Managing General Agent (MGA)
A managing general agent (MGA) is an intermediary that an insurer authorizes to underwrite risks and often bind coverage, issue policies and handle related functions on the insurer's behalf, within limits set by a written agreement and state law.
Last updated October 13, 2026
How an MGA works
An MGA operates under a written agreement with one or more insurers, often called capacity providers because they supply the balance sheet that pays claims. The agreement sets out what the MGA may do and the limits of its authority. Depending on the arrangement, an MGA may:
- Solicit and accept applications from brokers and agents.
- Underwrite and price risks within the insurer's guidelines.
- Bind coverage and issue policies and endorsements.
- Collect and remit premium.
- Handle or coordinate claims, or use a third-party administrator.
- Report to the insurer on production and results.
The MGA is typically paid by commission and sometimes by profit-sharing tied to results. The insurer stays responsible to the policyholder for paying covered claims. This kind of arrangement is often called delegated authority or binding authority, and state law and the NAIC Managing General Agents Act (Model #225), listed in the sources below, address how insurers oversee these relationships.
How MGAs work
An MGA sits between the insurer that supplies the balance sheet and the brokers or agents that bring in business. Unlike a typical agent or broker, an MGA has delegated underwriting authority. Depending on the agreement, an MGA may quote and bind coverage, issue policies, collect premium, appoint producers, arrange reinsurance, and handle some claims functions. It is paid by commission and sometimes profit-sharing.
MGAs are common in specialty lines and excess and surplus lines, where insurers may lack in-house expertise or distribution. Retail brokers often reach these markets through a wholesale broker or directly through the MGA.
Regulation
Most states license MGAs and regulate them under laws based on the NAIC Managing General Agents Act. The model requires a written contract between the insurer and the MGA, and requires insurers to oversee MGA underwriting and claims work. Thresholds and details vary by state. In the NAIC model, the definition applies once an MGA writes premium above a share of the insurer's surplus, so smaller producers may not be classed as MGAs.
Example
A specialty MGA focuses on technology risks. An admitted insurer gives it authority to quote and bind policies up to set limits under written underwriting guidelines. A retail broker submits a client's application to the MGA. The MGA prices and binds the policy on the insurer's paper. The insurer, not the MGA, is the party that stands behind the policy and pays covered claims.
What to watch for
- Check the insurer that issues the policy, not just the MGA. Look at its financial strength and whether it is admitted or non-admitted.
- An MGA is not the same as a broker. It acts for the insurer, while a broker typically acts for the client.
- Binding authority has limits. Some risks need referral to the insurer.
- Do not confuse MGAs with managing general underwriters (MGUs), a term some markets use for a similar delegated-authority role. Usage varies by line and region, so ask what authority a given firm actually holds.
MGA vs. broker vs. wholesale broker vs. carrier
- MGA. Acts on behalf of the insurer, with authority to underwrite and often bind. It sells a specific program or underwrites a specialty class.
- Retail broker. Typically represents the buyer and shops the market on the buyer's behalf. See broker of record for how that relationship is documented.
- Wholesale broker. Sits between a retail broker and specialty markets, including MGAs and surplus lines insurers, and does not usually deal with insureds directly.
- Insurer or carrier. Issues the policy and pays covered claims. The MGA does not.
Some firms play more than one role. An MGA can also hold a surplus lines license, and a wholesaler can have binding authority on some programs. What matters is who the firm is acting for on your account, which the agreements and your broker can clarify.
Why insurers use MGAs, and what it means for buyers
Insurers use MGAs to enter specialty classes, to add underwriting expertise, to reach niche distribution, or to scale without building every function in house. For buyers, an MGA can mean faster quotes, a specialist underwriter and coverage built for a specific kind of risk. It also adds a layer to understand: the MGA sets the terms and the insurer backs them. In a hard market, MGAs and their capacity providers can change appetite or terms quickly, and an MGA that loses its capacity can leave renewal options in doubt even though policies already issued stay with the insurer.
A second example: an AI liability placement through an MGA
A hypothetical AI software company asks its broker for AI liability and technology E&O quotes. A wholesale broker brings back a quote from a specialty MGA. The quote is issued on the paper of a rated insurer, which is the capacity provider. The MGA handled underwriting, and claims will be handled by the MGA's claims team or a third-party administrator, depending on the program, with the insurer retaining responsibility for coverage decisions and payment. The broker confirms the insurer's name and rating on the quote, whether it is admitted or non-admitted in the company's state, how claims are reported, and what the policy says about changes in the MGA's relationship with the insurer.
Questions to ask your broker
- Who is the insurer on the policy, and what is its financial strength rating?
- Is the insurer admitted or non-admitted in our state?
- What authority does the MGA have, for example can it bind, issue endorsements and handle claims?
- How are claims reported and who decides coverage?
- How long has this MGA written this class, and with how many capacity providers?
- What happens to my policy and my renewal if the MGA and the insurer end their relationship?
Why it matters for technology, AI, fintech and digital-asset companies
Many emerging risks, such as cyber, AI liability and digital assets, are written through MGAs and specialty programs rather than by large standard carriers. Knowing how the MGA and its capacity provider fit together helps when comparing quotes.
Many specialty programs for AI, cyber, technology E&O and digital assets are built by MGAs because standard carriers have been slow to build products and underwriting for fast-moving risks. Others combine MGAs with Lloyd's capacity or with non-admitted paper. Because every MGA has its own appetite, forms and claims approach, it helps to compare programs on wording and on the insurer behind them, not only on price. See AI liability, cyber and technology E&O and digital assets, and ask how the MGA's underwriting fits your business.
Related terms
Frequently asked questions
What is a managing general agent (MGA)?
A managing general agent (MGA) is an intermediary that an insurer authorizes to underwrite risks and often bind coverage, issue policies and handle related functions on the insurer's behalf, within limits set by a written agreement and state law.
What is the difference between an MGA and a broker?
A broker typically represents the client and places coverage with insurers. An MGA acts on behalf of an insurer, with delegated authority to underwrite and often bind coverage. Some firms act in more than one capacity, so the role in a specific transaction should be confirmed.
Does an MGA pay claims?
Generally the insurer pays covered claims, not the MGA. Some MGAs handle claims administration under delegated authority, but the insurer that issued the policy is the party that stands behind it. That is why the insurer's financial strength and licensing status matter.
Are MGAs regulated?
Yes. Most states license MGAs and regulate their contracts with insurers, often following the NAIC Managing General Agents Act. Requirements include a written agreement and insurer oversight, and they vary by state, so specific obligations depend on where the MGA operates.
What is delegated authority in insurance?
Delegated authority is an arrangement in which an insurer gives another firm, such as an MGA or coverholder, authority to underwrite, bind coverage, issue policies or handle claims on its behalf. The scope and limits are set in a written agreement, and the insurer stays responsible for the policies written under it.
Can an MGA bind coverage?
Yes, if its agreement with the insurer gives it binding authority. Binding authority has limits, such as maximum policy limits or classes of business, and risks outside them must be referred to the insurer. A binder from an MGA is typically backed by the insurer named on it, so confirm who that insurer is.
Should I be concerned if my policy was placed through an MGA?
Not in itself. Many specialty programs are written through MGAs. What matters is the insurer on the policy, its financial strength, the policy wording, and how claims are handled. Ask your broker to confirm those items in writing so you know who stands behind the coverage.
How are MGAs paid?
Typically through commission on the premium they write, and sometimes through additional fees or a profit commission that depends on how the business performs. The exact arrangement is set in the agreement with the insurer. Buyers usually see the result as part of the premium rather than as a separate charge.
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