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Common terms in the E&S marketplace Before we go any further, it will be helpful to review some key terms as they are used regarding the E&S lines. Wholesaler "Wholesaler" is a generic catch-all phrase that includes all of the following agent terms defined below. In a sense, this term gets used because the marketing approach is different from that of a retail insurance agent who deals with the public. The wholesaler deals with the surplus lines marketplace and with the retail agent, but does not deal with the public. Excess and Surplus lines broker An "Excess and Surplus lines broker" is a licensed broker who may transact insurance with both admitted and non-admitted carriers. These brokers are the only ones that can transact with a non-admitted carrier (other than an individual on their own behalf for their own business). Managing general agent (MGA) A "managing general agent" can also be a broker and typically is. The difference is that an MGA acts, under contract, as the underwriting arm for a particular carrier or carriers. The carriers can be admitted and/or non-admitted. Managing general agent's have the power to accept or decline a risk, underwrite the risk, collect money from the producing broker/agent, and remit the money to the carrier. MGAs generally write for specialized classes of business. Underwriting facility An underwriting facility is a company that accepts/declines and underwrites for a particular carrier or carriers. An example: Company ABC is the underwriting facility for Company XYZ, which has no employees of its own. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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