Rhode Island Insurance Continuing Education
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edward hulse asked:
The Legal Relationship between a Broker and an Insurance Agent.
The role of a broker differs from that of an agent. A true broker is in the business of bringing insurance buyers and sellers together. A broker acts in the interest of the insurance applicant in regard to the procuring of insurance and filling out the insurance application. However, a broker acts on behalf of the insurance company when collecting the insurance premiums and delivering the policy.
There are many large brokerage firms, such as Alexander and Alexander, Willis Coroon and Marsh & McLennan, that play an important part in the placement of property and liability insurance. These firms often specialize in placing large, multinational corporate accounts and pride themselves on their knowledge of highly unusual insurance markets.
In exchange for assisting the applicant to obtain insurance coverage, the broker receives a commission from the insurers with whom coverage is placed.
As stated, a broker’s primary responsibility is to his/her client. Brokers serve their clients by finding the appropriate insurance coverages to meet the client’s needs. In addition to serving their clients, brokers are held to the same standards as agents I terms of their responsibilities to the general public. In other worlds, because the business of insurance requires honesty and good faith, the broker is prohibited from engaging in any marketing practice that involves unfair competition or a deceptive act. Like agents, in most states brokers are required to undertake a program of continuing education to remain knowledgeable and current in areas that pertain to insurance principles, coverages, laws and regulations in order to retain their license.
CONSULTANTS AND FINANCIAL PLANNERS - ROLES AND RESPONSIBILITIES
Insurance consultants and financial planners are quite different from agents and have different fiduciary responsibilities.
An insurance consultant advises clients about insurance. This individual provides services which analyze policy provisions. A true consultant is compensated through fees for his/her services and is not commission driven through the sale of insurance policies.
The National Association of Insurance Commissioners Model and Brokers Act requires that insurance consultants be licensed. The Model Act also requires that there be a written agreement between the consultant and client prior to the performance of any services. The Model Act also spells out the fiduciary obligations of a consultant to his/her client. The consultant “is obligated under his license to serve with objectivity and complete loyalty in the interest of his client alone.” Â
As an insurance consultant one should make every effort to document the client’s needs and such needs were objectively uncovered regardless of any relationship the consultant might have with an insurance company. The best way to achieve this is to utilize detail-oriented fact finders and checklists.
Today, many insurance professionals call themselves financial planners. Unfortunately, many of these professionals fail to realize there are differences between being an agent and being a financial planner. Being a financial planner requires additional education and licensing and it also extends the potential liability of the insurance professional.
Basically, a financial planner analyzes a client’s current financial situation. Part of this process is to have the client state financial goals and prioritize future endeavors. A financial planner then could develop a plan that would help the client achieve such goals. This process requires time and often will include other financial advisors (attorney, accountant, estate planner, trust officer).
Operating as a financial planner is likely to require compliance with both state and federal licensing and registration regulations.
It is best for the insurance professional to accurately state what role he/she has in the insurance industry. Over the years, the use of the financial planner label has often been used by insurance agents and brokers. Without the additional education one cannot make such a claim. Of course, the insurance professional might be performing some type of financial planning in the interviewing process but this does not make him/her a financial planner.
Rhode Island Insurance Continuing Education
Inusurance Continuing Education
Kitchen Cabinet Organizers
The Legal Relationship between a Broker and an Insurance Agent.
The role of a broker differs from that of an agent. A true broker is in the business of bringing insurance buyers and sellers together. A broker acts in the interest of the insurance applicant in regard to the procuring of insurance and filling out the insurance application. However, a broker acts on behalf of the insurance company when collecting the insurance premiums and delivering the policy.
There are many large brokerage firms, such as Alexander and Alexander, Willis Coroon and Marsh & McLennan, that play an important part in the placement of property and liability insurance. These firms often specialize in placing large, multinational corporate accounts and pride themselves on their knowledge of highly unusual insurance markets.
In exchange for assisting the applicant to obtain insurance coverage, the broker receives a commission from the insurers with whom coverage is placed.
As stated, a broker’s primary responsibility is to his/her client. Brokers serve their clients by finding the appropriate insurance coverages to meet the client’s needs. In addition to serving their clients, brokers are held to the same standards as agents I terms of their responsibilities to the general public. In other worlds, because the business of insurance requires honesty and good faith, the broker is prohibited from engaging in any marketing practice that involves unfair competition or a deceptive act. Like agents, in most states brokers are required to undertake a program of continuing education to remain knowledgeable and current in areas that pertain to insurance principles, coverages, laws and regulations in order to retain their license.
CONSULTANTS AND FINANCIAL PLANNERS - ROLES AND RESPONSIBILITIES
Insurance consultants and financial planners are quite different from agents and have different fiduciary responsibilities.
An insurance consultant advises clients about insurance. This individual provides services which analyze policy provisions. A true consultant is compensated through fees for his/her services and is not commission driven through the sale of insurance policies.
The National Association of Insurance Commissioners Model and Brokers Act requires that insurance consultants be licensed. The Model Act also requires that there be a written agreement between the consultant and client prior to the performance of any services. The Model Act also spells out the fiduciary obligations of a consultant to his/her client. The consultant “is obligated under his license to serve with objectivity and complete loyalty in the interest of his client alone.” Â
As an insurance consultant one should make every effort to document the client’s needs and such needs were objectively uncovered regardless of any relationship the consultant might have with an insurance company. The best way to achieve this is to utilize detail-oriented fact finders and checklists.
Today, many insurance professionals call themselves financial planners. Unfortunately, many of these professionals fail to realize there are differences between being an agent and being a financial planner. Being a financial planner requires additional education and licensing and it also extends the potential liability of the insurance professional.
Basically, a financial planner analyzes a client’s current financial situation. Part of this process is to have the client state financial goals and prioritize future endeavors. A financial planner then could develop a plan that would help the client achieve such goals. This process requires time and often will include other financial advisors (attorney, accountant, estate planner, trust officer).
Operating as a financial planner is likely to require compliance with both state and federal licensing and registration regulations.
It is best for the insurance professional to accurately state what role he/she has in the insurance industry. Over the years, the use of the financial planner label has often been used by insurance agents and brokers. Without the additional education one cannot make such a claim. Of course, the insurance professional might be performing some type of financial planning in the interviewing process but this does not make him/her a financial planner.
Rhode Island Insurance Continuing Education
Inusurance Continuing Education
Kitchen Cabinet Organizers
