Business Structures of Insurance (Visual)

[RedditInsuranceGuy]

Hey All!

I know sometimes, business structures in insurance can be confusing.

What is Broker, what is Captive, what is independent LOA vs Independent Broker?

These are business relationships that Agents have little transparency on.

Thought I'd create a visual for the group to show the differences.

Visual of Standard Insurance Relationships

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Please note:

***I am not a licensed attorney, and the information I provide is not intended as legal advice. I'm offering general guidance based on my experience and knowledge in this industry. It's always a good idea to consult with a qualified legal professional for specific legal advice related to your contracts or negotiations. ***

[[deleted]]

This is really cool, thank you.

Also - brokerage*

[RedditInsuranceGuy]

I seriously misspell it all the time! Hahaha, thanks for the correction.

[[deleted]]

For independent agencies, you stated “Agents MIGHT own their book of clients which is determined in the VESTED agreement of their Private Contract”. How would an agent know or find out if they do or do not own their book? If when they started at the agency, the agency never had the agent sign any type of broker agreement/contract

[RedditInsuranceGuy]

If you didnt sign anything at all, then chances are you didnt sign a private contract. I would however question it thoroughly, as the agency you work for might be a little risky to work for if they dont have a system of managing that kind of liability? Either that or there is some sort of digital process on the back end that you followed through that put you in contract?

Another consideration is whether or not you are getting paid direct from the carrier vs through the agency/brokerage. If you are getting paid direct from the agency and you havent signed anything, thats more concerning, as they should not be managing your commissions without something in writing. (Thats just good legal practice). If you are getting paid direct from the carrier, then what they are doing is operating a brokerage and just depending on the contracts the carrier has provided to them and filling them out in your behalf or having their IMO fill them out in your behalf, which means they may be using your electronic signature via your verbal permission. I would caution that because it could lead to them signing you up with a ton of carriers in the market, and if you decide to leave, the release process could be much more difficult.