Intermediaries in Insurance

Agent: An insurance agent engaged by the insurer is bounded by the rule; 'Qui facit alium, facit perse', which  means, one, who acts through others acts through himself. The contracts and obligations arising due to acts of the agent, is as if the acts and contracts have been done by the insurer. The authority of an agent may be 'expressed' in words spoken or written or 'implied' when things are to be inferred according to the circumstances.There is no consideration involved when becoming an agent. An insurance agent needs to possess the requisite qualification stipulated by the insurance regulatory authority. A firm, company or an individual can continue their agency so long as all partners and directors are of sound mind, and is not involved in a criminal breach of trust, forgery, fraud , dishonesty, misrepresentation or violation of code of conduct. 

Brokers: Brokers canvass insurance business and also negotiate terms if necessary to meet the requirements of the proposer. Brokers have to register themselves with the insurance regulatory authority. Brokers are expected to possess a high standard of professional skill and conduct. They are liable for damages to the insurer.

Both agents and brokers are remunerated by way of commission paid by the insurer. They do not charge the client. 

Banks: Banks as insurance intermediaries have become popular in USA and in European countries like France, Holland, Belgium and Spain and Asian countries like China and India.

Direct business: Direct business through the company's website and online portal has also become predominant.

Dividend, Non - Forfeiture and Settlement Options in Life Insurance Plans

Dividend options in life insurance policies:

• Dividend is paid in the form of cash paid to the policy owner, usually on the anniversary date of the policy.
• Instead of paying cash, dividend can be paid in the form of reduction in premium payable during the next year.
• Dividends are added to form a 'corpus' which accumulated interest and can be withdrawn at any time.
• Dividend amount can be used to purchase additional sum - insured or paid - up amounts.

Non -forfeiture options in life insurance policies:

• In the event that the insured discontinues the current policy, then the policy can be surrendered and cash value equal to the surrender  is paid to the insured.
• The surrender value can be used to purchase another policy with a reduced sum- insured.
• The cash value can used to extend the policy as a limited term policy.

Settlement options in life insurance policies

• The policy benefits payable are retained by the insured, who periodically pays the stipulated interest to the beneficiary.
• The benefits can be paid periodically to the beneficiary in fixed periods.
• The benefits can be periodically paid in lump sum as a fixed amount.

Characteristics of Inland Marine Floater

The inland marine floater policy coverage is specially tailored for specific type of high value and delicate property. This includes jewelry and filigree work, cameras, smart phones, musical instruments and the like. The policy provides an all risk coverage and is provided worldwide. Inland marine floaters are normally underwritten without a deductible too. 

Though inland marine floaters are written on an all risk basis, some common exclusions apply including gradual wear and tear, deterioration and inherent vice. Besides mechanical and electrical failures are beyond the scope of the policy. War and warlike risks and nuclear damage are not covered under the policy.

The inland marine policy provides loss settlement amounts within the sum insured according to the following estimates:

• The actual cash value of loss or damage to insured property
• The amount incurred to repair the property to the condition it was before loss.
• The amount that is incurred to replace the lost or damaged property with a similarly identical one because it cannot be repaired.

A personal articles floater policy is useful to obtain coverage for personal articles as the insured may be unable to obtain coverage under a homeowners coverage policy an also in the event that the property is owned by more than one person who do not live in the same house. Besides, specific classes of unscheduled personal property like property in a self-storage unit can find coverage  under a personal property floater policy. Personal property and luggage worn or carried by tourists and travelers can be covered under the personal effects policy.

Decision Making in the Insurance Industry

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