Who Do Insurance Agents Represent?

[Steve]

FWIW: Kansas DOI says that the distinction between "agent" and "broker" has become so blurred that they use the term "producer".

In Wisconsin as well, but here the term they use for us is "intermediary."

 

[djs]

A captive agent represents his/her company first. An independent agent represents the client.

Wrong, wrong, wrong. Read your appointment contracts. You'll find even independent agents represent the company.

Basically, you, as an agent, have a fudiciary responsibility to both the carrier and the client. You're stronger responsibility is to the carrier. I know many disagree.

Keep in mind, these usually work hand in hand. A carrier wants the business, a client wants to pay as little as they can. A carrier does not want to take a risk outside of what they have as underwriting guidelines, a client wants to make sure his risk is covered.

None of this changes whether you are captive or independant. The only thing that changes, is the risk is inappropriate for a carrier, an independant can take it to another carrier, most captives can't.

It's funny, this is easier to see in the P&C world than in the health world. In P&C, you are usually paid underwriting bonuses and profitability bonuses, so protecting the company is in your own best interest.

Also, in P&C, as an agent, you may have binding authority (i.e., you issue the policy on the spot), as a true broker you never would (using the old definition of broker as a client representative). In health, you never hear the term 'binding authority', which makes the lines much more blurred.

Dan