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wholesale broker

A wholesale broker is a type of insurance broker who acts as an intermediary between a retail broker and an insurer but has no contact with the insured. Wholesale agents place business brought to them by retail agents.

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Wholesale brokers have direct contact with the insurer, whereas the retail agent who produced the business does not. The same broker can function as a retailer or wholesaler, depending on the specific situation. Wholesale brokers often possess specialized expertise in a particular line of coverage or in a line of coverage that is unusual and/or have greater access to or influence with certain insurance markets, which is especially valuable when dealing with a difficult-to-place risk. There are two types of wholesale brokers: managing general agents and surplus lines brokers. The latter work with the retail agent and the insurer to obtain coverage for the insured; but unlike a managing general agent, a surplus lines broker does not have binding authority from the insurer.

Related Terms

A managing general agent (MGA) is a specialized type of insurance agent/broker that, unlike...

A retail agent is an insurance agent who acts as an intermediary between an insured and the...

The wholesale agent serves as an intermediary between the retail agent and the insurer.

A surplus lines broker is a broker who is licensed to place coverage with nonadmitted insurers...