Insurance Intermediaries

Abstract

The Insurance Brokers Act 1977 was passed creating the status of registered insurance broker. The immediate side-effect of that development was that non-registered independents could no longer call themselves brokers but they were free to use any other title they chose. Insurance agents did not comprise a generic group. Authorisation can be obtained from three sources. Insurance intermediaries will usually seek authorisation from the Personal Investment Authority. In 1998 the Government announced its intention to repeal both its 1977 and 1986 legislation. The normal situation is that the insurer will either have a contract of employment with his employees or an agency agreement with independent agents and brokers. Ratification may be express or implied. Implied ratification arises where the conduct of the principal shows that he adopts or recognises the transaction. The contract of employment or the agency agreement will provide the basis of the relationship and therefore the rights and duties between the principal and his agent.