Insurance Broker In The United States

This time we will discuss about the insurance broker in the United States, the following explanation, hopefully can be useful. okay, In the United States, the insurance broker regulated by the states. Most states require anyone who sells, solicits, or negotiating insurance in the country to obtain insurance broker license, with certain limited exception. This includes entities, officers or directors of the business entity (the "sub licenses" through whom the business entity operates), and individual employees. In order to obtain a broker license, a person usually have to take a prelicensing course and pass the exam. Insurance brokers must also apply (with application fee) to the state insurance regulator in the country where the applicant wishes to do business, which will determine whether the insurance broker has met all state requirements and will normally do a background check to determine whether the applicant is considered to trustworthy and competent. A criminal penalties for example: can lead to a state determines that the applicant is not trustworthy or incompetent. Some states also require applicants to submit fingerprints.

Once licensed, insurance brokers generally must take continuing education courses. Most states have reciprocal agreements where by brokers from one country can be easy licensed in another state. As a result of the federal Gramm-Leach-Bliley Act, most states have adopted uniform licensing laws, with 47 countries by the reciprocal of the National Association of Insurance Commissioners. A states may revoke, suspend or refuse to renew an insurance broker license at any time if the state determines (usually after notice and hearing) that the broker has been involved in activities that make brokers untrustworthy or incompetent. Due to industry regulations, smaller brokerage firms that can easily compete with large, and in most countries, all insurance brokers are generally prohibited by law from providing customers with discounts or inducements.

Insurance brokers play an important role in helping companies and individuals procuring property and casualty (liability) insurance, life insurance and annuities and accident and health insurance. For example: research shows that brokers play an important role in helping small business owners looking for health insurance, especially in the more competitive market. Average small group commissions range from 2% to 8% of the premium. Brokers provide services beyond the provision of insurance, such as providing risk assessment, insurance consulting, insurance related regulatory and legislative updates, service claims assistance, help with employee enrollment and helping to resolve benefits however, some countries consider the provision of services unrelated to insurance held through a broker to be allowed rebate or inducement.

Insurance Broker vs Insurance Agent In The United States
Although not an absolute separation, an insurance agent insurance company Representative agent-principal  by customary law. Alliance is the primary agent of the insurance carrier, not the insurance buyer. Insurance broker represents the insured generally don't have a contractual agreement with the insurance carriers and rely on common or direct methods of perfecting business transaction with insurance carriers. This can have a significant beneficial impact on insurance negotiations obtained through a broker. The term "insurance producer" generally includes both insurance agents and insurance brokers. Interesting is not it, the explanation short but full of meaning, the post is taken from source www.wikipedia.org