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📋 '''Managing general agent agreement''' is the contractual instrument through which an [[Definition:Insurance carrier | insurance carrier]] formally delegates [[Definition:Underwriting authority | underwriting authority]] to a [[Definition:Managing general agent (MGA) | managing general agent]], defining the scope, limits, and conditions under which the MGA may bind coverage, handle [[Definition:Claims | claims]], and manage [[Definition:Policy | policies]] on the carrier's behalf. Often referred to simply as an MGA agreement, this document sits at the heart of [[Definition:Delegated underwriting authority (DUA) | delegated authority]] relationships and functions as both a commercial partnership agreement and a governance framework. It is distinct from a standard [[Definition:Agency agreement | agency agreement]] because of the breadth of authority granted — MGAs typically exercise far more operational autonomy than traditional [[Definition:Insurance agent | agents]] or [[Definition:Insurance broker | brokers]], including the power to set pricing, issue policies, and sometimes adjudicate claims within defined parameters.

⚙️ The agreement typically specifies the classes of [[Definition:Insurance | insurance]] the MGA is authorized to write, geographic territories, per-risk and aggregate [[Definition:Binding authority agreement | binding authority]] limits, [[Definition:Commission | commission]] structures, [[Definition:Reinsurance | reinsurance]] obligations, and the [[Definition:Management information | management information]] the MGA must provide to the carrier. In the [[Definition:Lloyd's of London | Lloyd's]] market, the equivalent relationship is governed by a [[Definition:Binding authority agreement | binding authority agreement]] between a [[Definition:Coverholder | coverholder]] and the lead [[Definition:Syndicate | syndicate]], subject to Lloyd's minimum standards. In the United States, state insurance regulators often impose specific licensing requirements on MGAs and may require that MGA agreements contain mandatory provisions — such as minimum audit rights for the carrier and restrictions on the MGA's ability to appoint sub-agents — under laws modeled on the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] Managing General Agents Act. European and Asian jurisdictions have analogous requirements rooted in their own [[Definition:Insurance regulation | regulatory frameworks]], though the precise terminology and registration processes vary.

🔍 Getting the MGA agreement right is foundational to the entire delegated authority model. A poorly drafted agreement exposes the carrier to uncontrolled [[Definition:Underwriting risk | underwriting risk]], regulatory sanctions, and potential disputes over authority and [[Definition:Premium | premium]] handling. Conversely, an overly restrictive agreement can hamstring the MGA's ability to respond to market opportunities, undermining the commercial rationale for the delegation in the first place. As the MGA model has expanded rapidly across global markets — driven by carrier appetite for distribution scale and [[Definition:Insurtech | insurtech]] innovation — the sophistication of these agreements has grown in tandem, increasingly incorporating data-sharing standards, technology integration requirements, and performance triggers that can automatically adjust the MGA's authority based on [[Definition:Loss ratio (L/R) | loss ratio]] outcomes.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Managing general agent (MGA)]]
* [[Definition:Binding authority agreement]]
* [[Definition:Delegated underwriting authority (DUA)]]
* [[Definition:Coverholder]]
* [[Definition:Underwriting authority]]
* [[Definition:Agency agreement]]
{{Div col end}}

Definition:Managing general agent agreement - Revision history

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