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Managing General Agent Agreement

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MANAGING GENERAL AGENT AGREEMENT

This Managing General Agent Agreement ("Agreement") is entered into as of the Effective Date: by and between Insurer: having its principal address at and Managing General Agent: having its principal address at .

RECITALS

WHEREAS, Insurer is authorized to write insurance in the jurisdictions specified in this Agreement and desires to appoint a Managing General Agent to underwrite, bind, place, and administer specified lines of business on Insurer's behalf under the terms set forth herein;

WHEREAS, MGA represents that it has the licensing, expertise, personnel and financial capacity to perform underwriting, policy issuance, premium collection, reporting and other functions described in this Agreement;

WHEREAS, the parties desire to set forth their respective rights, duties and obligations with respect to the authority granted to MGA and the compensation payable to MGA for services rendered.

NOW THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. "Policies" means insurance policies or binders issued by Insurer or on Insurer's behalf. "Territory" means the jurisdictions listed in the Territory field below. "Premiums" means gross premiums, policy fees and any other amounts payable by policyholders for insurance placed under this Agreement.

2. APPOINTMENT; SCOPE OF AUTHORITY

2.1 Appointment. Insurer hereby appoints MGA as its non-exclusive managing general agent to solicit business, underwrite risks, bind coverage, issue and deliver Policies, and administer business specified in this Agreement only to the extent and subject to the limits and conditions herein.

2.2 Authority. MGA shall have the authority, subject to Insurer's underwriting guidelines and the limitations set forth in this Section, to: (a) bind coverage and issue temporary binders and Policies; (b) collect and receive Premiums and policy fees; (c) settle first-party claims up to the limit set forth in subsection 2.3; and (d) appoint sub-producers where pre-approved by Insurer in writing.

3. MGA DUTIES AND SERVICES

3.1 Underwriting and Placement. MGA shall underwrite and bind risks only in accordance with Insurer's written underwriting guidelines, rating plans and binding authority. MGA shall obtain any required prior approval from Insurer for risks outside established authority.

3.2 Policy Forms and Endorsements. MGA shall use only policy forms and endorsements approved in writing by Insurer. Any deviation or new form must receive prior written approval from Insurer.

3.3 Premium Collection and Trust Account. MGA shall collect Premiums and shall hold all collected Premiums in a fiduciary trust account separate from MGA's operating funds. MGA shall maintain records and bank statements and shall remit Premiums to Insurer in accordance with the remittance schedule set forth below.

4. COMPENSATION; COMMISSIONS

4.1 Commission. Insurer shall pay MGA commissions on net written Premiums in accordance with the commission schedule below. Commissions shall be earned when Premiums are received and deemed collectible under Insurer's accounting policies.

4.2 Adjustment and Recovery. If Premiums are refunded, uncollectible, or otherwise reduced, Insurer shall have the right to recover commissions previously paid to MGA on such amounts by setoff against future commissions or by direct payment demand.

5. RECORDS, AUDIT AND REPORTING

5.1 Records. MGA shall maintain complete and accurate records of all business placed under this Agreement, including applications, underwriting files, policy documents, premium receipts, trust account records and claim files, in accordance with generally accepted accounting practices and any regulatory requirements.

5.2 Audit Rights. Insurer shall have the right to audit MGA's records and procedures relating to this Agreement upon reasonable notice and during normal business hours. MGA shall fully cooperate with audits and shall promptly provide requested documentation.

6. REPRESENTATIONS, WARRANTIES AND LICENSES

6.1 MGA represents and warrants that it is duly organized, in good standing, has all licenses and authorizations required to perform the services under this Agreement, and will comply with all applicable laws, regulations and Insurer's lawful instructions.

6.2 Insurer represents and warrants that it is authorized to enter into this Agreement and that it shall honor Policies and claims arising from MGA's bindings made in accordance with this Agreement and Insurer's guidelines.

7. INDEMNIFICATION AND INSURANCE

7.1 Indemnification. Each party shall indemnify, defend and hold harmless the other party and its officers, directors, employees and agents from and against any and all losses, liabilities, damages, claims, obligations, costs and expenses (including reasonable attorneys' fees) arising out of the indemnifying party's breach of this Agreement, negligence, willful misconduct or violation of law.

8. LIMITATION OF LIABILITY

Except for liability arising from fraud, willful misconduct, or gross negligence, neither party shall be liable to the other for consequential, incidental, punitive or special damages. Each party's aggregate liability under this Agreement shall be limited to the greater of (a) the total commissions paid to MGA in the preceding twelve (12) months, or (b) the amount of insurance recoveries actually received related to the claim.

9. TERM; TERMINATION; TRANSITION

9.1 Term. This Agreement shall commence on the Effective Date and shall continue for a term of unless earlier terminated in accordance with this Agreement.

9.2 Termination for Cause. Either party may terminate this Agreement for material breach by the other party if such breach is not cured within days after receipt of written notice specifying the breach.

9.3 Transition. Upon termination, MGA shall immediately cease binding new business and shall cooperate in good faith to transition Policies, records and Premiums to Insurer or its designee, including providing complete bookkeeping and claims files within days of termination.

10. CONFIDENTIALITY

Each party shall maintain in confidence all non-public business, technical and financial information and shall not disclose such information except to employees, affiliates or contractors who have a need to know and are bound by confidentiality obligations no less protective than this Section. The confidentiality obligations shall survive termination of this Agreement for a period of five (5) years.

11. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the parties at their respective addresses set forth below or to such other address as a party may designate by notice to the other.

12. AMENDMENTS; WAIVER; COUNTERPARTS

12.1 Amendments. No amendment or modification of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties.

12.2 Waiver. The failure of either party to enforce any provision of this Agreement shall not constitute a waiver of future enforcement of that or any other provision.

12.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered electronically or by facsimile shall be deemed binding for all purposes.

13. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified below without regard to choice of law principles.

13.2 Entire Agreement. This Agreement, including exhibits and schedules referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

13.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and the parties shall attempt in good faith to replace the invalid provision with a valid provision that comes closest to the parties' original intent.

14. MISCELLANEOUS

14.1 Assignment. Neither party shall assign this Agreement or any rights hereunder without the prior written consent of the other party, except that Insurer may assign to an affiliate or successor in interest without MGA's consent provided such assignee assumes Insurer's obligations.

14.2 Relationship of Parties. The parties are independent contractors. Nothing in this Agreement shall be construed to create a partnership, joint venture, agency (other than MGA's limited delegated authority), or employment relationship between the parties.

14.3 Remedies. Remedies under this Agreement are cumulative and are in addition to any remedies available at law or in equity. Pursuit of one remedy shall not be deemed an election of remedies or a waiver of any other available remedy.

INSURER - Print Name:

By:

Date:

MGA - Print Name:

By:

Date:

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What a Managing General Agent Agreement Is

Managing General Agent Agreement defines the contractual relationship between an insurer or program administrator and a managing general agent (MGA) appointed to underwrite, bind, or administer insurance policies on the insurer's behalf. The agreement sets scope of authority, underwriting limitations, commission arrangements, reporting requirements, compliance obligations, and termination rights. It allocates risk, describes data sharing and recordkeeping responsibilities, and specifies governing law and dispute resolution. Parties use the document to establish operational controls, regulatory compliance processes, and service-level expectations when delegating insurance functions to a third-party MGA.

Why this Agreement Matters for Risk and Compliance

Use a Managing General Agent Agreement to define delegated authority, limit liability, and document compensation. It creates clear underwriting standards, audit rights, and compliance requirements that help insurers meet regulatory obligations and reduce operational disputes with third-party administrators.

Why this Agreement Matters for Risk and Compliance

Who Typically Drafts and Signs This Agreement

Insurers, managing general agents, wholesale brokers, corporate compliance teams, and legal counsel commonly draft or review these agreements.

  • Insurers: set underwriting parameters, approve delegations, and maintain regulatory oversight.
  • Managing General Agents: perform underwriting, issue policies, collect premiums, and manage claims within contract limits.
  • Brokers and program administrators: negotiate terms, supply distribution channels, and report performance metrics.

Confirm roles early to prevent authority disputes and ensure documents match operational reality and regulatory reporting obligations.

Core Clauses to Include in an MGA Agreement

Core clauses in a Managing General Agent Agreement allocate authority, describe financial terms, set compliance obligations, and define operational reporting and termination procedures.

Authority

Defines specific underwriting and binding limits, delegated endorsements, sub-delegation rules, and approval thresholds. Specifies when insurer consent is required for coverage exceptions or policy form changes.

Compensation

Describes commission schedules, profit-sharing arrangements, remittance timing, adjustments for cancellations, and audit rights to verify computation of commissions and recoveries, including periods subject to clawback and setoff.

Underwriting

Sets underwriting authorities, risk acceptance guidelines, delegated classes, pricing floors, prohibited risks, and required referral processes for non-standard or high-severity exposures and defines documentation and evidence standards required for policy files and risk selection.

Compliance

Requires adherence to applicable state insurance laws, anti-money laundering procedures, privacy protections, and cooperation with regulatory exams; specifies reporting cadence and corrective action processes, including remedial timelines and notification requirements.

Reporting

Outlines premium accounting, claims reporting, reserve reporting, reconciliation schedules, audit access, and data formats for electronic feeds or regulatory filings, including delivery methods, encryption requirements, and timelines for periodic and exception reporting.

Termination

Specifies termination for cause and convenience, notice periods, transition assistance, record transfer, outstanding premium reconciliation, and post-termination audit rights and treatment of ongoing claims, unearned premiums, and indemnity obligations to ensure orderly wind-down.

Step-by-Step: Completing the Agreement

Complete the Managing General Agent Agreement in sequence: identify parties, set authority limits, fill financial terms, and confirm compliance clauses before signing.

  • 01
    Step 1: Identify parties, legal names, and entity types.
  • 02
    Step 2: Specify delegated authorities and underwriting limits clearly.
  • 03
    Step 3: Document commissions, remittance schedules, and audits.
  • 04
    Step 4: Signatories execute dated signatures and retain originals.

How to Configure an Online Workflow for the Agreement

Configure online templates to enforce required fields, set conditional logic, and automate routing for signatures and compliance verification.

Field Configuration
Effective Date Use MM/DD/YYYY format; make field required
Party Names Autocomplete entities from address book; validate legal name
Authority Limits Numeric limits with conditional approvals above threshold
Commission Table Upload schedule template; allow CSV import for bulk rates
Signature Settings Set signer roles, authentication methods, and timestamp requirements

Technical Considerations for Digital Execution

Select an eSignature platform that supports conditional fields, audit logs, and the integrations you need for underwriting and accounting systems.

  • Integrations: Salesforce, NetSuite, Microsoft 365 integrations
  • File Formats: PDF, DOCX, HTML, Excel supported
  • Authentication: Email link, SMS code, KBA, SSO options

Where to Send and How Routing Works

Routing a completed agreement requires designated recipient lists, required attachments, and compliance verification steps before delivery to insurers or regulatory files.

  • To Insurer: Send executed original to insurer compliance or contracts department.
  • Regulatory Filing: Retain copies; submit only if state requires filing.
  • Program Administrator: Provide MGAs with countersigned copies and onboarding checklist.
  • Agent Records: Keep electronic and paper records per retention policy.

Security and Compliance Features to Verify

Encryption: TLS 1.2/1.3; AES-256 at rest
Certifications: SOC 2 Type II; ISO 27001
HIPAA: BAA available for covered entities
Audit Trail: Full timestamped audit log retained
Authentication: Multi-factor and advanced signer options
Data Residency: EU-U.S. Data Privacy Framework supported

Penalties and Risks of an Incorrect Agreement

Regulatory fines: State insurance penalties and enforcement
Contract disputes: Unclear authority may trigger litigation
Commission clawbacks: Incorrect calculations can cause recovery actions
Coverage gaps: Unauthorized bindings can leave policies void
Privacy breaches: Improper PHI handling risks HIPAA sanctions
Invalid delegation: Lack of approval may render actions unenforceable

Common Mistakes to Avoid

  • Using informal or abbreviated legal names that do not match regulator records, triggering enforcement or payment issues during audits.
  • Leaving authority limits vague or missing escalation rules, which can enable unauthorized binders and create coverage disputes.
  • Failing to specify data formats and delivery methods for premium and claims reporting, causing reconciliation errors and regulatory findings.
  • Skipping explicit audit and access rights for commissions and reserves, which complicates post-termination reviews and recovery of overpayments.

Examples and Customer Perspectives on Document Efficiency

Real customers describe how a reliable eSignature platform reduces turnaround and simplifies compliance for high-volume agreements.

Optica Ventures — Brian Fitzgibbons

Optica Ventures streamlined external contract flows and made signing easier for clients and staff across devices.

  • The interface is simple and easy-to-use for our team
  • Using an eSignature workflow for insurance delegations reduces turnaround time and ensures counterparties have consistent contract versions, while preserving an auditable trail for regulatory review and simplifying premium accounting and audit readiness across distributed underwriting platforms.

Martin Properties — Tim Martin

Martin Properties processes complex agreements remotely across mobile and offline workflows to maintain speed and compliance.

  • I can process and execute all of these documents online
  • Remote signing enables agents to close program launches and binder authority quickly without in-person signings, while preserving legal evidence and meeting state filing requirements when necessary and reducing lag time between underwriting approval and policy issuance.

Key Milestones from Negotiation to Audit

Key milestones from negotiation to post-termination include drafting, approvals, execution, onboarding, and audits; assign owners and target dates for each.

01

Drafting and Negotiation

Finalize scope, authority caps, compensation terms, and legal review.

02

Approvals and Sign-off

Obtain internal approvals, board or underwriting sign-off, and countersignatures.

03

Execution and Authentication

Collect signatures, notarizations if required, and capture audit evidence.

04

Onboarding and Compliance

Transfer policy files, set reporting feeds, and schedule initial audits.

Comparing eSignature Vendors for Managing General Agent Agreements

Compare common eSignature vendor plans and features to evaluate compliance and cost for executing Managing General Agent Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes Varies
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

FAQs and Troubleshooting for Managing General Agent Agreements

[INTRO] Common questions about validity, signatures, notarization, and e-signature workflows for Managing General Agent Agreements are answered below.


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