A type of insurance broker who acts as an intermediary between a retail broker
and an insurer, while having no contact with the insured. Wholesale agents
place business brought to them by retail agents. Unlike a retail broker,
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.