2007-01-19 02:52:33 · 5 answers · asked by Anonymous in Business & Finance ➔ Insurance
Ok, when you're dealing with a brokerage, they typically have several companies they deal with. The brokerage has contracts with these companies. When a premium is paid, the whole thing goes to the company. The company and the brokerage has an agreement on Commission. The commission is paid to the brokerage and then a percentage of that is usually cut to the actual broker who did the sale. this amount is fixed and agreed upon. Hope this makes sense
2007-01-19 08:10:41 · answer #1 · answered by angel09 2 · 0⤊ 0⤋
It can be either. Sometimes they get paid a commission from the insurance company, but sometimes they charge a "brokers fee" to the insured instead of taking commission from the insurance company.
If the client isn't paying a "brokers fee", they can be pretty sure the broker is getting commission (they don't work for free!) but you can ALWAYS ask your broker how they get paid. That's a fair question!
Most state insurance departments prohibit a broker from charging a brokers fee AND collecting commission from the carrier, and if you do charge a brokers fee, you have to have the insured sign a brokers fee disclosure notice.
2007-01-19 06:40:24 · answer #2 · answered by Anonymous 7 · 0⤊ 0⤋
Rocky, think of it like this. If you are buying a pair of jeans (insurance) You go to a store (Insurance Broker) that has the jeans and may have a variety of styles(types of insurance) from different companies. The store has a sales clerk (insurance agent) that sells you the jeans. The product itself comes from the various companies that manufacture the product (provide the insurance). So ultimately the agent and the broker both work on a commission that comes from the companies that they represent in their place of business. It is all based on percentages (mark-up on the jeans) that are built into the price of the product (insurance). I hope that helps
2007-01-19 03:14:22 · answer #3 · answered by O Wise One 3 · 0⤊ 0⤋
Ultimately, brokers and agents make money because people purchase coverage through them.
But payment of commission happens both ways. Some companies will only pay commission to the broker once they have received payment. Some companies only require the broker to send in the net premium.
2007-01-19 03:11:43 · answer #4 · answered by van_at_lincoln 3 · 0⤊ 0⤋
Yes.
The clients buys the insurance from the company the broker recomends & the company pays him/her. Never make a payment paid to the person.
2007-01-19 02:59:28 · answer #5 · answered by ricks 5 · 0⤊ 1⤋