Eligible brokers: We accept business from political risk insurance brokers of all nationalities who have been formally approved by MIGA (please see below). Brokers wishing to be eligible to introduce business to MIGA and to receive commission payments must be identified as the broker of record on the Definitive Application for political risk insurance, and must not be affiliated with the investor.
Acceptance process: In order to become eligible to introduce political risk insurance business on behalf of a client, a broker applies with MIGA's Syndication Office. We examine the broker's licenses, financial statements, professional indemnity insurance policy, and the company's business profile. Additionally, we review information on key staff, detailing their relevant experience and, where possible, consult with other insurers to learn about the broker's reputation within the industry. After completion of due diligence, we also examine our own business needs in evaluating any broker, then decide at our sole discretion whether we will accept business from the broker. If we confirm the broker's acceptance, we add the broker's name to our list of eligible brokers. A broker may be removed from the list at any time at MIGA's sole discretion.
It should be noted that a broker may not make any representations in oral or written communications to clients, or to the public, that such broker represents MIGA, is an agent of MIGA, is an independent contractor to MIGA, or that such broker is "a MIGA broker", or any similar representations or wordings. However, brokers may state that they are eligible to introduce business to MIGA. Any action violating this requirement will result in any such broker's immediate removal from MIGA's list of brokers, and may also result in legal action against the broker.
Commission: MIGA's commission rates as of March 1, 2008, are:
- Years 1-3: 20%
- Years 4-7: 15%
- Years 8-10: 10%
The maximum amount of commission payable in any one year is capped at $250,000 (or equivalent) per project. The maximum period for payment of commission is the shorter of the term of the Contract of Guarantee and 10 years. MIGA pays commission on the gross premium of the Contract of Guarantee issued, including amounts ceded under facultative reinsurance or the Cooperative Underwriting Program. The above commission rates apply to all Definitive Applications received by MIGA on or after March 1, 2008. MIGA retains the right to amend these commission rates at its discretion at any time. Any such change in the commission rates will only apply to Definitive Applications received by MIGA on or after the date the new commission rates come into effect. Commissions with respect to existing Definitive Applications, or Contracts of Guarantee, will continue to be eligible to be paid at the rate in effect on the date the relevant Definitive Application was received by MIGA.
Brokers are eligible for commission if identified as the broker of record on or before the submission date of the Definitive Application, provided they are not affiliated with the applicant. The applicant needs to notify MIGA of changes in the broker-of-record, both before and after a Contract of Guarantee is issued. If a broker is replaced or dismissed by a guarantee holder, then MIGA will stop paying commission to that broker, effective from the commencement of the next contract period immediately following such replacement or dismissal.
Billing procedure: Premium is charged directly to the guarantee holder at the beginning of the first contract period, and at the beginning of each subsequent contract period thereafter, typically on an annual or semi-annual basis. The guarantee holder must pay the gross premium directly to MIGA. MIGA will pay commission to the broker within 30 days following payment of the premium.
For more information, please contact:
1818 H Street, NW
Washington, DC 20433, USA