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In PA there is no distintion between the two so the DOI referst to the license as a "Producer's License." Some years ago there was a distinction, but that has been eliminated.
Insurance Agent vs. Insurance Broker
- Thread starter dude mud
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- #12
I appreciate everyone's responses.
I have been doing more research and being an insurance broker seems more interesting to me. The money is good. But I like the fact that there is a lot of problem solving.
Are there any websites or books anyone can point out to me to for more information?
Btw, I live in New York if that helps with the advice.
I have been doing more research and being an insurance broker seems more interesting to me. The money is good. But I like the fact that there is a lot of problem solving.
Are there any websites or books anyone can point out to me to for more information?
Btw, I live in New York if that helps with the advice.
Legally, the worlds have become totally muddled between the terms broker and agent. You have to look at the context the statements are used in to figure out what the person is talking about.
Historically, an agent worked (not necessarily as an employee) for the insurance company. Yes, you can be an agent for multiple companies at the same time. The issue here is acting as an agent, the agents fiduciary responsibilities lies with the insurance company, meaning don't use some loophole rule to place bad business with the company. Agents may have binding authority (brokers would not).
Brokers worked for the insured, not the insurance company. Their fiduciary responsibility lies with the client, not the carrier.
Then came the perception that agents were captive to carriers, brokers could represent many carriers (even as an agent role).
Now, they mean exactly the same thing. A person with a license on the wall, but it is usually meant in a way that a 'broker' can place your business with a variety of carriers to obtain the best rate, even though they usually act as an agent of the carrier, with fiduciary responsibility to the carrier.
Just figure they are the same thing and ask the person who makes these statements what he really means.
Dan
Historically, an agent worked (not necessarily as an employee) for the insurance company. Yes, you can be an agent for multiple companies at the same time. The issue here is acting as an agent, the agents fiduciary responsibilities lies with the insurance company, meaning don't use some loophole rule to place bad business with the company. Agents may have binding authority (brokers would not).
Brokers worked for the insured, not the insurance company. Their fiduciary responsibility lies with the client, not the carrier.
Then came the perception that agents were captive to carriers, brokers could represent many carriers (even as an agent role).
Now, they mean exactly the same thing. A person with a license on the wall, but it is usually meant in a way that a 'broker' can place your business with a variety of carriers to obtain the best rate, even though they usually act as an agent of the carrier, with fiduciary responsibility to the carrier.
Just figure they are the same thing and ask the person who makes these statements what he really means.
Dan
RFNAPLES
Expert
Please be careful in interpreting and using the advice you receive on this forum. In New York there are separate licenses for agents and brokers. My advice is to talk personally with both experienced captive and independent agents or brokers in New York. Here are the types of licenses available in your state:
- Life Settlement Broker (LSB)
- Excess Line Broker (EX)
- General Consultant (C3)
- Independent Adjusters (IA)
- Life and Accident/Health and Variable Life/Variable Annuity AGENT (LA)
- Life Accident and Health and Variable Annuity BROKER (LB)
- Life Consultant (C1)
- Limited Agent (LR) (Limited Agent License for rental vehicle companies, wireless communications equipment vendors and self-services storage companies)
- Mortgage Guaranty Agents (MG)
- Property and Casualty Agent (PC)
- Property and Casualty Broker (BR)
- Public Adjusters (PA)
- Service Contract Registration Under Section 7907 (SR)
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Thank you so much for breaking this down. I am not sure where this fits but I want to get and manage insurance for business. I guess it would be commercial insurance.
RFNAPLES
Expert
See Laws of New York, ISC-Insurance, Article 21 - (2101 - 2137) AGENTS, BROKERS, ADJUSTERS, CONSULTANTS AND INTERMEDIARIES
Laws of New York
Interesting, so if I understand this correctly, the broker works for the insured, the agent works for the insurance company. This is somewhat the old definition, which makes sense.
It is generally not the public perception though. In this scenerio, the broker is not appointed with the insurance company, but works with an agent (or direct) to place the business that suits the clients needs. As such, a broker doesn't generally have any sort of binding authority.
I'm not sure what the real implementation of this is in New York. Do people still use the term broker when they have an agents license?
To be honest, in California, I have a P&C brokers license and a life/health agent license. This has never made sense to me either, since in general philosophy, I broker life/health, though I'm appointed with carriers so technically I'm an agent. Same is true with P&C. But hey, its what they offer now, after many changes.
Dan
It is generally not the public perception though. In this scenerio, the broker is not appointed with the insurance company, but works with an agent (or direct) to place the business that suits the clients needs. As such, a broker doesn't generally have any sort of binding authority.
I'm not sure what the real implementation of this is in New York. Do people still use the term broker when they have an agents license?
To be honest, in California, I have a P&C brokers license and a life/health agent license. This has never made sense to me either, since in general philosophy, I broker life/health, though I'm appointed with carriers so technically I'm an agent. Same is true with P&C. But hey, its what they offer now, after many changes.
Dan
RFNAPLES
Expert
Due to the various and differing state licensing laws, insurance agent misuse and/or abuse of the terms, lack of enforcement and a generally uniformed public, it is understandable that the terms are often ambiguous. But ignorance of the law is no excuse for failure to obey.
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