Compliance is often treated as a software problem. MGAs compare features, pricing and dashboards, then assume the right tool will solve everything. In reality, compliance architecture is not about technology at all. It is about understanding how a business operates, where risk sits, and how oversight is enforced as scale increases.
To help address this challenge, Producerflow has outlined five key questions for MGAs looking to build compliance frameworks that support growth rather than slow it down.
The approach shifts the focus away from tooling and towards structure, process and accountability, helping firms avoid the costly mistake of buying systems before understanding what they actually need to control.
Question one: What are you actually writing?
This question sounds basic, but it is where many MGAs go wrong.
Admitted and excess and surplus (E&S) business follow fundamentally different regulatory paths. Admitted lines depend on carrier appointments, state filings and audit-ready documentation. A missing appointment can quickly become an unauthorised transaction, creating exposure that escalates rapidly during a carrier review.
E&S business operates under a different framework entirely, involving surplus lines licences, diligent search requirements, stamping office filings and affidavit management. The compliance burden shifts from appointment tracking to proving due diligence.
The issue arises when MGAs operate in both markets. Producers may need admitted appointments and surplus lines licences at the same time, yet many compliance frameworks only monitor one side of the equation. If policy classification happens after binding rather than during quoting, problems are already embedded in the transaction.
The takeaway is simple: compliance tooling must support both admitted and E&S workflows, and classification should occur before a policy is bound, not after.
Question two: How do you go to market?
Distribution strategy defines compliance exposure. In-house producers are relatively straightforward to manage. The MGA hires them, controls their access and monitors their activity directly. Complexity increases significantly when retail or wholesale partners enter the picture.
At that point, MGAs are no longer tracking individuals alone. They are monitoring agencies, sub-producers, DBAs and shifting affiliations across multiple states. One retail partner may represent dozens of producers, each with different licensing and appointment requirements.
This is where many MGAs fall short. Compliance systems are often configured to track only primary producers, while carrier audits look several layers deeper. The result is a false sense of security until an audit reveals expired licences, missing appointments or unauthorised binding activity.
The key question is not whether a platform can track producers, but how many layers deep it is configured to go.
Question three: Who holds the pen?
Delegated authority changes everything. When an MGA has binding authority, it assumes responsibility for every decision made under that authority. Licensing alone is not enough. Producers must also operate within defined classes, premium limits and geographic boundaries.
Many MGAs monitor licences carefully but fail to connect them to authority rules. A producer can be fully licensed and still out of compliance if they bind outside approved parameters.
This is where workflow design becomes critical. Compliance cannot rely on memory or manual checks. Licence status, appointment data and authority limits must be embedded directly into underwriting and quoting logic. If a system allows a policy to be bound without validating those conditions, the control has already failed.
Technology can support this, but enforcement must be intentional.
Question four: how wide is your map?
Geographic expansion is often treated as a growth lever rather than a compliance challenge. In reality, every new state introduces new timelines, appointment rules and regulatory dependencies.
Some states allow rapid appointments. Others require lengthy approvals or additional certifications. Assuming uniformity can lead to producers writing business before they are authorised to do so, creating exposure that can take months to unwind.
Effective compliance requires two views: a real-time map showing where producers are currently licensed and appointed, and a forward-looking expansion plan that accounts for regulatory lead times. Without both, growth quickly outpaces control.
Good systems can show where you are today. Knowing where you can safely operate tomorrow requires planning.
Question five: Where does truth live?
This is where many MGAs struggle most. Licences live in one system. Policies in another. Producer data in a CRM. Certificates in shared folders. When an auditor asks for proof that a producer was properly licensed and appointed at the time a policy was written, teams often scramble across platforms to reconcile information.
A compliance tool should not function as a document warehouse. It should act as the system of record for licensing, appointments and attestations, integrated with the PAS and CRM through regular, automated synchronisation.
Without that integration, compliance becomes a manual exercise. Spreadsheets replace systems. Reporting becomes reactive. And audits become stressful exercises in data reconciliation.
The rule is simple: if systems do not talk to each other, compliance is already compromised.
Read the full blog from Producerflow here.
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