Corporate agent

Not every insurance seller is an agent or a broker. A corporate agent is a company. It represents an insurer and sells its policies. Usually it already has its own customers for some other reason.

The workbook gives two everyday examples. A travel agent sells travel insurance along with a trip booking. A vehicle dealer sells motor insurance along with a car. In each case, the insurance sale rides on a relationship the company already had with the customer.

The cap. A corporate agent, if composite, can work with a maximum of three life insurers, three general insurance companies, and three health insurance companies — three slots in each of the three lines, not an unlimited number.

A special case: bancassurance. When a bank becomes the corporate agent of an insurance company, the arrangement is given its own name — a bancassurance arrangement or partnership. The bank sells insurance products through its existing branch and customer network, exactly as the travel agent or vehicle dealer does in its own business.

Against a broker. Table 1.2 in the workbook contrasts the corporate agent with the direct broker on who it represents and how it is paid: a corporate agent represents the insurer company(ies) and earns commission from them; a direct broker represents the client and can charge the client a fee as well as earn commission from the insurer.

Illustrative figures — the workbook states the cap without rupee figures, so these numbers are for illustration.

Swift Motors, a car dealership, is registered as a composite corporate agent. It sells motor insurance on behalf of three general insurers — the maximum permitted — offering its car-buying customers a choice among them at the point of sale, alongside the vehicle purchase. A customer buying a car worth Rs 8,00,000 takes a comprehensive motor policy with an Insured Declared Value of Rs 8,00,000 and pays an annual premium of Rs 24,000, sold to her by Swift Motors as the corporate agent, which earns commission from the insurer on the sale.

Separately, Reliable Bank has a bancassurance partnership with a life insurer, selling that insurer's policies through its branch network to its existing depositors — the same corporate-agent structure, just carrying the bancassurance label because the corporate agent here is a bank.

Chapter 1 (Basics of Insurance), section 1.8.3, defines corporate agent alongside composite broker and composite insurance agent, and Table 1.2 contrasts it with the direct broker. Expect a question on the three-insurer-per-line cap, and on identifying bancassurance as a corporate-agent arrangement where the agent is a bank.

• The composite corporate agent cap is three insurers per line (life, general, health) — not one, unlike the composite insurance agent's one-per-line cap.
• A corporate agent represents the insurer, not the client — the opposite orientation to a direct broker.
• Bancassurance is a corporate agent arrangement where the corporate agent happens to be a bank — it is not a separate licence category.
• Do not confuse corporate agent (a company selling on behalf of insurers) with composite broker (a broker licensed for both direct and reinsurance broking).