In the context of an MGA, what is true regarding their authority?

The assertion that an MGA (Managing General Agent) facilitates business without delegating authority aligns with the fundamental role of an MGA in the insurance distribution network. An MGA operates as a specialized intermediary, often managing certain aspects of the insurance business on behalf of an insurance company. While they do hold a significant degree of authority, such as underwriting or binding coverage, they typically do not have the ability to delegate these responsibilities further to agents or brokers.

Instead, MGAs serve to streamline operations, enhance efficiency, and improve the accessibility of insurance products for agents. They play a crucial role in maintaining relationships with both insurance carriers and agents, often providing support in training, marketing, and claims handling, without passing on the authority they have been granted by the insurer. The primary function remains the facilitation of business processes rather than delegation, which clarifies why this understanding of their authority is critical in the context of the insurance industry.