POSITION DESCRIPTIONS

 

Managing General Agent (MGA) — A specialized type of insurance agent/broker that, unlike traditional agents/brokers, is vested with underwriting authority (Pen) from an insurer. Accordingly, MGAs perform certain functions ordinarily handled only by insurers, such as binding coverage, underwriting and pricing, appointing retail agents within a particular area, and settling claims.

Typically, MGAs are involved with unusual lines of coverage, such as professional liability and surplus lines of insurance, in which specialized expertise is required to underwrite the policies. However, MGAs also write some personal lines business, especially in geographically isolated areas (e.g., western Oklahoma, North Dakota) where insurers do not want to set up a branch office.


MGAs benefit insurers because the expertise they possess is not always available within the insurer's home or regional offices and would be more expensive to develop on an in-house basis.

 

Managing General Underwriter (MGU) — Used in life and health companies instead of managing general agent (MGA). The terms have been used interchangeably, and there is little real distinction.

 

General Agent (GA) — In insurance, a managing general agent is defined legally as "an individual or business entity appointed by an insurer to solicit applications from agents for insurance contracts or to negotiate insurance contracts on behalf of an insurer and, if authorized to do so by an insurer, to effectuate and countersign insurance contracts".

 

Third-Party Administrator (TPA) — An organization that processes insurance claims or certain aspects of Commercial and Employee Benefit plans for a separate entity. It is also a term used to define organizations within the insurance industry which administer other services such as underwriting, customer service. This can be viewed as outsourcing the administration of the claims processing, since the TPA is performing a task traditionally handled by the company providing the insurance or the company itself. Often, in the case of insurance claims, a TPA handles the claims processing for an employer that self-insures its employees. Thus, the employer is acting as an insurance company and underwrites the risk. The risk of loss remains with the employer, and not with the TPA. An insurance company may also use a TPA to manage its claims processing, provider networks, utilization review, or membership functions. While some third-party administrators may operate as units of insurance companies, they are often independent.