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Have you questions about a particular subject?
We put the most frequently asked questions about each topic individually.
If it doesn't get cleared contact us by email: firstname.lastname@example.org.
Are there Insurance Brokers who can enter into insurance contracts in the name and on behalf of insurers?
Yes. Under the law, it is possible to establish agreements between insurers and Intermediaries. So that, Brokers can conclude contracts in the name and on behalf of these, provided that the inherent professional liability of the Broker/Agent is guaranteed through adequate Insurance Policy. The contract, thus concluded, shall be deemed to have been concluded directly with the Insurer.
Can I mandate a Broker to handle all my insurances?
Yes. By agreement, the Policyholder can mandate the Broker to deal with all matters relating to the contracts that he or she may hold, namely negotiating with the Insurers, collecting all types of information needed regarding Policyholders' insurance contracts, risks, coverage, conditions, fees, etc..
Can I replace a Broker or an Agent in a contract already concluded?
Yes. The law allows the Policyholder to substitute them, provided that it does so at least 60 days prior to the renewal date or anniversary date of the contract, through a written communication sent to the Insurer, who should inform the replaced Broker/Agent.
Can I appoint a Broker for an insurance already entered into?
Yes. The law provides the Policyholder with the possibility of appointing a Broker, provided that it does so at least 30 days prior to the renewal date or anniversary date of the contract, through a written communication sent to the Insurer.
Can an insurer refuse to accept my insurance proposed by a Broker/Agent?
Yes. Insurers may refuse to cooperate with an insurance intermediary or refuse to accept certain insurance proposed by any Broker/Agent, as long as they are in the beginning of a contractual relationship with respect to that insurance, since if they wish to do so during the validity of an insurance previously concluded and already accepted, can only refuse it when there are reasons that can be met under the law.
Will I worry about anything when I contract insurance through a Broker/Agent?
It should take into consideration whether the advice and assistance provided by the intermediary is given by a professional who makes the insurance full-time activity; whether the same advice and assistance are suggested independently of any other reasons and reasons other than yours and, lastly, whether or not the Broker/Agent is covered by Professional Liability Insurance that guarantees the payment of compensation in case of negligence or violation of the duty of care legally imposed.
Are Brokers obliged to have specialized technicians?
Yes. Brokers, and only them, are required to have at their service risk analysis and actuarial technicians, when more than 20% of their activity is related to Non-Life and Life contracts, respectively.
What guarantees me that there is someone who understands insurance in the case of a Broker who assume the nature of Company?
This guarantee is conferred by law, as the Supervisor, does not authorize the formation of any insurance Broker company without, at least, one of its managers or administrators being registered as an Agent in in relation to the activity that the Company intends to exercise, whether in the sphere of Life or in the Non-Life business.
Can I hire all insurance through any Broker/Agent?
No. If the insurance to be contracted is part of the so-called Life branch, the Broker/Agent must be authorized by the Supervisor to carry out its activity in the Life sector. On the other hand, if the insurance to be contracted is part of the Non-Life business, it is necessary that the Intermediary is authorized to practice in the Non-Life business. It is that, there are training and examinations for the Brokers/Agents specially destined to each one of the branches.
A Broker/Agent may be able to carry out the activity only in the Life branch, in the Non-Life business only, or in both branches, depending on their training and the authorization granted by the Supervisor through the use of the examination to which they are submitted.
What is the essence of the work done by the Broker?
The essence of the service provided by the Broker is not exhausted by market research, the study, analysis and circumscription of the range of insurance that may be appropriate to the clients needs and advice on which of these to hire, an area where independence in advising is of particular importance and relevance. Above all, the purpose of the activity carried out by the Broker is to assist and advise the contract as long as it remains - as it happens on a changing reality - with the consumer and the Insurer, informing, clarifying and proposing changes whenever necessary, according to the evaluation of the risks involved, and in particular in the follow-up to the Policyholder and the Insurer when an accident occurs.
Do all Agents have capacity to collect premiums?
No. In order an Agent be entitled to collect premiums on behalf of the Insurer, it is necessary that the Insurer has previously assigned such powers.
Usually Brokers have such capacity and, in this case, they are obliged to have a Bond Insurance that guarantee the payments to the insurers.
How can I be sure that the Broker/Agent has the power to collect premiums on behalf of the Insurer?
You can make sure easily. Brokers/Agents with capacity of collection have in their possession the corresponding receipts issued by the Insurer. If they do not have it, they do not have that capacity. When paying the insurance premium, the Broker/Agent must deliver the respective receipt proving the payment.
If the Broker/Agent does not pay the premium to the insurer, can I be at risk?
No. As long as the Broker/Agent, to whom the insurance premium is paid, has the power, on behalf of the Insurer, to receive the premium. The Policyholder is protected in all circumstances, even if for any reason the premium not be delivered to the insurer. If for any reason, the Broker/Agent fails to deliver the premium to the Insurer, the insurance is valid and the risk is covered. The Insurer who has granted the Intermediary the collection of the premiums can not invoke the termination of the contract for lack of payment of the premium.
Is the purchase of insurance through the broker more expensive?
No. Although the Broker is remunerated through commissions resulting from the contracts in which he acts as an intermediary, this remuneration is included in the value of the premium that insurers would charge, whether the Broker existed in the contract or did not exist. Thus, for the same insurance price, the Policyholder, in addition to transferring a risk to the Insurer, also benefits from the service rendered by professionals specialized in the insurance market.
Is insurance intermediation a regulated activity?
Yes. The law establishes the regime for access, exercise and supervision of the activity of insurance intermediaries, classifying them, prescribing the requirements of access to brokerage, agency and fundraising activities, and stating the penalties that may be imposed for violating their legal and contractual obligations.
Are insurance intermediaries subject to supervision?
Yes. As entities authorized by the Supervisor to exercise their activity, the Brokers or Agents are under their supervision. In the exercise of their activity, these operators may be subject to administrative offense proceedings promoted by the Supervisor in case of violation of legal or contractual obligations.
What are the legal obligations of insurance intermediaries?
Regardless of their category (Brokers or Agents), all insurance intermediaries are generally subject to the obligations established by the law.
They constitute obligations of any insurance intermediary: Present to the Policyholder, through a correct and detailed description of the product, the contract modality that best suits its specific case; Provide assistance to the contract; Inform the Insurer of the risks to be covered and their particularities; Inform the Insurer of the changes in the risks already covered that are known and that may influence the conditions of the contract; Comply with the legal provisions and, specifically, the regulatory norms of the insurance business; Do not assume risk coverage on your own behalf; Collect or return, under the established legal or regulatory terms, the receipts that are delivered to them; Report to insurers, in accordance with established legal or regulatory terms; Inform the Insurer of all the facts of which it has knowledge and which may influence the settlement of a claim; To maintain professional secrecy, in relation to third parties, of the facts of which it becomes aware through the exercise of their activities.
Has Brokers some more legal obligations?
Yes. In view of their legal condiction and structure to which the law obliges them to own, brokers, in addition to the obligations generally imposed to all intermediaries referred to in the previous answer, are still subject to suggest to the Policyholder prevention measures adequate to the reduction of risk; Inform the Policyholder of the rules inherent to the insurance business, in particular as regards their rights and duties; Ensure correct compliance with the legal and regulatory provisions of the insurance business, and does not intervene in the execution of contracts that violate such regulations; Provide insurers with all the elements necessary for a proper risk analysis and rate determination, as well as, providing the industrial risk descriptive notes, being responsible for any omission or inaccuracy in the data provided leading to an erroneous risk assessment; Provide insurers with an indication of the existence or lack of means of prevention and safety that they detect through risk analysis; Obtain, when requested by the insurers, the information necessary for the investigation of claims procedures; Collaborate with the surveyors appointed by the insurers in obtaining the final settlement of claims when requested by the insurers; Provide all assistance to insurance agents who work through them, so as to enable them to perform their duties fully; Have a Professional Liability Insurance; Provide the Supervisor with all the information it needs.
Can I hold the Broker/Agent responsible for damages resulting from his professional conduct?
Yes. Provided that the alleged facts, including those based on breach of its legal and contractual obligations, are attributable to it, there is a causal link between the conduct causing the damage and the damage itself, and the facts are reflected in the contract in which it intervened , determining changes in their effects as intended by the expressed will of the contractors, the Broker/Agent shall be liable, civil and criminal, if this is the case.
It is dangerous to pay the insurance premium to the Broker/Agent?
No. Since the Insurer has given to it the power to collect premiums, the payment made to the Broker/Agent releases the Policyholder from the obligation to pay the premium. The law establishes, in this case, that the payment is considered to be made directly to the Insurer.
Is there any way to guard against the risks of an intermediary neglect?
Yes. The most diligent way of guarding against the risks inherent in having your insurance brokered by a Intermediary is to require him to present a Certificate of Professional Liability Insurance. This insurance is specifically intended to cover and to pay for damages that are legally attributable to the Broker/Agent in the exercise of his activity, for damages and losses caused by negligence.
Are all Intermediaries required to own Professional Liability Insurance?
No. Although it was advisable at all, the truth is that the law only requires insurance Brokers to hold professional indemnity insurance. In addition to the brokers, the law also requires the contracting of this insurance by those agents who are authorized by the insurers, by agreement to this effect, to conclude contracts in the name and on behalf of them.
What guarantees the independence of the advising provided by the Intermediary?
According with the law, the independence of the advising provided by the Intermediary is only required if it is a Broker. Broker is, by legal definition, the intermediary that establishes the connection between the policyholders and the insurers, being that these last are chosen free of any kind of constraints, taking care primarily for the interests of the policyholders. For this reason, the law requires brokers, in order to maintain their authorization, that their insurance portfolios have a certain nature, in terms of insured persons and risks with a predominance of industrial risk coverage and that it is dispersed by several insurers, so that their market research is not clouded for reasons other than those resulting from the will and interest of policyholders.
What's the difference between a Broker and an Agent?
Although all are considered by the law as insurance intermediaries, there are substantial differences between each of these operators. Broker is the maximum category that any insurance intermediary can ascend, which is obtained only through the longevity imposed in the exercise of the profession, as well as, the fulfillment of strict legal criteria, namely because it is required to have a technical, commercial and administrative organization, as well as adequate economic and financial structure, which are not legally required of agents. The Broker is also obliged by law to be independent in the exercise of its activity, and this independence is measured by the so-called "insurance portfolio dispersion” rules, which forces it to work with many insurers. Thus, the Broker is considered as the intermediary who defends in the first line for the interests of the insureds. The agents are not required by law to be independent, nor to have their own technical, commercial and administrative organization, as well as, an appropriate economic and financial structure, they may be regarded as operators who do not be concerned with the interests of the policyholders, as a matter of priority.
Can I hire an intermediary to carry out studies or advise on my insurance, particularly on industrial risks?
Yes, as long as it is an insurance Broker. Brokers are the only ones who can perform insurance advisory duties with policyholders, as well as conducting studies or issuing technical advice on insurance. In the exercise of these functions, which many call "risk management", the Broker can receive and be remunerated through fees (not commissions).
Usually Brokers have such capacity and, in this case, they are obliged to have a Bond Insurance that guarantee the payments to the insurers.