REGULATIONS OF INSURANCE BUSINESS
TOPIC: BROKERS – FUCTIONS AND TYPES
BROKERS
Brokers are a specialist in risk management and insurance. They act on behalf on the clients
and provide necessary information to them about the policies, sometimes the broker will act
as agent of the insurer. The broker helps you identify business risk and helps you to make
decisions regarding on what to insure and how to manage those risks. Brokers are aware of
the terms and conditions and also about a wide range of insurance policies, so they can help
you find the appropriate cover for your circumstances.
WORLD SCENARIO
Insurance came into existence about 12 decades back. The scope of brokers has
expanded as years passed by. The broker concept is well established in Western markets of all
commercial insurance business is done through brokers and not directly between insurer and
clients.
INDIAN SCENARIO
The IRDAI brought out its first regulations about brokers on October 2002. Brokers has a lot
of difference from other insurance service provider in several ways:
•Unlike an Agent, who represents a specific Insurer only
•A Broker represent the client and not the insurer
•For competitive quotes he can approach all insurers
•A Bancassurance outfit is normally an Agent and not a broker
•A Third-Party Administrator (TPA; sometimes confused with a Broker) is a service
provider for Insurance companies, providing services related to health insurance only.
3 TYPES OF INSURANCE BROKERS
