What authority is granted to a Managing General Agent (MGA) in surplus lines insurance?

A Managing General Agent (MGA) in surplus lines insurance operates with a certain amount of delegated authority from the surplus lines insurer, which commonly includes binding authority. This means that an MGA can enter into contracts and bind coverage on behalf of the insurer without needing prior approval for each individual policy or endorsement. This authority enables the MGA to act on behalf of the insurer in managing risk and underwriting decisions effectively, thereby facilitating quicker and more efficient transactions in the surplus lines market.

While MGAs can indeed manage other aspects of insurance, such as underwriting and managing certain administrative functions, their role is characterized primarily by the binding authority granted by the insurer. This aspect distinguishes them from other types of insurance agents or brokers who may not have the level of authority to bind coverage directly.