Insurance intermediaries: concept, definition, functions performed, their role in insurance, work procedures and responsibilities

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In the sales system, there are reinsurance and insurance companies. Their products are purchased by insurers - individuals, legal entities that have concluded agreements with one or another seller. Insurance intermediaries are legal, able-bodied individuals who carry out the activities of concluding insurance contracts. Their goal is to help conclude an agreement between the insurer and the policyholder.

Insurance Intermediaries

Let's consider what this concept means. Intermediaries of the insurance market will not be representatives of contracts concluded with their help. Their task is to be a link between the participants in the transaction. Their activities are carried out within the framework of an agreement between the intermediary and the insurance company. The purpose of mediation services is a monetary reward. The contract specifies the rights and obligations of the two parties, as well as punishment for non-compliance with the terms of the agreement.

The main conditions for the activities of an insurance intermediary are specified in the contract that he represents:

• Payment rates for various products, payment terms.
• Duration of the contract.
• Information about insurance intermediaries, insurance agents and participants in the transaction.
• Types of insurance products.
• Information about the terms of use of forms.

Insurance intermediaries are agents, as well as brokers, emergency commissioners, surveyors. Their purpose is to assist in the sale of services of insurance companies, the conclusion of reinsurance agreements. On the territory of the Russian Federation, it is impossible to perform intermediary work from insurance companies of other countries (with the exception of the sale of the Green Card).

Agents

Insurance agents are able-bodied persons who have entered into an agreement with an insurance company and perform its instructions, based on the instructions of the organization. The main role of insurance intermediaries is to find customers. After the agent has determined the range of the latter, he needs to consult: on the list of the company's insurance services, execution of the contract, additional paperwork, signing, receiving funds, issuing a payment receipt; bring the contract to completion (receiving and transferring contributions during the term of the agreement, maintaining the client during payments).

Insurance agents can be both legal entities and individuals. It is the latter that predominate in the majority, and their relationship with the insurer is based on a system of managerialdepartments. These are considered units located in different regions, thereby covering the entire country. All offices are subordinate to companies, are branches. Depending on the working conditions, agents are divided:

• straight;
• mono-mandate;
• multi-member.

Direct agents

Insurance intermediaries are direct agents. They are on the staff of the organization, they have the right to sell services only to this company, they receive remuneration from sales, as well as a salary, a social package. These agents are highly qualified individuals. But the company incurs constant costs due to wages. As a result, agents have no motivation to increase the number of new clients, which means that few agreements are signed.

Mono-mandate agents

Mono-mandate agents, unlike direct agents, receive only remuneration for sales of services. This method increases the volume of sales, but the quality of the operation may deteriorate. The agent may enter into an agreement under which a high payment will have to be made. In order to avoid violations of insurance conditions, insurance companies motivate employees to increase the quality of contracts, for example, reduce remuneration, prescribe conditions under which one or another object cannot be insured.

Multi-member agents

Multi-member intermediaries of an insurance company, unlike others, have the right to carry out activities with several companies. Usually, they are specialists of one or more types.insurance. Such workers are usually used by small companies without their own network of employees.

Legal entities

Intermediaries of the insurance market can be legal entities, for example, organizations of a different profile, together with their services, offer clients programs of one or another insurance company. But also agents - legal entities can be economic independent entities. Here the system of general agents is used. The contract is concluded between the insurance company and the general agent, and the latter becomes the representative of the organization in a certain region.

The general agreements stipulate:

• types of services the agent will sell;
• territory where he has the right to provide them;
• restrictions on conditions for concluding agreements;
• compensation for work;
• rights and obligations of both parties;
• data from both sides.

Often, insurers for the work of an agent provide him with premises, take on various kinds of costs, that is, financially support him. The general agent makes sales using employees (agents and subagents). They, in turn, become representatives of the general agent himself. Agents carry out sales, other types of consultations, receive payment for their work.

The general agent organizes work, directs subordinates, trains them, selects a work area for each, checks and controls activities. For this he receives his reward. BeforeAt the beginning of work, the agent must find out whether he has the right to independently sign the contract in the process of selling the service, or whether he has forms with the signature of a superior person, or after entering all the data into the contract, he must come to the general agent for signature. This must be determined before going to the client, so as not to spoil the negotiations, be prepared.

Insurance intermediaries receive remuneration depending on the volume of services provided and for what types. Usually the volume is determined by the amount of money received in a calendar month, as well as the number of contracts concluded.

Insurance Brokers

Insurance brokers are able-bodied individuals and legal entities operating as entrepreneurs, with the help of instructions from the insurer. Their main job is to assist in the conclusion of contracts, the search for the best options that are beneficial to both parties.

Services provided by insurance brokers:

• search for clients;
• offer products that may be of interest to the client;
• explanation of insurance conditions for certain types of services;
• consultation on risks in the contract;
• gathering information on issues that arose during the negotiations;
• preparation of documentation, execution of all necessary papers;
• reinsurance of previously insured objects;
• introduction of the contract in the future, organization of emergency commissioner services;
• preparation, adoption of documents related toinsured events, for further payment to the client;
• sending payment documentation.

A broker, unlike an agent, is an independent intermediary, and connects the interests of the insurer and the client. He is an adviser to the insured, as well as his advocate. The broker is obliged to find a program suitable for the client, to tell all the terms of the contract, as well as exceptions to payments. He must report on the possibility of reducing the risk for the occurrence of an insured event, find a reliable insurance company for the client. Usually, brokers are contacted when qualified assistance is needed, for example, insurance of industrial enterprises. The broker must have information about the activities of insurance companies, their payments, tariffs, risks, duration of contracts. After an insured event occurs, the broker transfers the client's documents to the insurer and helps with payment transactions. Usually, brokers for their activities receive remuneration from the insurance company for which they have concluded an agreement.

Licensing

Only legal entities can engage in insurance activities. An insurance company license is issued if there is a cash fund for the possibility of receiving insurance payments by clients. The license is issued for compulsory and voluntary types of services separately. Each product must have its own license. That is, the document must indicate the specific type of service provided.

Restriction and prohibition in issuing a license

To obtain a license, an organization must comply withcertain requirements. When the validity of the document is limited, there is a ban on insurance until the insurer eliminates all identified violations. Revocation of a license is a ban on insurance activities, with the exception of contracts that were concluded before. At the same time, the cash reserve can only be used to cover insured events under contracts. Insurance intermediaries are required to have information about the license. And when it is withdrawn or limited, they must notify the client and refuse to conclude the contract.

Surveyors

Surveyors are persons involved in the inspection of property to be accepted for insurance. They determine whether this property can be accepted for insurance, and at what maximum rate it can be insured. Based on the conclusion of the representative, the insurer determines the amount and tariff scale. Also, the surveyor can inspect the property, after an insured event has occurred, to determine the amount of damage. Insurers, policyholders, insurance intermediaries interact with surveyors on the basis of a contract. Surveyor services are commonly used for marine insurance of ships and cargo.

Emergency commissioners

The activity of emergency commissioners is needed in insured events to determine the circumstances of the case, the amount of damage, to identify the existing risk (that is, whether the event that occurred was an insured risk). Accident commissioners represent the interests of insurance companies (can be an individual or a legal entity) upon request of the insured to receivedamage payments. Some insurance companies, in the process of concluding a contract with a client, provide the latter with information about the commissioner (in the insurance contract itself or give out the details of the intermediary) who needs to be contacted. The contract also specifies the terms of treatment after the occurrence of an insured event. It is necessary to familiarize yourself with the period of time when you can contact the commissioner, the payment will depend on this. The insured, in turn, must immediately seek help.

Responsibilities of the emergency commissioner:

• inspection of damaged and search for missing property;
• identifying the cause, complexity, nature, size of the damage received;
• writing a conclusion with full information;
• negotiating with the insurance company about the amount of the payment.

Accident commissioners can work in the structure of an insurance company, or separately as entrepreneurs. In the second case, emergency commissioners can work with several companies, but it is necessary to conclude an agreement between the insurer and the organization. Only then does the emergency commissioner become an insurance intermediary.