In September 1985, the Board of Governors of the World Bank endorsed the Convention establishing the Multilateral Investment Guarantee Agency.

MIGA was established and became operational on 12 April 1988 under the leadership of then-Executive Vice President Yoshio Terasawa, becoming the fifth member institution of the World Bank Group.

MIGA was established as an effort to complement existing sources of non-commercial risk insurance for investments in developing countries.

The agency also issued its first reinsurance contracts signed in collaboration with Export Development Canada and the United States' Overseas Private Investment Corporation (OPIC).

As a result, MIGA has paid closer attention to exceptionally risky countries that have little appeal to foreign investors, and has insured projects among nations in the global south.

[6] MIGA conducted a survey in 2010 which showed that political risk is the most important deterrent of long-term foreign direct investment in developing countries, even more than economic uncertainty and poor public infrastructure.

[7] MIGA's Council of Governors amended the agency's convention in 2010 in an attempt to improve the organization's effectiveness by expanding the range of investments eligible for political risk insurance.

[14] MIGA offers insurance to cover five types of non-commercial risks: currency inconvertibility and transfer restriction; government expropriation; war, terrorism, and civil disturbance; breaches of contract; and the non-honoring of financial obligations.

[18][19] The agency generally offers insurance coverage lasting up to 15 years with a possible five-year extension depending on a given project's nature and circumstances.

[20] When an event occurs that is protected by the insurance, MIGA can exercise the investor's rights against the host country through subrogation to recover expenses associated with covering the claim.

[22] MIGA requires insured investors to establish communications and consultations with local communities and set in place grievance procedures.

Under the program, small and medium enterprises may take advantage of discounted insurance premiums and no application fees, which are not available to larger investors.