According to the Insurance Code of 1956, MCL 500.1401(b), the Managing General
Agent (MGA) is defined 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.
Per MCL 500.1403, the following individuals are not considered managing general
- 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,
- An attorney-in-fact for a reciprocal or inter-insurance exchange.