Managing general agent
From Wikipedia, the free encyclopedia
In insurance, a managing general agent is defined legally as "an individual or business entity appointed by an underwriting insurer to solicit applications from agents for insurance contracts or to negotiate insurance contracts on behalf of an insurer and, if authorized to do so by an insurer, to effectuate and countersign insurance contracts". (This particular wording is from Kentucky Revised Statutes.[1] Similar wordings can be found in the statutes of Oklahoma, Idaho, Arizona, Nevada, Wyoming, Florida, and Alabama.)
In the U.S. and Canada, managing general agents act as a "fronting" system for insurers, allowing filings to be made and proofs of insurance to be given in each other's jurisdictions.[2]
Depending on the appointment, a managing general agent may perform one of many tasks normally performed by an insurer. These include but are not limited to, sub-contracting with independent agents for placement of business, negotiating commissions, handling claims, issuing policies, processing endorsements, collecting policy premiums or being responsible for completion of regulatory reports for state or federal agencies.
In Canada, managing general agencies (MGAs) play a central role in the distribution of life and health insurance. Individual life insurance agents generally cannot contract directly with insurers; instead, they must be sponsored and appointed through an MGA or a career agency before they are permitted to solicit or place insurance policies.[3] MGAs act as intermediaries between insurers and independent advisors, providing contracting, compliance oversight, product access, training, and administrative support.[4]Provincial regulators note that MGAs facilitate the appointment of agents and support the regulatory requirements for licensing and ongoing supervision.[5] Because many Canadian advisors operate independently rather than as employees of insurers, MGAs function as the primary distribution channel for life and health insurance products across the country.
