Insurance mediation
Insurance mediation refers to activities carried on by insurance intermediaries to assist customers in the preparation, conclusion, administration and performance of an insurance contract. In practice, insurance mediation may for example constitute comparison and presentation of insurance solutions to the customer, making an offer for an insurance contract or assisting the customer in filing an insurance claim.
The insurance intermediary may serve either as an agent or as an insurance broker. The roles of agent and broker are clearly different.
- Agents may represent one or several insurers (ie insurance companies or insurance associations), selling the insurance policies of the insurer and acting on behalf and at the risk of the insurer.
- Insurance brokers act on behalf of their customers on the basis of a commission agreement concluded with the customer. Insurance brokers are independent of insurers. The duties of insurance brokers include to survey customer risks, request insurance offers from insurers, compare policies and make recommendations for the policy best suited to the customer's needs.
Regulatory disclosures on insurance intermediaries
Insurance intermediaries must provide their customers with regulatory information on their business. Customers must, for example, be informed of the register of insurance intermediaries where the insurance intermediary is listed and how registration details can be checked. Customers must also be notified of the procedure for raising complaints against the insurance intermediary.
Customers must be appropriately notified by agents before entering into the insurance contract and by brokers before conclusion of the commission agreement and, where necessary, when the contract or agreement is changed or renewed.
Registration requirement for insurance intermediaries
Only insurance intermediaries listed in the register of insurance intermediaries maintained by the Financial Supervisory Authority, or insurance intermediaries duly registered in another EEA member state, may provide insurance mediation services in Finland.
The registration criteria are laid down in the Insurance Mediation Act. For example, natural persons registered as agents and those employees in the agent's service who are directly involved in insurance mediation must possess adequate professional skills in relation to the nature and scope of the activities pursued. They must, in particular, have knowledge of the lines of insurance represented and the legislation governing the provision of insurance mediation services and be familiar with best insurance practices and well versed in the relevant conduct of business practices. Natural persons registered as insurance brokers must possess the adequate professional skills as proven by the insurance broker's exam. As well as having passed the exam, insurance brokers must have knowledge of the legislation governing the provision of insurance mediation services, in particular, and be familiar with best brokerage practices and well versed in the practices for carrying out the commission.
Insurance intermediaries are also supervised by FIN-FSA
FIN-FSA supervises the activities of insurance intermediaries.
24 October 2011