Managing General Agents

 Regulation 120 (11NYCRR33) defines the term Managing General Agent and imposes a number of requirements on both MGAs and insurers.

THE GOOD NEWS FOR EXCESS LINE BROKERS IS THAT THIS REGULATION DOES NOT APPLY TO RELATIONSHIPS WITH ELIGIBLE EXCESS LINE INSURERS, but it may apply to relationships an excess line broker has with licensed insurers. The regulation applies when a licensed insurer or licensed group, association or other organization of insurance companies that engage in joint underwriting or joint reinsurance in accordance with Insurance Law §2317(a) conducts business with any person, firm, association or corporation that:

1)    Manages all or part of the insurance business of that insurer,

2)    Acts as an insurance agent as defined in Insurance Law §2101(a) or as an insurance broker as defined in Insurance Law §2101(c),


3)    Produces directly or indirectly an amount of gross direct written premium equal to or more than 5% of the insurers reported policyholder surplus in its last annual statement and either:

a.     Adjusts or pays claims in excess of $25,000.00, or

b.     Negotiates reinsurance on behalf of the insurer.

If you meet the definition above, you must:

1)    Be appointed as an agent for the insurer and obtain an agent’s license,

2)    Have a written contract with the insurer,

3)    The written contract must contain certain terms including:

a.     The insurer can terminate a contract for cause upon written notice and suspend underwriting authority;

b.     The MGA must render detailed accounts and remit funds not less than monthly;

c.     The MGA must maintain funds in a fiduciary account;

d.     The MGA must maintain separate business records and provide the insurer and the Superintendent of Financial Services a right of access;

e.     The contract cannot be assignable in whole or in part;

f.      The agreement must have appropriate underwriting guidelines as detailed in the regulation;

g.     The contract must allow the insurer to cancel or non-renew any policy.

This regulation has substantial additional provisions which limit profit sharing calculations, require actuarially set reserves, prohibit certain conduct by the MGA and mandate certain conduct of the insurer.


This is not intended to be nor should it be construed as legal advice. Consult with your own legal counsel.
Last Reviewed/Revised: October 13, 2020