In today’s post we are going to talk about the different types of insurance intermediaries, brokers, banking operators and insurance agents. We believe it is necessary to be clear about these three figures when hiring and choosing insurance and making a claim to an insurance company for a claim. Let’s start by explaining what an insurance mediator is.
What is an insurance mediator?
The mediator is the general concept that encompasses agents, banking operators and insurance brokers, they are qualified professionals who collaborate with insurers in the distribution of insurance. It is defined as the person, natural or legal, who advises those who are looking for and thinking of taking out insurance.
What is the advice of an insurance mediator?
The advice of an insurance mediator consists of making an analysis of the risks to which the client is exposed and the economic consequences that the risk that he wants to insure could generate. Once this has been identified, the mediator studies the different types and coverage of the products offered by insurance companies that best suit the client’s personal situation. An insurance mediator is an expert in the insurance sector, knows the complete offer of the types of insurance and insurance companies, general and particular specifications of the policies, as well as the price ranges of each type of insurance.
Is the activity of an insurance broker regulated?
Yes, the activity of the insurance mediator is regulated by Law 26/2006 on private insurance and reinsurance mediation , which establishes the regulatory bases and determines the minimum professional requirements that the different mediators must have.
What are the types of insurance mediators?
There are three types of mediators depending on their relationship with insurance companies: agents, banking operators and brokers. These three figures are legally incompatible with each other: no natural or legal person may act as a Broker and Agent at the same time.
1. Insurance Agent
An insurance agent maintains a contract signed directly with an insurance company, regulating its rights and obligations as well as its commissions. Agents can carry out an activity exclusively with an insurance company or carry out a related activity, that is, contracted by several insurers. In this way, there are two types of agents, exclusive and linked.
Exclusive insurance agents
Exclusive insurance agents are those agents who work with a single insurance company. If it authorizes them, they can operate exceptionally with other insurers as long as it is in lines that do not coincide with those of the authorizing insurer (for example, an exclusive agent of a life insurer could work with insurers that are dedicated to home insurance ).
Linked insurance agents
Linked insurance agents are those agents who are hired by several insurers.
Something to take into consideration as an insured is that insurance agents cannot promote the change of insurance company of the policies that have been made through their mediation.
2. Bank Operators
Banca Seguros operators are those mediators who, through credit institutions, operate as exclusive or linked agents.
3. Insurance Brokers
The broker (or brokerage if it is a legal person) offers independent and impartial advice since it cannot be exclusively related to any insurer or be influenced by its interests. The Law defines the insurance broker based on the following characteristics:
The insurance broker performs the insurance mediation independently and they are not linked to the insurance entities.
Please do enough analysis. This means that at least 3 proposals from different insurers have been evaluated, always considering the needs of the client and the criteria of the Broker.
The broker must provide information, assistance and advice to the client at all times, and especially in the event of a claim.
What is the difference between Broker and Insurance Agent?
The Insurance Broker has higher obligations and requirements than the Agent. The obligations of the insurance broker are the administrative authorization, the legal capacity to exercise trade, the mandatory obtaining of the title of insurance mediator, as well as commercial and professional repute, so it can be said that the Insurance Broker is a professional more qualified than the insurance agent.
As a reference, in recent years some online insurance brokerages have emerged, which have the entire insurance offer on the web and even have insurance comparators , they do not charge a commission to the user but to the insurer.
As a summary and to clarify the benefits to the insured.
What are the advantages of purchasing insurance through an insurance broker?
- Comprehensive, individual and personalized advice
As we explained previously, the insurance mediator must provide professional advice, offering the best offer that suits the client and continues throughout the term of his policy, guiding him throughout the life of the insurance according to the characteristics of the policy. hired.
- Rigor and transparency
All active and practicing insurance brokers must be registered in a public file registered with the DGSFP .
- Service at no cost to the customer
All types of insurance intermediaries receive their economic income from the insurers so there is no extra cost for their policyholders.
- Effective management and After-Sales Service
The insurance mediator assists the insured throughout the life of the insurance policy, not only in the procedures prior to contracting but also in the management, monitoring compliance with the contracts by the insurer. They also help the insured in the processing of their claims, but it is limited only out of court.
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