California Insurance Brokers Vs Independent Agents

May 10, 2018

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What type of producer are you?

  1. Captive Agent

    1 vote(s)
    25.0%
  2. Independent Agent

    2 vote(s)
    50.0%
  3. Insurance Broker

    1 vote(s)
    25.0%
  1. Storm Silva
    Offline

    Storm Silva New Member

    Posts:
    7
    Likes Received:
    0
    State:
    California
    Hello everyone, I am a little confused on how insurance brokers quote customers. According to CA's DOI Brokers are not allowed to act as brokers if they are appointed with an insurance company, meaning that if they do have an appointment with a company that they sell insurance through than they are actually working as an agent. I've done some research and I've done some research and figured out the main differences between independent agents and insurance brokers. Here is what I've found so far.

    Independent Agents​
    • Represent the insurer
    • Have an appointment on file with the insurer
    • Has the power to bind coverage
    • Can not charge Brokers Fees
    • Receives commision from the insurer
    • Does not need to put up a surety bond with the State
    Insurance Brokers​
    • Represents the insured
    • Does not have an appointment on file with the insurer
    • Does not have the power to bind coverage
    • Can Charge brokers Fees
    • Can receive commision from the insurer
    • Needs to put up a surety bond with the State
    It seems to me that many independent agents call themselves Insurance Brokers when they are in fact not. I'm not 100% sure but to me it sounds like insurance Brokers are California version of an Insurance Consultant. Does anyone on here know the logistics of how Insurance Brokers work and can chime in?
     
  2. GreenSky
    Offline

    GreenSky Guru

    Posts:
    15,339
    Likes Received:
    464
    State:
    Nevada
    Life and Health licenses are agent licenses. P&C can be either or both agents and broker.

    I tell people I'm an independent agent since I sell L&H. I still have a P&C license as a broker and did write quite a bit of business through surplus lines brokers.

    Rick
     
    GreenSky, May 10, 2018
    #2
  3. FinalExpenseDojo.com
    Offline

    FinalExpenseDojo.com Guru

    Posts:
    1,419
    Likes Received:
    611
    State:
    California
    This is correct. California has some weird rules!
     
  4. jaygreen002
    Offline

    jaygreen002 Super Genius

    Posts:
    116
    Likes Received:
    9
    State:
    New York
    There's that distinction between a broker and an agent that has had increased significance in California.
     
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