FAQs on Insurance Intermediaries

Frequently Asked Questions about Insurance Intermediaries in India


Q. Who is an Insurance Intermediary?
Ans. An Insurance Intermediary means individual agents, corporate agents including banks and brokers –they intermediate between the customer and the insurance company. Insurance Intermediary also includes Surveyors and Third Party Administrators but these intermediaries are not involved in procurement of business. Surveyors assess losses on behalf of the insurance companies. Third Party Administrators provide services related to health insurance for insurance companies.

Q. Who is an Agent?
Ans. An agent is a person who is licensed by the Authority to solicit and procure insurance business including business relating to continuance, renewal or revival of policies of insurance. An agent could be an Individual Agent or a Corporate Agent. An Individual Agent, as the name suggests is an individual who in an intermediary representing an insurance company while a corporate agent is an intermediary other than an individual, representing an insurance company.

Q. What does Designated Person of a Corporate Agent mean?
Ans. A Designated Person means an officer normally in charge of marketing operations, as specified by an insurer, and authorized by the Authority to issue or renew licences under the applicable regulations.

Q. Who is a Composite Insurance Agent?
Ans. A Composite Insurance Agent means an insurance agent who holds a licence to act as an insurance agent for a life insurer and a general insurer.

Q. Who is an Insurance Broker?
Ans. An Insurance Broker means a person licensed by Insurance Regulatory and Development Authority who arranges insurance contracts with insurance companies on behalf of his clients. An Insurance Broker may represent more than one insurance company.

Q. What is the difference between an “Agent” and a “Broker”?
Ans. While an Agent represents only one insurance company ( one general, one life or both if he is a composite agent, apart from a health insurance company), a Broker may dealt with more than one life or general or both.

Q. Are “Surveyors” and “ Third Party Administrators” also Intermediaries?
Ans. Surveyors and Third Party Administrators are also termed as Intermediaries but they are not involved in marketing of insurance.

Q. Are “Agents” and “Brokers” required to be licensed?
Ans. Yes. Agents and Brokers have to be licensed by the Insurance Regulatory and Development Authority (IRDA) for life insurance or general insurance or both. They also are bound by a Code of Conduct laid down in the respective regulations.

Q. Can the Intermediary give me a discount on the premium I am supposed to pay?
Ans. No intermediary can offer any discount to you to induce you to take the policy. If any such inducement is resorted to, it is in violation of Section 41 of the Insurance Act, 1938 and all parties involved would be subject to prosecution as provided by the Law. Any discount on premium you receive would be only in terms of what the policy allows and it is given by the insurance company.

Courtesy: Handbook on insurance intermediaries. http://policyholder.gov.in

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