Insurance is not necessity of human beings. It is optional. It providers facilities and services only one occurrence of a specific incident or event. So insurance business is not easy. People should be convinced and stimulated of purchase the insurance. Then only they feel the need of insurance of their life and property. this clarifies the significance and importance of agent and brokers in the insurances business. In general point of view, there is no basic difference between agent and brokers. But there is basic difference between them.
Agents
An agents is someone who legally represents the insurer and has the authority to act on the insurer's behalf. Agent can be bound by the principal with expressed powers, with implied powers, and with apparent authority. if someone buys insurance, s/he will probably purchase the insurance from the agent of insurance company. However, there is an important difference between a life insurance and a property and liability insurance agent.
A life insurance agent usually does not have the authority to bind the company. S/he is merely a soliciting agent who induces persons to apply for life insurance. The company must approve the applicant for life insurance before the insurance becomes effective. In contrast, a property and liability insurance agent typically has the power to bind the company immediately with respect to certain types of coverage.
A special binder normally creates this relationship, which is temporary evidence of insurance until the original policy is actually issued.
Brokers
A brokers is person, who legally represents the insurer ot insurance company. Generally, broker accepts applications for insurance and then places the coverage with an appropriate insurer. However, the insurance is not in force until the insurer accepts the business . In this way, a broker legally does not have the authority to bind the insurer. This is the main difference between the agents and brokers.
Brokers can also be licensed for agent business. This provides the broker the authority to bind their companies as agents. Providing insurance business, brokers get a commission from the insurance company. As already mentioned, insurance is not essential, until the customers are aware of need of it. So the role agent as well as brokers is very important in the insurance business.
Noways, large brokerage forms are established in developed countries.They have vast knowledge of highly specialized insurance market. So they can provide risk management and loss control services too to the insurance buyers.
2 comments:
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