insurance tied agent

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An agent who represents a particular insurance company or companies. In life and pensions insurance, a tied agent represents only one insurer and is only able to advise the public on the policies offered by that one company. In general insurance (motor, household, holiday, etc.), a tied agent represents no more than six insurers, who are jointly responsible for the financial consequences of any failure or mistake the agent makes. In both cases the agent receives a commission for each policy that is sold and a further commission on each subsequent renewal of the policy. The commission is calculated as an agreed percentage of the total premium paid by the policyholder. The distinction between the two forms of insurance tied agent was a consequence of the Financial Services Act 1986 and the General Insurance Selling Code 1989 of the Association of British Insurers.

Subjects: Financial Institutions and Services.

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