Insurance Brokers

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Any person authorized to act for, or who is recognized as, the legal representative of another (the principal). An insurance agent represents the insurer in negotiating, servicing, or effecting insurance policies. An agent may be an independent contractor or employee of the insurer.

An individual or entity who represents the consumer in negotiating, servicing or obtaining coverage with insurers; a person who negotiates contracts of insurance on behalf of an insured for a fee or agreed commission from an insurer. Many brokers are also agents of the insurers with which they do business.

Account Executive
An individual–employed by either an insurance agency or brokerage–who is directly responsible for servicing accounts. Often, an account executive specializes in a particular type of coverage or insured or provides account service for a single large organization having numerous policies.

A group of persons working together to sell and service insurance policies based on contractual agreements with insurance companies.

Agent of record
An insurance agent who has the policyholder’s approval to order insurance from an insurer; an agent designated in writing by a policyholder to service certain policies on behalf of the policyholder with a company represented by the agent.

Agent’s authority
The authority granted to an agent by an insurer. In addition to express contractual authority, any agent (whether in insurance or general business) may legally be deemed to have apparent agency, which is the authority that a person dealing with the agent reasonably supposes the agent to have. An ordinarily prudent person is entitled to rely on an agent’s apparent authority regardless of agency contract provisions.

Broker network
A group of jointly owned or affiliated insurance brokerage offices that work together to develop, implement, and service their clients’ international and global insurance programs.

Broker of record
The broker designated and authorized to conduct and handle specified insurance business on behalf of the policyholder.

Captive agent
A person who represents only one insurance company and is restricted by agreement from submitting business to any other company unless it is first rejected by the agent’s captive company. Captive agents are not employees of the company, but they usually receive financial assistance in the form of allowances for office expenses and some employee benefits.

Controlling broker
The brokerage firm that produces an international or global insurance program and is responsible to the parent organization (insurance purchaser) for overseeing its design, implementation and servicing.

Corresponding broker
A broker residing in a foreign country who acts as the agent for the controlling broker and assists in servicing the controlling broker’s clients who have locations or business activities in the corresponding broker’s country. The controlling and corresponding broker usually have regular commercial relations on a number of accounts.

Domestic broker
An insurance brokerage with offices only in its own country which provides service to clients only within that country.

Excess and surplus lines broker (E&S)
A specialty insurance broker who obtains coverage on risks that are difficult to place, unique or large through insurance companies not licensed to do business in the broker’s state of domicile. These brokers are subject to special licensing requirements and usually act as wholesale brokers to agents.

General agent (GA)
An individual or entity authorized by an insurance company to be its exclusive representative in a particular geographic area for all or a specific line of business. Activities on behalf of the insurer may include marketing, appointing and supervising other agents, issuing policies, collecting premiums, and paying claims.

Global broker
An insurance brokerage with a network of domestic and foreign offices that provides coordinated service on a worldwide basis regardless of where the business originates or where the client’s risks are located.

Independent agent
An independent contractor who sells insurance usually on behalf of more than one insurance company under the independent agency system. Independent agents operate their own business, own the records of the policies sold through them, and are compensated by commissions or fees rather than a salary.

International broker
An insurance brokerage based in one country that places and services insurance in more than one country.

Lloyd’s broker
An individual–usually associated with a firm that is authorized to go onto the “floor” of Lloyd’s of London–who negotiates contracts with a Lloyd’s underwriter on behalf of clients seeking insurance coverage.

Local agent
An agent that represents an insurance company in a specific geographic territory.

Multinational broker
An insurance brokerage with operations in a number of different countries but which has not developed the full service capabilities of a global broker.

Nonresident agent
An agent domiciled in one state who becomes licensed to write insurance in another state. Agents who do business in more than one state require additional licenses to comply with legal requirements and to earn commissions in the states in which they do not have their principal offices.

Resident agent
An agent who is domiciled in the state where he or she does business.

Servicing broker
A broker located in the country of an organization’s foreign subsidiary that provides the local service requirements under an international insurance program and reports to the controlling broker.

An agent who reports to another agent or to a general or managing general agent, and not directly to an insurer.

Transnational broker
An insurance brokerage with central operations located in two different countries. This is usually the stage prior to becoming a global broker.

Brokers Operating In Canada

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