What Is a Managing General Insurance Agent?

Insurance companies hire managing general agents (or MGAs) to act on their behalf in particular states or territories. They get selected on the basis of reliability, stability and experience. Once appointed, MGAs have authority to make various administrative decisions in an effort to maximize profits for the insurer.

MGAs Appoint Other Agents

Managing general agents are entrusted with the duty of selecting additional insurance agents to sell products for the insurer. They decide whether agents who apply to represent the insurer will be profitable appointees.

MGAs Terminate Agents' Contracts

MGAs must cancel the contracts of agents in their territory who underperform. This can include administrative cancellations for bad-faith practices.

Acting Underwriters

MGAs regularly review applications for coverage that have been submitted by agents in their territory. They decide whether the risk is insurable and may issue the policy on behalf of the insurer.

MGAs Sell Insurance

Managing general agents sell products and service policies for the insurance companies they represent. They receive commission for this in addition to any compensation they may receive as an MGA.

MGAs Are Subject Matter Experts

Insurance companies rely on MGAs to act as experts concerning uncommon lines of insurance such as surplus lines. They may assist adjusters or legal teams with the interpretation of unclear underwriting guidelines.

References

• Alabama Department of Insurance: MGA Requirements
• Delaware Insurance Code: MGA Act
• IRMI: Managing General Agent