As soon as last month’s The Insurance Journal hit the streets, calls from brokers and insurance companies started pouring in at AFG Canada regarding its new fee-based managing general agency (MGA) model.

However, Dino Vecile, president and COO at AFG, says the people calling have misunderstood how the model works, and more importantly, whom it's for.

The model, outlined in the article "Two MGAs spearhead fee-based business models," stated that AFG is targeting high producing brokers, small MGAs, associate general agents and other producer groups to build a Re/Max-like strategy for the insurance industry.

This description gave the wrong impression to the industry, explains Mr. Vecile. "This model is not for the individual broker, and it was never intended for the individual broker. It's for producer groups such as property and casualty, MFDA and IDA consolidators looking to build life insurance distribution without the infrastructure overhead associated with this type of distribution. It is also intended for MGA's looking to improve revenue margins."

He says that perhaps the Re/Max analogy led to some confusion. "When Re/Max came to Canada, it targeted the broker owners. This would be the MGAs in our case. A better description of our model is that we are looking to become a full-service third party administrator."