There are reinsurance and insurance companies in the sales system . The insurers purchase their products - individuals, legal entities that have concluded contracts with a particular seller. Insurance intermediaries are legal, competent individuals who carry out activities to conclude insurance contracts. Their goal is to help conclude an agreement between the insurer and the policyholder.
Insurance Company Intermediaries
Consider what this concept means. The intermediaries of the insurance market will not be representatives of contracts concluded with their help. Their task is to be a link between the parties to the transaction. Their activities are carried out as part of an agreement between an intermediary and an insurance company. The purpose of intermediary services is a monetary reward. The contract indicates the rights and obligations of the two parties, and if the terms of the agreement are not observed, a penalty is stipulated.
The main conditions for the activities of the insurance intermediary are spelled out in the contract that he represents:
- Payment amounts 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 the forms.
Insurance intermediaries are agents, as well as brokers, emergency commissioners, surveyors. Their goal is to help sell the services of insurance companies, conclude reinsurance agreements. In 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 competent persons who have concluded an agreement with an insurance company and execute 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 circle of the latter, he needs to consult: on the list of insurance services of the company, the execution of the contract, additional securities, signing, receiving cash, issuing a receipt for payment; bring the contract to completion (receipt and transfer of contributions during the term of the agreement, maintaining the client when paying).
Insurance agents can be both legal entities and individuals. In the majority, it is the latter that prevail, and their relationship with the insurer is based on the management department system. Such units are considered to be located in various regions, thereby covering the whole country. All offices are subordinate to companies, are affiliates. Depending on the working conditions, the agents are divided:
- direct;
- mono-credential;
- multi-member.
Direct agents
Insurance intermediaries include direct agents. They are on the staff of the organization, have the right to sell the services of only this company, receive remuneration from sales, as well as salary and social package. Those agents are highly qualified individuals. But the company constantly incurs costs due to remuneration. As a result of this, agents have no motivation to increase the number of new customers, which means few agreements are signed.
Mono-Credential Agents
Mono-mandatory agents, in contrast to direct agents, receive only remuneration for the sale of services. This method increases sales, but the quality of the operation may deteriorate. The agent may enter into an agreement, which will have to pay a high price. In order to avoid violations of insurance conditions , insurance companies motivate employees to increase the quality of contracts, for example, reduce remuneration, prescribe the conditions under which it is impossible to insure a particular object.
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 in one or more types of insurance. Such workers are usually used by small companies without their own network of employees.
Legal entities
Legal persons can act as intermediaries in the insurance market, for example, organizations of a different profile, together with their services, offer clients programs of a particular insurance company. But also agents - legal entities can be independent business entities. It uses a system of general agents. The contract is concluded between the insurance company and the general agent, the latter becoming the representative of the organization in a certain region.
The general agreements prescribe:
- types of services the agent will sell;
- the territory where he has the right to provide them;
- restrictions on the conditions for concluding agreements;
- remuneration for work;
- rights and obligations of both parties;
- data of two parties.
Often, insurers for the agent’s work provide him with premises, take on various kinds of expenses, that is, financially support them. 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 labor.
The general agent organizes labor, directs subordinates, trains them, selects a work area for each, checks and controls activities. For this he receives his reward. Before starting work, the agent must find out whether he has the right to independently sign the contract in the process of selling the service, whether he has forms with the signature of a superior person, or after entering all the data in the contract, he must come to the signature of the general agent. This must be determined before going to the client, so as not to spoil the negotiations, to be prepared.
Insurance intermediaries receive remuneration depending on the volume of services rendered and for what types. Typically, the amount 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 competent individuals and legal entities that carry out their activities as entrepreneurs, using instructions from the insurer. Their main job is to assist in concluding contracts, finding the best options that are beneficial for both parties.
Services that insurance brokers do:
- customer search;
- offer products that may be of interest to the client;
- clarification of insurance conditions for certain types of services;
- consultation on risks in the contract;
- collection of information on issues arising during the negotiations;
- preparation of documentation, execution of all necessary papers;
- reinsurance of previously insured objects;
- the introduction of the contract in the future, the organization of the services of emergency commissioners;
- preparation, adoption of documents related to insurance claims for further payment to the client;
- sending documentation for payment.
The broker, unlike the agent, is an independent intermediary, and combines the interests of the insurer and the client. He is a consultant to the policyholder, as well as his advocate. The broker is obliged to find for the client a program suitable for him, to tell all the terms of the contract, as well as exceptions to the 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. Typically, 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, and the duration of the contracts. After the insured event has occurred, the broker transfers the client's documents to the insurer, helps with payment transactions. Typically, brokers for their activities, receive remuneration from the insurance company for which they have concluded a contract.
Licensing
Only legal entities can engage in insurance activities. The license of the insurance company is issued if there is a monetary fund for the possibility of receiving insurance payments by customers. A license is issued separately for compulsory and voluntary services. Each product must have its own license. That is, the document should indicate the specific type of service provided.
Restriction and prohibition on issuing a license
To obtain a license, an organization must meet certain requirements. When restricting the validity of the document, a ban on insurance occurs before 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. Moreover, the cash reserve can only be used to cover insured events under contracts. Insurance intermediaries are required to possess license information. And when it is withdrawn or limited, they must notify the client and refuse to conclude a contract.
Surveyors
Surveyors are persons who inspect property that must be taken on insurance. They determine whether it is possible to take this property for insurance, and at what maximum rate to insure it. Based on the representative’s opinion, the insurer determines the amount and the tariff scale. Also, the surveyor can inspect the property, after an insured event has occurred, to determine the amount of damage caused. Insurers, policyholders, insurance intermediaries interact with surveyors on the basis of a contract. Surveyor services are commonly used in 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, identify the existing risk (that is, the event that occurred was the insured risk). Emergency commissioners represent the interests of insurance companies (may be individuals or legal entities) upon the requirement of the insured to receive payment of damage. 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 intermediary details), which you need to contact. The terms of circulation after the occurrence of the insured event are also specified in the contract. It is necessary to familiarize yourself with the period of time when you can contact the commissioner, the payment will depend on this. The policyholder, in turn, must immediately seek help.
Responsibilities of the emergency commissioner:
- inspection of the damaged and the search for the missing property;
- identification of the cause, complexity, nature, size of the damage received;
- writing a conclusion with full information;
- Negotiating by the insurance company about the amount of payment.
Emergency commissioners can work in the structure of the insurance company, or separately in the form of 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 the emergency commissioner becomes an insurance intermediary.