Managing general agent

A managing general agent (MGA) is an insurance agency that does much of an insurer's job under contract. The insurer gives the MGA authority to underwrite risks, set or administer rates, issue policies and, in many cases, appoint other agents and settle claims. The insurance company's name is on the policy and it remains legally responsible for paying claims, but drivers may deal only with the MGA's brand.

MGAs are common in nonstandard auto insurance and other niche markets, and many insurtech brands start as MGAs before getting their own licenses. A typical arrangement: an MGA designs an auto program, sells it through independent agents and handles service, while a licensed insurer issues the policies and keeps or reinsures the risk in exchange for a fee. When the issuing insurer passes nearly all the risk to reinsurers, it is acting as a fronting carrier. In Texas, many national carriers write auto policies through an MGA paired with a county mutual insurance company.

For a driver, the main point is knowing which company actually insures you. Check the policy or declarations page for the insurer's legal name; that company's financial strength rating and state license matter if something goes wrong. States license and regulate MGAs, and most follow an NAIC model law. See texas county mutuals and fronting carriers: who really insures you.