Managing General Agent
A Managing General Agent is a person who negotiates and binds ceding reinsurance contracts on behalf of an insurer or acts as an agent for the insurer either separately or with affiliates to:
Produce and underwrite an amount of gross direct written premiums equal to or more than 5 percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year;
Adjusts or pays claims in excess of an amount determined by the Commissioner or negotiates reinsurance on behalf of the insurer;
A Managing General Agent includes a person with authority to appoint and terminate the appointment of an agent for an insurer.
This license type is available for both individuals and business entities/firms.
The following are not Managing General Agents:
An employee of the insurer;
A manager of the United States branch of an alien insurer;
An attorney authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange; and
An underwriting manager who, pursuant to a contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, is subject to the provisions of chapter 692C of NRS and whose compensation is not based on the volume of premiums written or the profit of the business written.
License Required
A person shall not act as a Managing General Agent in this state without being licensed as such.
License Term
A license as a Managing General Agent is valid for three years from the date of issuance.
Fees
All fees paid to the Nevada Division of Insurance are nonrefundable.
Initial Application total: $185
This fee consists of the $60 Administration and Enforcement fee and the $125 licensing fee.
Triennial Renewal total: $185
This fee consists of the $60 Administration and Enforcement fee and the $125 licensing fee.
Affiliation fee: $50
Payments may be made by check, money order, or Electronic Funds Transfer (EFT). Please make checks and money orders payable to the Nevada Division of Insurance. Please contact the Accounting Section at ifn@doi.nv.gov to request the required EFT form.
How to Apply
An individual applying for a license as a Managing General Agent must:
Submit an individual paper application to the Division’s Carson City Office;
Be fingerprinted for a criminal history background report. Digital fingerprinting is available through an approved vendor;
After applying for a license, upload to the application the fingerprint confirmation receipt showing the Transaction Control Number (TCN);
After applying for a license, upload to the application the Fingerprint Background Waiver. The Fingerprint Background Waiver gives the Division legal authority to review your background report. Without the background waiver, your application cannot be fully reviewed or approved. To complete the background waiver, enter “Nevada Division of Insurance” in paragraphs 1 and 9, initial and date the bottom of page 1, and enter your name, date and signature on the bottom of page 2. Leave all of the agency information blank. Here is a sample background waiver;
Remit payment of all applicable fees.
Note: The appointment fee required by NRS 680B.010 ($15) should be paid by the appointing insurer.
A business entity applying for a license as a Managing General Agent must:
Submit a business entity paper application to the Division's Carson City Office;
Obtain a copy of its license for each location, but must only obtain one original license as a Managing General Agent.
Name each general partner and each natural person to act for the firm or corporation in the license and each must qualify as an individual licensee. A natural person who is authorized to act for a firm or corporation and who also wishes to be licensed in an individual capacity must obtain a separate license in his or her own name.
Remit payment of all applicable fees;
Business entities must promptly notify the Commissioner of all changes among its members, directors and officers, and other persons named in the license. Upon request, the licensee shall provide to the Commissioner information concerning officers or owners of the firm or corporation who are not named in the license.
How to Renew the License
A licensee may renew their license by:
Submitting the paper renewal application to the Division’s Carson City Office;
Paying the total renewal fee.
Additional Requirements
A licensed Managing General Agent must:
Maintain a bond for $50,000;
If contracting with a third party on behalf of the insurer, enter into a contract with an insurer that covers:
The rights and duties of the insurer and Managing General Agent and, if a duty is shared by them, the contract must specify the duty each party performs.
The rights and duties set forth in NAC 683A.470 to 683A.530, inclusive.
Guidelines which the Managing General Agent agrees to follow when underwriting insurance, including:
The maximum annual premium volume of insurance he or she may write;
The rules he or she must follow to establish the rates for the insurance he or she may write;
The types of insurance he or she may write;
The maximum amount of liability per policy which he or she may commit the insurer to assume;
The exclusions from coverage, including any special limits on the coverage he or she writes for the insurer;
The territory in which he or she may write;
The provisions for the cancellation of the insurance; and
The maximum period for which each policy may be written.
Submit to the insurer an accounting of each transaction that the Managing General Agent enters into on behalf of the insurer. The records of each insurer of the Managing General Agent must be kept separate.
Hold in a fiduciary capacity and immediately deposit, in an account set up for the insurer in a bank which is a member of the Federal Reserve System, all money collected on behalf of each insurer.
Submit to the insurer all money due to the insurer not less than once each month.
Allow the insurer to examine and copy all books, records and accounts pertaining to the insurer in the control of the Managing General Agent.
Allow the Commissioner to examine and copy all books, records and bank accounts of the Managing General Agent.
Keep at his or her principal place of business in this State his or her books, records, documents, accounts and vouchers as required by the provisions of NRS 693A.050 for domestic insurers.
A Managing General Agent may also maintain a policy that covers errors and omissions.
If the contract outlined above allows the Managing General Agent to settle claims on behalf of the insurer, the Managing General Agent must:
Report all claims to the insurer in a timely manner; and
Send the insurer a copy of the claim file if the insurer so requests or as soon as the Managing General Agent knows that the claim:
Has the potential to exceed an amount determined by the Commissioner or exceeds the limit set by the insurer, whichever is less;
Involves a coverage dispute;
May exceed the agent’s authority to settle a claim;
Is open for more than 6 months; or
Is closed by payment of an amount set by the Commissioner or an amount set by the insurer, whichever is less.
A Managing General Agent must not:
Retain more than 3 months’ reserve for:
An amount estimated to be necessary to pay all of the unpaid claims of the insurer; and
The allocated loss adjustment expenses, in the account set up for the insurer pursuant to the requirements of NAC 683A.480.
Assign any part of his or her contract with the insurer required pursuant to NAC 683A.470.
Commit the insurer to participate in an insurance or reinsurance syndicate.
Appoint a producer of insurance who is not licensed by this State as a producer for the type of insurance for which he or she is appointed.
Without the prior approval of the insurer:
Pay or commit the insurer to pay a claim over an amount specified by the insurer, net of reinsurance, which exceeds 1 percent of the policyholder’s surplus of the insurer on December 31 of the prior calendar year.
Collect a payment from a reinsurer or commit the insurer to a claim settlement with a reinsurer without the prior approval of the insurer. If the approval is given by the insurer, the Managing General Agent shall promptly submit a report of the transaction to the insurer.
Allow a person who is an agent of the Managing General Agent to serve on the board of directors of the Managing General Agent.
Employ a person who is an employee of the insurer.
Delegate any duty imposed on him or her by the provisions of NAC 683A.470 to 683A.530, inclusive.
Bind reinsurance or retrocessions on behalf of the insurer. The Managing General Agent may bind facultative reinsurance contracts under obligatory facultative agreements if his or her contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded:
A list of reinsurers with which such automatic agreements are in effect;
The coverages and amounts or percentages that may be reinsured; and
Schedules for commissions.
The acts of the Managing General Agent are deemed to be the acts of the insurer on whose behalf it is acting. A Managing General Agent may be examined as if it were the insurer.
Legal Authority
Managing General Agents are regulated under the provisions of chapter 683A of the Nevada Revised Statutes (NRS) and chapter 683A of the Nevada Administrative Code (NAC).