What is an Insurance Agent?

An insurance agent, also called an insurance broker in some instances, is the local representative of any number of insurance companies. A legitimate insurance agency must be licensed by a state board before he or she can legally sell insurance policies to customers. Generally, an insurance agent works as the local 'face' of a single insurance company, but occasionally an independent agent may work with different companies depending on their areas of expertise and coverage. Most consumers interested in purchasing insurance coverage will only deal with a local insurance agent directly. He or she is authorized to present all of the coverage options available through the larger insurance company. Since part of an insurance agent's salary is based on commissioned sales, he or she will often offer 'one stop shopping' for all of the customer's insurance needs. An insurance agent may sell individual policies for car, home, life and medical insurance, or offer a package plan which incorporates ... more

6/03 The idea of suitability is new to the insurance industry. Suitability is a security regulation concept driven by the know your customer tenet of SEC rules in which the representative needs to show that a financial product is suitable for the client. The insurance business uses the principle of market conduct whereby as long as the producer doesnt break the specified rules the conduct is okay; these rules are often strictly defined. The insurance regulatory mode of governing agent market conduct worked quite well as long as insurance agents were simply selling insurance, and were perceived by the public as sources of insurance. Just as a consumer wouldnt go to their grocer to get a haircut, they didnt go to an insurance agent for investments. And just as there is a limit to the needs a grocer can provide for, there was a limit to the number of financial problems an insurance agent could solve with insurance products. If a consumer wanted something other than insurance the consumer ... more

An agent is either a direct representative of one insurance company, or an independent seller of health plans. Independent agents can be licensed to sell plans from several different companies. ... more