What are the types of Insurers?
What is the difference between an insurer and a reinsurer?
An insurer is an entity or organisation that provides insurance.
To be an insurer in New Zealand, an organisation must abide by the regulations of the Insurance (Prudential Supervision) Act 2010 ("the IPS Act") which has established a comprehensive legislative framework for the prudential regulation and supervision of persons carrying on insurance business in New Zealand.
Any person or organisation wishing to carry out insurance business in New Zealand must comply with the requirements of the IPS Act (including captive insurers and reinsurers).
A reinsurer is an underwriter of reinsurance. Reinsurance is the insurance brought by insurers in order to mitigate risk.
A reinsurer agrees to pay specific losses incurred by an Insurer in return for a part of the premium paid to the Insurer.
What is a broker?
An insurance broker is an independent professional adviser who acts for you.
Insurance brokers are specialists in insurance protection.
They are independent, have an in depth working knowledge of the insurance market, are able to provide professional objective advice on identifying risks and exposures, and recommend cost effective solutions.
Insurance brokers are instructed by you, and at all times, act on your behalf.
They are not agents of the insurance company. Their independence ensures that you benefit from the convenience, knowledge, choice, innovation and their high level of professionalism.
The broker's task is to help you identify the risks that you or your business may be exposed to. He or she can then advise you on what risks should be insured against, and then if you agree, the broker will canvass the insurance market to obtain the best insurance protection to meet your needs, at a competitive price.
The broker then arranges the insurance policy, and documentation. He or she can also help you with information when required, especially if you have a claim, and your broker will remind you when policies are due for renewal or amendment.
In personal and business matters, the correct insurance is vital. Wrong or inadequate protection can lead to disastrous consequences for individuals, families or businesses. The right advice makes all the difference and prevents costly mistakes.
Insurance brokers undertake all the detailed discussions and negotiations on insurance matters for you, leaving you free to get on with running your business or tending to your own daily responsibilities.
As your circumstances change, the broker will review your policies ensuring that the policy is appropriate, and that you remain well protected. He or she may suggest amendments to the policies in the light of market changes or changes in your business or domestic situation. This expertise is aimed at saving insurance costs and improving the effectiveness of the cover.
Should a client have reason to lodge a complaint against a Member, a committee specifically set up for this purpose will hear this. This Committee is made up and chaired by one of three independents all recommended by the Ministry of Consumer affairs. There are also two brokers on this committee to provide industry advice. Complaints Procedures and Forms are available here.
The Insurance Brokers Association of New Zealand Inc. (IBANZ) http://ibanz.co.nz/default.htm is New Zealand's professional body representing the interests of fire and general insurance brokers, risk managers and consumers in New Zealand.
IBANZ is the voice of the industry, advising members, government, consumer groups and other stakeholders on key insurance issues.
The organisation provides technical advice, guidance on regulation and business support. Our role is to raise, and maintain, standards. IBANZ also partners with Professional IQ College to provide education and continuing professional development opportunities.
Banks offer insurance, is it same as insurance from an insurance company?
Banks in New Zealand offer a wide range of insurance. These insurance products are underwritten by various insurance entities. That means an insurer has signed and accepted liability offered by a bank, thus guaranteeing payment in case loss or damage occurs.
What is an insurance agent?
Insurance agents are different to brokers.
Insurance agents sell insurance to clients. They also study insurance applications and make decisions on the terms and conditions of new insurance policies.
Insurance agents are insurance professionals that serve as an intermediary between the insurance company and the insured.
Agents have no duty to conduct a thorough examination of your business or to make sure you have appropriate coverage. Rather, it is your obligation to make sure you have purchased needed coverage.
Insurance agents can be either:
- Captive - A captive agent is an agent who works for only one company and is a "captive" of that company. A captive agent will sell policies only for that insurer.
- Independent - An independent agent is one who works as an agent for a variety of different insurers. An independent can produce policies from several insurers and offer some comparisons of different insurance policies.