Who are insurance brokers?
This article explains about insurance brokers who play an important role in the insurance industry. Also, how are insurance brokers different from insurance agents.
When Rohit was asked by his broker to pay a brokerage, the latter was zapped. Rohit had heard somewhere that you aren't supposed to pay any commission to any broker, but he wasn't sure though. One day, he decided to check with Mohan, his colleague who dabbled in insurance. This is what Mohan told Rohit.
Insurance brokers help you buy insurance policies. They represent insurance companies and are paid brokerage by the companies whose policies you buy. No customer is required to pay any commission or brokerage to his insurance broker.
Also, read- Who regulates insurance companies?
Having an insurance broker around helps you save time and energy. He has all the right information about the various insurance policies ( life, auto or medical). However, as a consumer, you should know whether you are speaking with an authorized broker.
Here is a list of all authorized brokers provided by the Insurance Regulatory and Development Authority of India; http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?
page=PageNo2120
All registered brokers in India are bound by a set of rules and regulations. What are those?
Every broker shall:
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| An insurance broker helps you save time while buying insurance products |
Who are Insurance Brokers
When Rohit was asked by his broker to pay a brokerage, the latter was zapped. Rohit had heard somewhere that you aren't supposed to pay any commission to any broker, but he wasn't sure though. One day, he decided to check with Mohan, his colleague who dabbled in insurance. This is what Mohan told Rohit.
Insurance brokers help you buy insurance policies. They represent insurance companies and are paid brokerage by the companies whose policies you buy. No customer is required to pay any commission or brokerage to his insurance broker.
Also, read- Who regulates insurance companies?
Having an insurance broker around helps you save time and energy. He has all the right information about the various insurance policies ( life, auto or medical). However, as a consumer, you should know whether you are speaking with an authorized broker.
Here is a list of all authorized brokers provided by the Insurance Regulatory and Development Authority of India; http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?
page=PageNo2120
All registered brokers in India are bound by a set of rules and regulations. What are those?
Code of Conduct for Insurance Brokers
Every broker shall:
- act in good faith and with full fairness
- ensure that every client understands his relationship with the broker and on whose behalf the broker is working
- he will take all the necessary steps to maintain the security and confidentiality of all client information
- shall take written permission to represent the client to the insurer
- avoid conflict of interest
- every broker shall confirm in writing that he/she is a member of Insurance Brokers Association of India or any other organization that is approved by the IRDA.
- confirm that he /she does not employ any agent or canvasser that fetches business for the said business.
- the broker shall also explain all the various product choices available to the client.
- he/ she shall explain the kind of service that he/she provides to the client
- he/ she shall not make any extravagant claims to the client while selling any product.
In addition, the Code of Conduct requires every insurance broker to disclose any commission/ remuneration that he receives from any insurer to his/ her client provided the latter makes any request.
There are several rules and regulations in this Code of Conduct for Insurance Brokers and you can read all of them by clicking this link> http://www.policyholder.gov.in/uploads/CEDocuments/brokers%20code%20of%20conduct.pdf
What is the difference between Insurance Broker and Insurance Agent?
An insurance broker represents several insurers and sells various insurance policies belonging to various companies.
On the other hand, an insurance agent represents just one insurance company. His inventory of products is therefore limited.
Do you have any questions on insurance? Please leave them in the comment box below.
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