FAQ
Who Is An Insurance Broker ?
Persons who, acting with complete freedom as to their choice of undertaking, bring together, with a view to the insurance or reinsurance of risks, persons seeking insurance or reinsurance and insurance and reinsurance undertakings, carry out work preparatory to the conclusion of contracts of insurance or reinsurance and, where appropriate, assist in the administration and performance of such contracts, in particular in the event of a claim.
Difference Between A Broker And An Agent Of An Insurance
Broker
- Professional Corporate entity
- Represents client to the insurer.
- Represents all registered insurers.
- Actively governed by act of parliament.
- Professional and experts in the industry.
Agent
- Individual entity
- Attached to a single insurer
- Represents insurer to the client
- Non formal regulation
- Marketing conduit to the insurer
Key Functions Of The Broker
Understand the client’s business and its risk and insurance needs
Design the most appropriate insurance cover, explaining the options and the reasons for their advice
Execute the client’s instructions in an efficient manner including the arrangement of insurance, and negotiation with the insurance market
Take instructions from their clients
Understand the client’s business and its risk and insurance needs
Design the most appropriate insurance cover, explaining the options and the reasons for their advice
Execute the client’s instructions in an efficient manner including the arrangement of insurance, and negotiation with the insurance market
Take instructions from their clients
Place business with all registered insurers operating in Sri Lanka
Explain the needs of and the behavior of the market to clients
Maintain effective relationships with the market – local and international
Assist in the negotiation of claims
Provide continuous service and advice
Tasks And Responsibilities
- Obtain a detailed knowledge of the client’s business and philosophy regarding risk
- Maintaining clear records of the client’s business history so that it can be explained to insurers
- Explaining the information insurers need to enable them to underwrite a given risk
- Provision of technical insurance advice and advice on developments in the insurance market
- Co-ordinate global programmes
- Maintain records, documents, handle renewals, placement of new business etc
- Take instructions from their clients
- Explaining the law as it relates to the client’s risks and insurance programme
- Maintaining a detailed knowledge of available markets
- Selection and recommendation of an insurer or group of insurers
- Advising the client on the most appropriate insurance programme
- Presenting the client’s risk to the insurance market
- Negotiating with insures on the client’s behalf
- Acting promptly on instructions from a client and providing written acknowledgement and progress reports
- Providing the client with a written record of the insurance programme
- Checking and issuing policies
- Collecting and remitting premiums
- Providing additional Services, such as risk management and uninsured loss recoveries
- Assisting in the negotiation of claims
- Maintaining precise records of past claims and maintaining historic records of policies, underwriting submission and other key documents
Insurance Brokers In
Sri Lanka
- Brokers governed by an act of parliament.
- Regulation of Insurance Industry Act No. 43 of 2000.
- Regulated by the Insurance Board of Sri Lanka.
- Brokers has to be a corporate entity with a minimum issued share capital of Rs. 2.5 M.
- Must carry professional Indemnity with 2 insurers totaling to Rs. 10 M.
- Quarterly returns to IBSL plus monitoring of annual financial performance.
- Must have qualified and experienced personnel, determined by IBSL.
- Currently 57 Insurance brokers who control approximately 23% of the general insurance segment in the market.
Brokers Income
Remunerated by the insurer
Clients do not pay any fees
Current insurance legislation does not legally permit sharing of commission with the client
Administrative expenses incurred by the client could be reimbursed on an agreed basis
