Difference Between An Independent Agent and Broker?

[yellowbirdnj]

Your description is not a Broker role, but that as a Consultant.....

Solicitor, Agent, and Broker all involve an application for insurance being taken by you...... A solicitor and agent has an agreement in place with a carrier or agency to take the application....

The Broker is taking an application that is not represented or contracted with an insurance company or by an agent/agency. This is what a Broker is... a non representative party that is taking an application on behalf of the Client without a company agreement. This is Brokerage and only a few States allow this. Most States Ban this practice.

If you call yourself a Broker for marketing purposes because you want to pull an illusion that you represent the client....Well....That has already been discussed in this Thread.

Now some States require Agents (that act as a consultant) to register and license as a consultant if they charge a fee.

The NAIC Insurance Producer model only leveled the playing field for the States and NIPR licensing. This has nothing to do with company representation and contracts.

The point is What is the difference between a Broker and an Agent. It is all about company representation and compensation.

Sorry but the way that you are describing broker is old school, and maybe the way its still done in your state. In NJ and PA, you must be appointed before you can transact business. There is no broker license. This means to be a broker, you must already be appointed. What state do you operate in?

 

[TwiLight]

Sorry but the way that you are describing broker is old school, and maybe the way its still done in your state. In NJ and PA, you must be appointed before you can transact business. There is no broker license. This means to be a broker, you must already be appointed. What state do you operate in?

Its not old school if you are repeating what I have already said.....

Contracting/Appointing is one in the same my young friend.

Also, as I said the practice of Brokerage is Banned by most States....Including NJ, PA, etc.

Calling yourself a Broker is a twist on words and only that. It has nothing to do with whether or not you represent a client or company. In NJ and PA, it is ILLEGAL to say you represent a client..... That practice is BROKERAGE and is not allowed in your States. You must have a contract/appointed....

Thus, you keep proving my point by repeating what I already have said.

 

[pfg1]

I see where both of you guys are going. Its like when I was in the mortgage business... I was a broker (had many, many companies and products I could choose from) vs. being a lender (could only use the products from the company I was employed by). By being a broker, I could find the best product to fit my clients situation.... not be forced to only give them an option within what we had in-house. (Not saying one was always better - just that they are different)

That's the way I (in my mind) visualize the difference in broker and agent in insurance. A broker is an independent that can contract with many carriers, to select the best product to fit the clients needs. An agent is captive and has to offer options that are available from the company they work for. Again, not saying one is better or worse, just that they are different.

Now how does all the legal-ease shake out regarding the use of the term broker? I don't know... but I consider myself to be in the broker camp, since I'm an independent and can write pretty much whoever I want (if I contract with them). I don't call myself a broker though, heck I'm not sure what I actually call myself. LOL

 

[yellowbirdnj]

I see where both of you guys are going. Its like when I was in the mortgage business... I was a broker (had many, many companies and products I could choose from) vs. being a lender (could only use the products from the company I was employed by). By being a broker, I could find the best product to fit my clients situation.... not be forced to only give them an option within what we had in-house. (Not saying one was always better - just that they are different)

That's the way I (in my mind) visualize the difference in broker and agent in insurance. A broker is an independent that can contract with many carriers, to select the best product to fit the clients needs. An agent is captive and has to offer options that are available from the company they work for. Again, not saying one is better or worse, just that they are different.

Now how does all the legal-ease shake out regarding the use of the term broker? I don't know... but I consider myself to be in the broker camp, since I'm an independent and can write pretty much whoever I want (if I contract with them). I don't call myself a broker though, heck I'm not sure what I actually call myself. LOL

I agree. My take is that calling yourself a broker doesnt chime in with the consumer who generally doesnt care. So if you are harping about how great you are representing all of these companies then you are doing it for yourself, your own ego and or your own perspective. If everyone saw the advantages of having a broker come over then companies like MetLife, Prudential and John Hancock would all be out of business.