- Agent – Meaning and Definition
- Insurance Agent / Agent – Meaning and Definition
- Types of Insurance Agent
- Life Insurance Agent Qualifications
- Functions of insurance agent
- Prohibited acts of insurance agent
- Rights of Insurance Agent
- Duties of Insurance Agent
- Insurance Agent Functions
- Forms related to the functions of an insurance agent
- Pre-requirements for a successful insurance agent
- Qualities of Insurance Agent,
The assessment of the success of the insurance business of an insurer (company) depends on the fact that how is the popularity and credibility of the insurance company in the society? In such a situation, an intermediary is needed to establish a relationship between the insurer and the insured. The person who performs the function of an intermediary is called an insurance agent.
Insurance agent/agent and general agent have different meanings. Generally, an agent is a person who assists in establishing a contractual relationship with a third party, but an insurance agent does not have the explicit authority to establish a contractual relationship with a third party on behalf of the employer (insurer).
The Indian Contract Act, 1872 defines an agent as a person engaged to act on behalf of another or to represent dealings with other persons. According to Spicer and Pageler, “An agent is a person who has an express authority to represent or act on behalf of the employer with the aim of establishing a legal relationship with the third party from the employer.”
Therefore, it is clear that an agent is a person who represents another person in business dealings. Any person who is qualified to enter into a contract. That is, he is an adult, is of sound mind, can appoint an agent for his work. Similarly, any person can be an agent who has the capacity to enter into a contract.
According to the High Court of India, there is a difference between an agent and a servant – the agent’s remuneration is in the form of commission or fee, while the servant’s remuneration is in the form of salary. An agent can never be a servant, while a servant can be an agent at times. The agent enters into a contractual relationship with a third party on behalf of the employer, but the servant does not.
An insurance agent is that important medium, contact point through which the relationship between the insured and the insurer is established. These are the workers of insurance companies who search for lives, encourage them to be insured, prepare them and take them to the corporation, and provide insurance services. Without an insurance agent, the work of the insurance companies comes to a standstill.
In a general sense, an insurance agent is a representative licensed by the insurer who agrees to perform the work originally connected with the continuance, renewal or revival of the business of insurance in exchange for commission or other revival remuneration.
According to the Insurance Agents Regulation, 2000, “An insurance agent is an insurance agent who has been licensed under section 42 of the Insurance Act, 1938, and is engaged in the business of inducing insurance or insurance business in consideration of commission or other remuneration.” Works to obtain, which also includes carrying on business related to the continuation, renewal of insurance.”
Characteristics of an insurance agent –
- The insurer (the insurance company) is its employer (the owner).
- The insurance agent obtains a license under the rules made under section 42 of the Insurance Act.
- Insurance agent tries to get insurance business.
- Consideration is paid to the insurance agent.
- According to the new rules, the insurance agent can be an individual, firm, company or banking company.
- The insurance agent cannot pay any remuneration or commission to any other person for carrying on the business. Doing this is an illegal act.
Following are some types of insurance agent –
- Direct Agent – who is directly associated with the corporation.
- Part-time Agents – Those who perform the work of the agency in a part-time form, that is, they also work elsewhere.
- Whole Time Agents – The agents who spend all their time in getting the life insurance business are called full time agents.
- Agents working under Development Officer – Such agents who work under the direction and control of the Development Officer and who report to the Development Officer, the Development Officer looks after such agents.
- Involved Agent – An agent who is treated as an agent by the insurance company is called an agent involved. It is considered as a legally appointed agent like a normal officer.
- Urban Career Agent – This scheme is for cities. Under this scheme, such youths, who are between 22-30 years of age, who are in higher secondary first class or graduate, are appointed career agents. These agents are paid a stipend by the corporation for three years. After three years these agents attain full agent status. This scheme was started by the corporation in 1972.
- Rural Career Agent – Under self-employment, such youth who are at least 10th passed and are between 21 to 35 years of age and who are appointed in such places where the population is less than 5000, they are called rural career agents. Huh . This scheme was started in the Life Insurance Corporation in 1979.
According to the Insurance Act and the Insurance Agents Regulations, 2000, the person applying for the license of an insurance agent should have the following qualifications –
- He should be a citizen of India.
- Applicant must be at least 18 years of age i.e. an adult.
- He should be of healthy mind.
- He has not been found guilty by any competent court of embezzlement, fraud, forgery, abetment of offense or of any such offense punishable, but if an offender has completed five years from the completion of the sentence of any such offence, he shall be in this category. does not come
- He should not have violated the code of conduct prescribed by the Insurance Authority.
- He should have “certificate of insurance salesmanship” granted by an institution recognized by the Insurance Authority.
- He must have passed class 12th or its equivalent from a recognized Board or educational institution for appointment to a place having a population of one lakh or more. But for appointment to any other place, it will be sufficient to pass the 10th examination of a recognized board or educational institution.
An insurance agent has to perform all those tasks which have been assigned to him by his employer (insurer), yet his important functions are as follows –
- Every agent has to get the insurance business of the amount fixed by the corporation and the insurance that he is insured. He has done it in the past and tries to continue them continuously.
- To give information about all the plans and facilities related to insurance to the proposer i.e. the insurer and to get complete information about the insured.
- An insurance agent should not interfere in the offers of insurance brought by another insurance agent and should not try to entice the proposer.
- The agent also does the work of selecting and determining which plan will be suitable for which proposer.
- To inform the corporation or the insurer about the factors (risk related) which increase the risk of the insured and which may at times cause loss to the corporation.
- The agent advises several proposers regarding the enrollment, handing or renewal of a letter of insurance.
- In case of delay in depositing the premium by the insured or being indifferent to the insurance policy, the agent encourages him to pay the premium.
- Informing the prospective customers (proposers) about the products of your insurer.
- To assist the insured or his heirs in obtaining payment of insurance claims.
- To take all measures so that the insured reaches the insured within 45 days.
- To comply with the things/instructions notified by the Insurance Authority.
- To execute the development works/programmers of the Corporation.
An insurance agent does not have the right to do the following –
- To recover money of any kind for the insurer (or corporation).
- Cannot print any kind of advertisement or magazine without the expectation of the Corporation. And neither can the bot.
- To provide commission or discount for insurance.
- Acceptance of any risk on the part of the insurer.
- Going into the territory of any other insurer and taking any action which is outside its scope.
- He cannot do any work without a valid license obtained by the Corporation and outside its limits.
Generally an insurance agent has the following rights –
- Procurement of insurance business – Every insurance agent has the right to make all efforts to obtain insurance business, which are within statutory limits. But he cannot get insurance business from any person by giving financial inducement or commission.
- Receiving commission and remuneration – Every agent is entitled to receive a fixed commission or remuneration for the services rendered by the Corporation.
- Termination of the agency – Any agent can discontinue his work after one month by giving one month’s notice to the appropriate officer.
- Obtaining necessary insurance material – The insurance agent can obtain various printed forms related to the insurance business from the branch office. For this he does not need to pay any kind of fee.
- To get club facilities – Jeevan Seema Nigam of India has formed agents’ clubs at four levels. There is a minimum limit of insurance business for membership of each level of club. The person who has done business of the minimum limit of the club, he has the right to become a member of that club. On being a member, he will be entitled to get all the facilities prescribed for that club.
- Appeal – Every insurance agent can appeal for the unlawful termination of his agency.
- Right to renewal of license – According to section 42 of the Insurance Act, 1938, every insurance agent has the right to get his license renewed. The insurance agent has to apply for such renewal at least 30 days before the expiry of the license along with the prescribed fee.
- Right to get free family security – If a permanent agent dies before the age of 60 years, then under Table VI of the Agent Regulations, Term Insurance for an amount ranging from Rs.3000 to Rs.10,000 is provided free of cost. –
- He should have been appointed before the age of 50 years.
- He should have completed at least 3 years service.
- At the time of death who has at least Rs.5000. has an insurance policy.
- Right to cover loss – Every insurance agent has the right to get the corporation to be compensated for the losses arising out of lawful acts done in the course of the agency.
- Other Rights –
- To get loan for purchase of vehicle housing.
- Receive bouchty benefit.
- To take refuge in the court to protect one’s officer.
- To obtain minimum insurance business to maintain the agency.
- Submission of proper accounts on demand by the Corporation as per section 213.
- To carry on business in the name of the Corporation.
- To assist with claim payments.
- To receive training from time to time.
- To act according to law and rules.
- To get complete and detailed information about the proposer.
- To apprise the corporation of insurance related risks.
- To keep in touch with the insured lives and to give them advice from time to time.
- To find new proposers, to retain the old ones and to be ready/effort to revive the expired policies.
The functions of an insurance agent are wide. Although he is a salesperson, his way of working is different and wider than that of a normal salesperson. He has to find the insured i.e. the proposer (potential customer), get him insured by contacting him and get the claims paid to his nominees after the end of the insurance period or the death of the insured, etc. His Vikram art is both creative and competitive. At present, while ICICI, Birla and other private companies have also entered the field of insurance business, the work of the agent has increased comparatively. Some aspects of its functioning are as follows –
- From contact tracing to issuance of insurance –
- Contact with Proposers – For this work the insurance agent has to search for his potential customer i.e. proposer. Such persons can be of both types who have got insurance in the past or have not got it done. For this the agent has to move from place to place. The agent has to contact the proposer frequently according to their convenience, inform them about the facilities, rules, formalities of various schemes and remove the doubts coming in the mind of the customer and make them respect or mind about the plans.
- Encouraging the proposers – The agent has to understand the psychology of the proposer and try to know what the insurer wants from the insurer, such as investment, security, loan, future (old age security), pension etc. Recognizes and encourages the priority of the proposer. For this he may also have to meet the proposer several times. The agent should give enough time to the proposer to think. At the same time, the agent should take special care when motivating people who are sick or incontinent or corrupt conduct. The insurer does not accept all the offers of insurance brought by the agent, so the agent should encourage only those people to be insured who can normally be insured.
- Filling the offer form – After discussing the insurance plan, sum insured and other aspects, the agent gives the proposal form (prescribed printed form) to the proposer. This form is to be filled by the proposer but the agent can assist the proposer in filling the form. Sometimes the agent acts on behalf of the proposer, in such a situation the agent should clarify all the things again to the proposer. Only then get it signed.
- To get the necessary forms prepared – Along with the offer letter, the proof of age of the proposer and the medical certificate should be prepared and attached. Authorized doctor from the corporation is arranged by the agent itself.
- Examining the proposer and giving his confidential report – The agent, after obtaining the offer letter and other necessary certificates from the proposer, examines them thoroughly and prepares his report. The report also requires the agent to describe the nature of the risk (eg, normal, low level or high level). The agent also takes into account the proposer’s age, physical health, build, habits, family history, occupation, work environment while assessing the risk.
- Submission of offer letter after receiving premium – If the agent is convinced that the offer form has been filled completely and correctly, then he receives the first premium amount (cash / cheque) from the proposer and submits it along with the offer letter to the branch office. .
- If there is a deficiency made by the branch office, it should be filled – if the new business department of the branch office (New Business Deptt.) tells the deficiency or error in the offer letter, then the agent should get that deficiency filled by the proposer.
- Issue of Insured – Risk starts with the deposit of premium. The receipt of premium is sent by the office to the insured. After this the office sends the letter of insurance to the insured by registered post.
- Authentication of age to payment of claim –
- Authentication of age – In practice, if the age certificate is not available with the insurer at the time of filling the offer form, the agent helps in verification of age at a later stage (after issuance of the insured). Is . There is no difficulty at the time of claim by getting the age certified in advance.
- Nomination or handing of insured – In order to avoid difficulties in payment of insurance claim on the death of the insured, the insurance agent should suggest to the insured (proposer) the name of the proposer or the signatory at the time of filling the offer letter itself. . But if they do not do so, then later the insurance agent should help them in this process. After the death of the insured, it is the insurance agent who has to assist in paying the claim to the heirs.
- Enforcement of Expired Insured Certificates – In some circumstances, if the insured does not deposit the premium for a long time, the policy becomes lapsed. It is the duty of the agent to help the insured in getting this lapsed insured certificate to be revived, by filling up the necessary forms.
- To get loan and surrender value – If the insured wants to take loan against the insured, then the agent helps in getting the loan of the insured. Also, if the insured’s financial condition is not good, he does not want to continue with the insured by paying the insurance premium, then the agent should take action to get him the surrender value by suggesting the surrender of the insured.
- Change of Insured – Sometimes the insured wants to make changes in his insured, for this it is also the duty of the agent to explain the change related things clearly to the insured.
- Loss or destruction of insurance papers – If the insured’s insured is lost or destroyed, then the agent should immediately initiate necessary action to get her second husband and help the insured to get the second copy.
- Assisting in payment of claim – Helping in payment of claim by visiting the Corporation office with the insured on completion of the insurance period and in case of death of the insured. If so, the agent goes to the office with that successor or nominee to get the necessary action done and helps him in the payment of the claim.
There are many forms related to insurance agent. The main types of forms are as follows –
- Insurance Proposal Form – is a certified insurance proposal form filled by a potential insured applying to an insurance company to insure himself or any other person for his property
- Insurance Agent’s Report Form – The insurance agent has to submit his report along with each proposal form of insurance and submit the report in a prescribed form (Form No. 380-81). In this report, the insurance agent basically mentions the ethical aspects of the proposal in addition to the general aspects. Therefore, this agent’s report is also called Moral Hazards Report.
- Cover Note or Preliminary Insured – A document that is issued before the issue of an insured. Normally, when the entire process of insurance is completed and the insurance premium has been deposited by the proposer, he is issued a temporary insured or cover letter or initial letter of insurance. Till the time the insured is not ready, only the temporary insured is considered as the proof of Bina.
- Insured – A letter of insurance is a document that creates a contractual relationship between the insurer and the insured. It is signed by the insurer only.
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The following pre-requisites are necessary to become a successful agent –
- Before starting the business, the agent should have effective training. The agent will have to undergo training for at least four weeks before taking the “Insurance Salesman Certificate Examination”. At least four weeks of training will have to be received.
- To keep related reports, forms and sales material with you before going to contact the prospective insurers.
- Setting the goal of your business for a certain period and sub-division of that goal and the weekly target should be fixed.
- Connecting with prospective customers, utilizing time in a planned manner.
The success of an insurance agent depends on the following –
- He must have basic knowledge of insurance.
- He should have an impressive personality that leaves an impact on the potential insured.
- Ability to study and analyze the market.
- Ability to deal with the objections of the insured in a rational and efficient manner.
- Ability to develop personal relationships with his clients.
- Hardworking and efficient employer.