the excess and surplus lines insurance market, but are also found in the commercial and personal insurance market.
When thinking about how MGAs work, it’s best to consider traditional insurance market access where it flows from the insurance company to the retail agent and finally to the insurance buyer. Now consider how the surplus lines market access flows. It works in much the same fashion with one major difference. The MGA acts as the intermediate between the insurer and the agent. In this way, market access flows from the insurance company, to the intermediary, the retail / out of state agent and finally to the buyer.
MGAs are generally entitled to a contingency commission on all business written within their territory. They take a percentage of the commission that would usually go to the producing insurance agent. Being an MGA means personal accountability as well as responsibility for producers. MGAs take on the significant costs involved in being a wholesaler and the investment needed to succeed.
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When you take over the management of a commercial or retail property today, the information that you gather from the outgoing property manager or landlord will be critical to the establishment and future success of your property management processes.
Information is Critical
Lack of information in the handover process means problems and potential errors in the future. On that basis you should have a specialised handover process that you can implement on and with the handover of every property type within your local area. A checklist will help your activities as you bring in the new property to the management portfolio.
Here are some ideas to incorporate into your handover checklist:
- Get complete and comprehensive details of all leases and licensed occupied areas within the property. You will need to check these against the tenants physically in occupancy and the rental invoices that are raised for tenancy payment. Everything has to cross relate accurately.
- Copies of lease documents should be checked against the original documentation. Also look for side agreements for any extension or variance documentation relating to the original lease.
- Copies of correspondence relating to existing tenancy matters should be handed to you. Ask for this specifically and drill down on the details of each matter.
- Get copies of the current rental invoices and cross reference these to the tenancy schedules for the property. It is not unusual to come across in errors in the tenancy schedule or the rental invoices.
- The tenancy schedule should be checked against the actual leases and other occupancy papers and the signed documentation between the landlord and tenant.
- Check all outgoings charges and expenses that are applied to the tenancies within the managed property. The charging process should be shown on the rental invoices; you will need to check this amount and the process of recover that is adopted. It is not unusual to see errors in the outgoings recovery with tenants in managed properties. The process of checking will involve you getting copies of the current outgoings budget and the recent outgoings reconciliation.
- The arrears that apply to the property and any tenancies should be identified as part of the handover. They are sometimes discharged at the time of settlement, although the question should be raised in case you are taking over the ongoing pursuit of the arrears with any existing tenants. If that is the case you will need copies of all previous correspondence and claims.
- Current vacant tenancies within the premises may be the subject of lease negotiation. You will need copies of the lease offers that are or have been made and the status of the existing negotiations.
- Details of the maintenance issues within the building will be required. The essential services within the building will be critical maintenance contracts to identify early in the Handover. Any threats to the stability and function of essential services should be identified and addressed immediately. The maintenance contractors for the building will understand the function of the existing plant and machinery; get details of these contractors and then set up meetings as quickly as possible.
- Ask about any orders or notices that apply to the property or any part thereof. Check out any encumbrances, rights of way, or easements that apply to property usage.
So these are some of the main items that apply to the property management handover process. There will always be more issues and items to look at although these items listed above are the big ones to immediately get under control.
I have discussed high security keys and locks in the past, but what makes a lock and key high security? A lot of manufacturers consider at least some of the locks they manufacture high security. So how do you know that you are getting what you pay for? Because you will pay far more for one of these locks than a regular lock that you can buy at your local big box store.
Here are some of the things to look for in a high security lock:
- The locks and keys will be precision made, usually with a CNC machine rather than die casting
- They are usually made out of brass or steel
- If brass, they will have hardened steel pins embedded into the lock face for drill protection
- The keyway and key should be protected with US and foreign patents
- The key blanks should be restricted to Service Centers and Locksmiths that are under contract to the manufacturer for the purpose of key control
The above list is not all inclusive but meant to provide the major points. There are a few items that I will explain further in an effort to give definition to some of the words used above that may not be familiar to all.
Keyway: In the simplest form, a keyway is a design on a key such as key cuts, spacing and angles and the matching design that is manufactured into the lock cylinder. Some manufacturers use a combination of cuts, spacing and angles along with grooves cut into one or both sides of the key. These side grooves will match the grooves in the lock. When applying for a patent these are the items that are usually patented.
Key Control: This is the ability to control not only the key blanks but also the cut keys. To demonstrate this let's assume that the manufacturer sends 10 key blanks to one of their Service Centers. That service center cuts 10 key blanks to a secure code for one of their customers. That customer receives the 10 cut keys and records to whom they give them to. Throughout this process the keys can be accounted for all the way to the end user.
All of this comes at a price that will be at least 50% higher than a standard lock used for the same purpose. This goes back to that same question; what are you trying to protect and how much is that worth to you.