A local agent represents a carrier within a particular city or town. He may represent multiple carriers: he might represent mutual and stock companies. Naturally, the commission paid by the local agent is lower than that of general or regional agents. The local agent provides little in the way of technical insurance services.
These services can be provided by either the regional or general agent or the branch or home office. The local agent is primarily a salesman. His job is to get business and give home insurance quotes.
He is a recording agent for fire insurance. This means that he prepares and countersigns policy documents on behalf of his clients. He is similar to a regional or general agent in casualty insurance except that his commission rate and the business he writes are lower.
A representative may be attached to the branch office, home office or general agency. This representative solicits only for a particular carrier or general agent. He is also known as an “office representative”. He is an “office agent” and is considered an employee of the carrier. His only pay is a commission on the business he produces, which is generally the same rate as a local agent.
However, the office agent may make more than the local agent because his office and supplies are provided to him. An office agent might ask permission to write business in other companies than the one he benefactors.
Private health insurance providers may not be anchored to companies through agency contracts or employer-employee partnerships. Others are independent operators who search for the best coverage for their clients.
These producers are known as “brokers.” Brokers are agents of buyers of insurance and not of the companies where they do business. However, the commission paid to them by the companies is a commission.
They are not required to charge the broker any commissions. The premiums that they pay for their insurance cover are “loaded” to cover all commissions. Indirectly, the client also pays commissions to both the broker and agent.
The commission paid to the broker is typically less than that of an agent. The broker can accept business from the broker while still making a small profit. However, brokers may accept business directly from the company, rather than through an agent.
Insurance brokers may only be insurance salesmen and not provide any technical insurance services. These brokers rely on the companies to provide these services to their clients. To help clients get the best affordable homeowner insurance rate, other brokers have a team of engineers. These engineers review the ratings of their clients as well as the exposures. They can also provide advice on loss prevention activities.
They are more common in metropolitan areas and work extensively with large-exposure business corporations. Some brokers may even become insurance managers for corporations. Some insurance brokerage firms have a national reach, while others are international.
Although brokers aren’t very prominent in life insurance, they are vital in the fire and casualty line; they are especially important in marine insurance. Producers may operate as both brokers and agents, acting as both brokers in the metropolitan area and agents in their home communities. Some are agents for life insurance companies, while others act as brokers for fire or casualty insurance.
The solicitor is the last type of producer. He is not able to bind the company nor write policies. He only finds potential insurance prospects and handles the business through a local broker, agent, branch, or service office.