The correct answer is: B. An agent can only be a trained individual for working for an insurance company
An agent can be a trained individual or a self-employed person. They can also be a corporate body.
Section 42 of the Insurance Act, 1938 states that “No person shall act as an agent for an insurer unless he is licensed to act as such under this Act.”
A bank can also act as a broker for life insurance business.
A broker is a person who acts as an intermediary between an insurer and an insured. They are not employed by either party and their role is to help the insured find the best possible policy for their needs.
Brokers are required to be licensed by the Insurance Regulatory and Development Authority of India (IRDAI).
To be eligible for a license, a broker must:
- Be a citizen of India
- Be at least 21 years of age
- Have a good character and reputation
- Have passed an examination conducted by the IRDAI
- Have paid the prescribed fees
Once licensed, a broker must comply with the Code of Conduct for Insurance Brokers issued by the IRDAI.
The Code of Conduct sets out the standards of conduct that brokers are expected to adhere to. These include:
- Acting in the best interests of their clients
- Providing accurate and complete information to their clients
- Not misleading their clients
- Not taking advantage of their clients
- Not engaging in unfair trade practices
Brokers who breach the Code of Conduct may be subject to disciplinary action by the IRDAI.