An insurance broker-agent is different from both an insurance broker and an insurance agent, not by any legal definition but by custom and practice. The insurance broker-agent is engaged on a contractual basis by either a single insurance entity or a group of insurers. Their primary purpose is to represent those insurers to their clients and offer the best possible terms to the customer for insurance derived from those entities. This is the “agent” part of the role.
However in addition to these duties an insurance broker-agent will also have some latitude to “shop around” on behalf of their clients in order to provide additional solutions to their needs or more fully comprehensive fixes for large scale contracts. This is the “broker” aspect of the role.
What does an insurance broker-agent do?
They attract new clients for insurers and deliver a “retail” service for those insurers, they work to market themselves to prospective clients and then deliver a series of possibilities that meet the insurance needs of those clients.
They are required to support the customer in data collection for the risk analysis part of insurance underwriting, and to complete all the necessary paperwork with them and/or on their behalf in order for their risks to be underwritten with effective policies.
Because each state in the US has fairly complex legal requirements for the way paperwork must be displayed and completed for insurance (including but not limited to the layout, the content and the printing of said paperwork) the insurance broker-agent will be required to ensure these obligations are met in full.
For more complex arrangements for large deals, such as insuring a fleet of cars for a large corporation, the broker-agent may also be able to offer representation from a group of insurance policies that better meet the client’s needs at a more attractive price point – than a single insurer can.
What are the legal obligations on insurance broker-agents in the US?
All insurance broker-agents must be certified to work in the state in which they practice, and each state will have its own individual certification requirements. It is a simple process for brokers to re-qualify in other states, and much of this can be done through online examination.
Your broker-agent competes with other insurance professionals on even ground, as the law requires that clients cannot be offered incentives based on rebates or additional discounts over insurers’ pricing policies.