Glossary · Insurance agency commissions
Managing general agent (MGA)
A managing general agent (MGA) is a firm that underwrites, prices, binds and administers coverage in a niche under authority granted by a carrier.
What it means
JoAnne Artesani, writing in IA Magazine on partnering with MGAs on new insurance programs, describes an MGA as “a licensed insurance entity that operates within underwriting authority granted by a carrier to design, underwrite, price, bind and administer coverage within a specific niche or segments of business.” The carrier usually carries the risk, and the MGA runs the program. Some firms call themselves managing general underwriters instead, and practices vary from firm to firm.
The same article sets an MGA apart from a wholesaler: the wholesaler places individual accounts with carrier underwriters, while the MGA holds the carrier’s authority to transact business on its behalf. An insurance aggregator is different again: it gives member agencies access to carriers and pools their volume. A Big “I” Virtual University article on the surplus lines market notes that most agencies place surplus lines business through wholesale brokerages, so one account may pass through a wholesaler and an MGA before it reaches the carrier.
How it shows on a commission statement
Business placed through an MGA or a wholesale broker may be paid by that firm rather than the carrier, on its own statement, and sometimes on an account current that nets your commission against the premium you owe. The firm may add fees of its own, which may not be commissionable. Matching needs to know who pays each policy: a policy you expect on a carrier’s statement may sit on an intermediary’s, and the reverse.
Example
- Gross premium, invented MGA program
- $6,400.00
- MGA policy fee, not commissionable in this example
- $250.00
- Your commission at 12%, on premium only
- −$768.00
- Net due to the MGA (premium plus fee, less commission)
- $5,882.00
Common mistakes to check
- Looking for an MGA-placed policy on the carrier’s statement, and calling it missing when the MGA pays it.
- Commission calculated on MGA fees that your agreement treats as non-commissionable. See policy fee.
- Recording only the carrier in your AMS, and not the MGA or wholesaler that bills and pays, so the statement has nothing to match.
- Treating the MGA’s rate as the carrier’s schedule. The MGA may set its own commission terms with you.
Sources
- IA Magazine, What Agents Should Look For When Partnering With MGAs on New Insurance Programs, by JoAnne Artesani, June 1, 2026. Retrieved October 7, 2026.
- Big “I” Virtual University, What Is the Surplus Lines Market?, by Nancy Germond, 2024, last updated September 18, 2026. Retrieved October 7, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in development. Related: agency bill reconciliation: checking the account current.