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Managing General Agent/Agency
Section 500.1401(b) of the Michigan Insurance Code, MCL 500.1401(b), defines the Managing General Agent (MGA) as a person (individual or corporation) who:
- Negotiates and binds ceding reinsurance contracts on behalf of an insurer or manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office.
- Acts as an agent for such insurer whether known as a managing general agent or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium of not less than 5% of the policyholder surplus as reported in the last annual statement of the insurer in any 1 quarter or year and adjusts or pays claims in excess of an amount determined by the commissioner or negotiates reinsurance on behalf of the insurer.
NOTE: As of January 20, 2000, the Commissioner has not set an amount.
Section 500.1403 of the Michigan Insurance Code, MCL 500.1403 , indicates the following individuals are not considered Managing General Agents:
- An employee of the insurer.
- A United States manager of the United States branch of an alien insurer.
- an underwriting manager who pursuant to contract manages all the insurer's insurance operations, is under common control with the insurer, is subject to chapter 13, and whose compensation is not based on the volume of premiums, written, or
- An attorney-in-fact for a reciprocal or inter-insurance exchange.
An individual producer, an agency, or both, may be an MGA.
An individual producer must be appointed by the company in order to be the signer, even if the agency is also an MGA. The individual must be licensed as a producer. To appoint the individual:
- Submit an FIS 0242 Managing General AGENT or AGENCY Appointment / Cancellation form. The individual must also be appointed by the company (insurer) as a producer. The producer appointment must be submitted electronically prior to submitting the MGA appointment.
- If the agency is also appointed by the company as an MGA, this individual must be affiliated with the agency. To affiliate the individual with the agency, use the DIFS Insurance Licensing Online Services (ILOS) web page.
If the agency is an MGA, it must be licensed as a producer. To appoint an agency as an MGA:
- Submit an FIS 0242 Managing General AGENT or AGENCY Appointment / Cancellation form. The agency must be appointed by the company for the same qualification as the individual producer. The agency appointment must be submitted electronically prior to submitting the MGA appointment.
- Submit the company / MGA agreement or contract.
NOTE: More than one company may appoint the same producer and/or agency to be their MGA.
Appointment Cancellation Procedure
To cancel the appointment of an individual producer or agency, submit an FIS 0242 Managing General AGENT or AGENCY Appointment / Cancellation form.