The Role of Insurance Agents and Brokers in the Distribution of Insurance Products
INSURANCE AGENT
Insurance agents are intermediaries between the applicant for insurance and the insurance company. They are not a party to the insurance contract.
An insurance agent represents the insurance company in dealings with a third party.
Example: The XYZ Insurance Company has entered into an Agency Agreement with Justin Case Agencies. All salespeople who work at Justin Case Agencies are considered to be agents for this insurance company when selling its products. As agents of the insurance company, they are given the authority to accept insurance applications from consumers (third parties) who need insurance.
Note: Sometimes agents will be given additional authority to act on behalf of an insurance company. This additional authority could be for doing things such as issuing policies, making policy changes, and/or settling claims under specific amounts.
Most insurance offices will have an Agency Agreement with more than one insurance company. When selling for Insurer A, they are considered to be agents for Insurer A. When selling insurance for Insurer B, they are considered to be agents for Insurer B.
Insurance agents need to be licensed before engaging in the business of insurance.
The name of the insurance office will usually reflect its agency status (e.g.R. Jone’s Insurance Agency, Fleet Agencies).
Representatives of life insurance companies who sell only life insurance are also called agents.
INSURANCE BROKER
Insurance brokers are intermediaries between the applicant for insurance and the insurance company. They are not a party to the insurance contract.
Insurance brokers represents the client in dealings with insurance companies. They are considered to be independent middlemen not tied to a particular insurance company.
When placing insurance for the client, the broker will seek out an insurance company that has the insurance policy that will best suit the client’s needs.
Example: The insurance brokerage does not need a formal agreement with the insurance companies it uses to provide their clients with insurance. Instead, those companies will determine at the time a quotation or application for insurance is submitted to them if they are interested in providing that insurance. When the broker has received an insurance quote from two or more insurers, they will select the one that best fits their client’s insurance needs.
Like with agents, sometimes brokers will be given additional authority to act on behalf of an insurance company that writes a lot of business with that broker. This additional authority could be for doing things such as issuing policies; making policy changes; settling claims under specific amounts.
Insurance brokers have a primary duty to their clients and are expected at law to exercise reasonable skill, care and diligence.
Insurance brokers also have a primary duty to ensure that they act ethically at all times in any dealings with an insurance company. An integral part of this duty is to:
– ensure that they always tell the truth about the applicant and/or the risk being submitted for insurance, and
– they must not withhold any information that the insurance company would consider important in making the decision whether to provide the applicant with insurance.
An insurance broker can also serve as an agent for an insurance company.
For the most part, the term “insurance broker” has generally replaced the term “insurance agent.” The rationale is that even though an insurance office may be an agent for two or more insurance companies, they really function as insurance brokers by selecting the best policy from those insurers for their client.
Insurance brokers need to be licensed before engaging in the business of insurance.
Point 9: The name of the insurance office will usually reflect its brokerage status
(e.g. R.W. Insurance Brokers, Cunningham’s Insurance Brokerage).
In the spirit of Thanksgiving, here is just 1 of the many reasons to be grateful for your career in insurance.
Your Job is to Help People Protect Their Way of Life and Get Back on Their Feet
In insurance, you are not just a cog in the corporate machine: you are making a difference in people’s lives—and there are simply no words for how good that feels.
Excerpt from 10 Reasons to be thankful you work in Insurance by Antonio Canas
The 2018 Intact Insurance Commercial Producer School was an amazing success!
Students from BC, Alberta, Saskatchewan and Manitoba all attended this years 19th Annual Intact CPS course at the Westin Bear Mountain Golf Resort, Victoria BC from September 24 – September 28, 2018.
The five day course included a curriculum that provided in depth coverage on ideal selling practices; structured to combine group activities, case studies, structured feedback, and sales techniques within a community oriented network.
Together with Intact, ILScorp, West Coast Training and Dynamic Leadership Inc, a structured training program for sales preparedness included:
Four Step Sale Process,
Sales Training & Selling Techniques,
Building Value to Overcome Objections,
Strategies to Overcome Price Objections,
Ways to Deal with Prospects,
Exceed Customer Expectations,
Underwriter Attention and Support
Customer Knowledge
Social Media and Branding Strategy
Rounded knowledge of the industry from a broker and company perspective
Relationship building with Intact / ILScorp / West Coast Training and Dynamic Leadership
To view a video of past Commercial Producer Schools, click on the link below.
Financial management is the big-picture enterprise of which record-keeping is one significant activity. Overseeing the assets, liabilities, capital structure, income and expenses of the brokerage to support its profitability is the function of financial management. In order to produce the “numbers” that add up to success, managers must possess the skills to orchestrate all the elements that contribute to the financial picture.
By the end of this course you will be able to:
Describe the main activities that comprise the financial management cycle
Describe the concepts involved in managing incomes and expenses
Explain tax factors regarding employee compensation and equipment leasing
Explain how to measure brokerage performance through financial analysis
Once you have completed your CE, do not send the continuing education certificates to RIBO. Each individual is responsible for their continuing education hours and certificates as the continuing education program is self-regulatory. It is recommended that each individual maintain a Continuing Education Record Sheet and folder to place the certificates received from seminar providers. There will be a question on the annual renewal form to declare compliance with the Continuing Education Program. For spot check purposes, continuing education certificates should be kept for 5 years to indicate compliance with the Continuing Education Program. The Principal Broker will be responsible for ensuring that licensed individuals comply with RIBO requirements.
Did you know ILScorp keeps a digital record of your completed course history on file for up to 7 years?
Penalties for non-compliance will be imposed by the Qualification and Registration Committee. Non-compliance by:
Principal Brokers
Will result in the registration of the Principal Broker being referred to the Qualification and Registration Committee to review and revoke the Principal Broker status. This may also result in the brokerage firm being subject to review by the Qualification and Registration Committee for non-compliance of the Principal Broker requirement.
Deputy Principal Brokers and all other licensed individuals
Will result in the suspension of the license until full compliance has been met.
CE Requirements
Principal Brokers and Deputy Principal Brokers
10 hours of continuing education credits every year between October 1st and September 30th. A minimum of 5 hours must be in the Management category. The remaining hours may be in the Management or Technical category. There is a carryover of a maximum of 10 hours (or one term’s requirements) allowed for the next term (requirement of minimum of 5 hours in the Management category still applicable).
All other licensed individuals
8 hours of continuing education credits every year between October 1st and September 30th in any category. There is a carryover of a maximum of 8 hours (or one term’s requirements) allowed for the next term.
Newly licensed individuals
The continuing education program of 8 hours every year between October 1st and September 30th will begin the first October following registration. Individuals are only exempted for the remainder of the license year that they were registered.
Key Regulatory Provision – ONTARIO REGULATION 991 5. (1) An individual is qualified to be issued and hold a certificate of registration as an insurance broker where, (d) the individual complies with the continuing education requirements established by the Council.
Principal Brokers and Deputy Principal Brokers:
10 hours of continuing education credits every year between October 1st and September 30th. A minimum of 5 hours must be in the Management category. The remaining hours may be in the Management or Technical category. There is a carryover of a maximum of 10 hours (or one term’s requirements with a minimum of 5 hours in the Management category) allowed for the next term.
Personal Skills hours/credits cannot be applied towards the continuing education requirements. Principal Brokers and Deputy Principal Brokers who apply Personal Skills hours may experience a shortfall which may place their registration in non-compliance of the requirements.
Non-compliance of the requirements by the Principal Broker will result in the registration of the Principal Broker being referred to the Qualification and Registration Committee to propose to review and revoke the Principal Broker status. This may also result in the brokerage firm being subject to review by the Qualification and Registration Committee for non-compliance of the Principal Broker requirement. Deputy Principal Brokers who are in non-compliance of the continuing education requirements will result in the suspension of the license until full compliance has been met.
All other licensed individuals:
8 hours of continuing education credits every year between October 1st and September 30th in any category. There is a carryover of a maximum of 8 hours (or one term’s requirements) allowed for the next term.
Non-compliance of the requirements will result in the suspension of the license until full compliance has been met.
Newly licensed individuals:
The continuing education program of 8 hours every year between October 1st and September 30th will begin the first October following registration. Individuals are exempted for the remainder of the licence year that they were registered.
E.g. Broker A was registered on November 1, 2006 and Broker B was registered on April 30, 2007. Both Broker A and Broker B will not be required to have accumulated any continuing education credits
by September 30, 2007, but must begin taking the continuing education seminars/courses on October 1, 2007.
Category Definitions:
Each continuing education course/seminar/workshop that is submitted for accreditation is reviewed in accordance with the Broker Skills Reports which outlines the skills set necessary to carry out the duties and responsibilities of a broker.
Management
Subjects related to the RIB Act and Regulations, human resources, general management, accounting, computerization, and generally topics relevant to the operation of an insurance brokerage.
Technical
Subjects directed towards imparting of general insurance product knowledge and/or technical insurance expertise including risk management and loss prevention.
Personal Skills (Not eligible for Principal or Deputy Principal Brokers)
Subjects related to skills required to function efficiently in an insurance brokerage office, as a customer service representative or as a producer. Subjects would include, but not limited to, sales and
marketing skills, and communication and writing skills.
For spot check purposes, continuing education certificates should be kept for 5 years to indicate compliance with the Continuing Education Program. The continuing education certificates are not to be submitted to RIBO unless specifically requested by RIBO during a spot check. The Principal Broker will be responsible for ensuring that licensed individuals comply with RIBO requirements. However, it is also each individual’s responsibility to keep track of their own continuing education hours and certificates for 5 years, even if the brokerage firm/employer keeps a record of it.
Individuals who cannot confirm compliance with the continuing education requirements following a spot check will result in having their licenses suspended. These individuals will not be able to conduct
any business with members of the public until they are in full compliance and had their licenses reinstated by RIBO.
All individuals will also be asked at each renewal, to declare compliance with the Continuing Education Program. If the continuing education requirements have not been completed at the time the renewal application form is being filed, the question must be answered accordingly with a brief explanation. By answering that the requirements have been completed when in fact they have
not been, individuals have knowingly falsified the renewal application. Falsification on the annual renewal form constitutes an act of misconduct resulting in an individual’s file being referred to the Complaints & Discipline or Qualification & Registration Committee for review and disciplinary action.
