Lessons from a Retired State Regulator: Compliance Insights for Agents, MGAs, and Carriers

This article shares key lessons from a recently retired state regulator with decades of experience overseeing insurance compliance. Her insights uncover the most common mistakes made by agents, MGAs, and carriers and how they can be avoided. She also highlights emerging regulatory trends, audit preparation strategies, and the growing impact of automation. Each takeaway is practical, experience-driven, and directly applicable to daily operations. Together, these lessons provide a clear path to staying compliant, efficient, and future-ready in 2026.

1. Common Compliance Mistakes

Question: Looking back on your time as a regulator, what were the most common compliance mistakes you saw from agents, agencies, MGAs, or carriers – and what simple practices would have prevented them?

Answer: “The most common mistakes by agents include neglecting state regulations, operating without the proper license, delayed license renewal and continuing education credits, overlooking essential forms, and maintaining imprecise financial records.

For MGAs, ignoring regulations and contractual obligations, operating without the right licenses, mismanaging underwriting or claims, and neglecting accurate recordkeeping were frequent issues. Insurance companies often ignored state rules, failed to perform audits of their TPAs and MGAs, missed agent appointments, and omitted required disclosures.”

Key Quote: “Investing in a robust risk management system and conducting regular internal audits is non-negotiable for maintaining compliance and safeguarding the company’s integrity.”

2. Regulatory Trends for the Next 3–5 Years

Question: What trends or regulatory shifts should the industry be preparing for, especially regarding licensing appointments and reporting requirements?

Answer: “Regulatory frameworks may require compliance with transformative mandates like the Digital Operational Resilience Act (DORA) and ESG disclosures. Customer expectations are evolving, requiring insurers to offer more personalized products and rethink risk management approaches. Technological integration, including AI and automation, will revolutionize underwriting and claims processes. Climate change also demands significant investment in catastrophe modeling and risk assessment.”

Key Quote: “Insurers must prioritize digital transformation and leverage data analytics to stay ahead in this rapidly changing landscape.”

3. Audit Preparation

Question: During audits or state reviews, what documentation gaps or workflow weaknesses most often cause delays or penalties – and how can organizations better prepare now?

Answer: “Incomplete or missing documentation, inadequate internal controls, reliance on manual processes, and ignoring state rules frequently cause delays or penalties. To prepare, companies should focus on automation and ensure they stay current with state requirements.”

Key Quote: “Automation, when paired with attention to regulatory detail, can dramatically reduce audit risk and ensure timely compliance.”

4. Traits of Compliant Organizations

Question: From your perspective, what traits or behaviors distinguished organizations that consistently stayed compliant from those that struggled?

Answer: “The key lies in their commitment to integrity and excellence. Organizations that pride themselves on ethical practices proactively update compliance policies to reflect legal requirements. They invest in comprehensive risk management systems and conduct routine internal audits, fortifying their integrity and reputation.”

Key Quote: “Those that consistently succeed in compliance do more than follow regulations—they embed excellence and integrity into their operations.”

5. Advice for Teams Embracing Automation

Question: If you could give one piece of advice to compliance teams embracing automation or digital tools for the first time, what would you tell them?

Answer: “I recommend embracing automation while also taking the time to understand it fully. Teams must ensure that automated processes are aligned with current regulations and internal policies to maintain accuracy and efficiency.”

Key Quote: “Understanding your automation tools is as important as using them—accuracy and compliance go hand in hand.”

Summary

The insights from a seasoned state regulator provide a clear roadmap for agents, MGAs, and carriers navigating today’s complex compliance environment. From avoiding common pitfalls to preparing for audits and adopting automation thoughtfully, her advice reinforces the importance of integrity, proactive policies, and ongoing professional development. Staying informed, investing in systems, and fostering ethical practices will keep organizations compliant and competitive for years to come.