Managing General Agent License Info

IMPORTANT NOTICE:  The license of an MGA who did not renew as of March 31, 2015 has now lapsed. Vermont does not have a “grace period” for a license renewal, and a license cannot be “reactivated”. Managing General Agents, whose license has lapsed, must apply for a new license in Vermont. In order to apply for a license, follow the instructions listed under How to Apply for a License.

Information about licensing requirements, how to apply for a license and FAQs. Vermont Law defines a Managing General Agents to mean any person who manages all or part of the insurance business of an insurer and acts as an agent for such insurer, and, who, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross written premium greater than or equal to five percent of the policyholder surplus of the insurer in any one quarter or year; and adjusts or pays claims in excess of $10,000.00; or negotiates reinsurance on behalf of the insurer.

License Requirements

In order to obtain a Managing General Agents (MGA) license an applicant must be at least 18 years of age; be deemed by the Commissioner to be competent, trustworthy, and of good business reputation; submit a bond in the amount of $20,000; be licensed as a producer in Vermont and submit a license application and fees.


How to Apply for A License

Resident:

An applicant must submit to the Department the following: 

  1. NAIC Uniform Individual Application (This application is used for ALL license types, though they are not all specified on the form);
  2. A bond in the amount of $20,000;
  3. A license application fee of $30.00 and a license fee of $300.00; Checks should be made payable to VT Dept. of Financial Regulation.
  4. Be licensed as a Vermont Insurance Producer.

Attachment #1 Social Security Disclosure is for your information.

Application Submission Note: Although a license can be issued without an appointment, a licensee cannot act as an agent of an insurer without an agent appointment by the insurer. Each insurer for whom you act as an agent must appoint you. Only an Insurer is authorized to submit an appointment form.

Nonresident:

An applicant must submit to the Department the following

  1. NAIC Uniform Individual Application (This application is used for ALL license types, though they are not all specified on the form);
  2. A home state certification (certifications should be dated no more than 90 days prior to receipt by the department of a completed application);
  3. A bond in the amount of $20,000; and,
  4. A license application fee of $30.00 and a biennial license fee. Find your state of residence to determine the license fee. (See Fee Chart) Please note, Vermont is a retaliatory fee state. Checks should be made payable to VT Dept. of Financial Regulation.

Attachment #1 Social Security Disclosure is for your information.

Application Submission Note: Although a license can be issued without an appointment, a licensee cannot act as an agent of an insurer without an agent appointment by the insurer. Each insurer for whom you act as an agent must appoint you. Only an Insurer is authorized to submit an appointment form.

For further information about MGA’s and the duties of controlling agents, applicants should refer to Subchapter 2 of Chapter 131 Title 8, §4815-§4823.


FAQs

 What is a Managing General Agent?

A Managing General Agent is any person who:

(i) manages all or part of the insurance business of an insurer and acts as an agent for such insurer, and, who, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross written premium greater than or equal to five percent of the policyholder surplus of the insurer in any one quarter or year; and

(ii) engages in one or more of the following activities on the business produced:

(I) adjusts or pays claims in excess of $10,000.00; or

(II) negotiates reinsurance on behalf of the insurer.

(B) The following persons shall not be considered a managing general agent.

(i) An employee of the insurer;

(ii) A United States manager of the United States branch of an alien insurer;

(iii) An underwriting manager who, pursuant to contract, manages all, or part of the insurance operations of the insurer, is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written, or if based on the volume of premiums written is also based on the insurer earning a profit on the business written by such underwriting manager;

(iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney.

See Title 8, §4815.

What is the license term?

The license term is April 1st to March 31st of odd years.  The Department will send out renewal notices for existing licensees at the beginning of the odd year. Note, license fees are not prorated and the license term is fixed, regardless of time of application.

What is the renewal fee?

2015 renewal fee chart.

Are there specific duties and requirements of Managing General Agents and Insurers using Managing General Agents?

Yes.  Applicants should review the requirement of Subchapter 2 of Chapter 131 of Title 8 for the requirements of Managing General Agents.  In particular, applicants should review Section §4818, addressing contract requirements; Section §4819, addressing duties of insurers utilizing Managing General Agents, Section §4821 regarding maintenance of books and records; and Section §4823, setting out “other” requirements.


For answers to additional questions that have not been addressed in the FAQs above, send an email to sandra.fraser@vermont.gov please be sure to provide a telephone number where we can contact you.

Vermont Department of Financial Regulation
Insurance Division – Producer Licensing
89 Main Street
Montpelier, VT 05620-3101
(802) 828-3303 Telephone
(802) 828-1633 Fax