An independent agent is a professional in the insurance industry who represents multiple insurance companies. Unlike captive agents who only represent one insurance company, independent agents can offer their clients a wider range of products and policies. This freedom allows independent agents to provide their clients with policies that better suit their needs by comparing different options from their portfolio of associated insurers.
Key Responsibilities
Selling Insurance Policies: Independent agents sell policies from several companies which enhances their ability to tailor solutions to individual client needs.
Servicing of Policies: Provides ongoing service and support to ensure policies meet the long-term needs of their clients commitments, and accurately cover any claims as needed.
Policy Ownership: These agents typically own the records of the policies they sell, affording them more autonomy over their business operations.
Advisory Services: They offer expert advice based on comparing various insurance options from the multiple companies they represent.
Independent agents operate under the American Agency System, a structure allowing them considerable flexibility and business independence while requiring responsibility for maintaining client relations, records, and compliance with industry standards.
Regulatory Context
Independent agents in the United States must adhere to both federal and state insurance regulations. They are often required to hold a professional license according to the guidelines of the National Association of Insurance Commissioners (NAIC) and local insurance department regulations of their respective states.
Independent agents should perform with high ethical standards as dictated by state laws, ensuring the fidelity and advisance cater uniquely to the best interests of their clients.
