managing general agent (MGA)

A managing general agent (MGA) is a specialized type of insurance agent/broker that, unlike traditional agents/brokers, is vested with underwriting authority from an insurer. An MGA is authorized by an insurer to transact insurance business and may have authority to bind the insurer, issue policies, appoint producers, arrange for reinsurance, and provide other administrative support, depending on the specifics of the MGA agreement.

MGAs usually require special licensing and have to meet other requirements specified by various state insurance departments. MGAs have to comply with the MGA Model Act developed by the National Association of Insurance Commissioners.

An MGA is not to be confused with a managing general underwriter (MGU), who is essentially an MGA involved in the life and health insurance business as opposed to property and casualty.

Typically, MGAs are involved with unusual lines of coverage, such as professional liability and surplus lines of insurance, in which specialized expertise is required to underwrite the policies. However, MGAs also write some personal lines business, especially in geographically isolated areas (e.g., western Oklahoma, North Dakota) where insurers do not want to set up a branch office. MGAs benefit insurers because the expertise they possess is not always available within the insurer's home or regional offices and would be more expensive to develop on an in-house basis.