Insurance agents are in charge of identifying sales possibilities for insurance products as well as managing a client portfolio. These specialists, also known as Insurance Sales Agents, are in charge of creating risk management strategies, administering policy renewals, and tracking claims.
Is an insurance agent an employee?
An insurance agent is not an employee of a company that provides insurance. While some aspects of the agent-insurance company relationship may appear to resemble that of an employer-employee relationship, the Supreme Court (SC) held in Tongko v The Manufacturers Life Insurance Co. (Phils.) Inc. (Manulife) (Resolution, GR 167622, January 25, 2011) that “there are built-in elements of control specific to an insurance agencydo not amount to the elements of control that characterize an employment relationship governed by the FLSA.”
“The Insurance Code establishes clear guidelines for how an agent negotiates for the sale of a company’s products, as well as his collection actions and delivery of the insurance contract or policy.” The Civil Code also defines an agent as “a person who pledges himself to perform something on behalf of another with the approval or authority of the latter,” according to the Supreme Court.
“Article 1887 of the Civil Code further states that the agent must act in line with the principal’s instructions when carrying out the agency.” x x x x x x x x x All of them appear to speak of the insurance company’s control over its agents when read without a comprehensive awareness of fine legal nuances. They are, however, controls aimed solely at certain outcomes in the conduct of an insurance agency, and are, in fact, legal parameters defining an insurance agency and the associated obligations and responsibilities that an insurance agent must follow and carry out. They don’t have the level of control over the means and manner of completing a work that is invariably a feature of an employment relationship as defined by labor law. “From this standpoint, the petitioner’s arguments cannot succeed,” it stated.
“Manulife’s instructions about the objectives and sales targets, in conjunction with the training and engagement of other agents, are among the directives that the principle may impose on the agent to complete the assigned tasks,” the principal adds. They are specific outcomes that Manulife hopes to achieve through its agents. Manulife’s code of conduct, meanwhile, does not necessarily encroach on the methods and manner in which insurance brokers do their business. Instead of employer guidelines on how specific duties should be completed, codes of conduct are conventions or standards of behavior. According to the High Court, “these codes, as well as insurance-industry rules and regulations, are not, per se, indicative of labor-law authority under our jurisprudence.”
“The petitioner’s enumerated responsibilities in his motion are unsupported by evidence and, as a result, are unworthy of consideration.” Even if they exist, they primarily relate to insurance agent obligations including remitting insurance fees to Manulife, delivering policies to the insured, and providing after-sale services. These responsibilities for agents leading other agents include supervising other insurance agents, recruiting other insurance agents for Manulife as principal, and ensuring that these other agents complete the proper paperwork while selling insurance. The fact that Manulife has the authority to assign and remove agents under the petitioner’s supervision is consistent with its role as a principal in an agency relationship; they are Manulife agents in the same way that the petitioner was a Manulife agent all along,” it said.
What type of insurance sales pays the most?
While there are various types of insurance (ranging from vehicle insurance to health insurance), selling life insurance is the most lucrative business in the industry.
Is an insurance sales agent a good career?
If you’re debating whether or not insurance sales is a smart career choice, it’s a good idea to weigh the benefits of this industry. Here are a few ideas to consider:
Flexible schedule
Many insurance agents work on their own schedules, which allows them to be more flexible. Setting your own schedule is likely interesting if you do not want to work standard business hours or if you have other responsibilities that necessitate a more flexible work schedule. Although insurance agents frequently meet with clients and possible leads in person, they may operate from home for at least part of the time. Those face-to-face meetings will almost always take place in a professional context.
High earning potential
Because many insurance sales agents are paid on commission, there is a lot of money to be made. Work ethic and willingness to put oneself out there to establish relationships and offer insurance products to clients determine your earning potential. In addition, policy renewals provide insurance agents with a passive income stream.
Opportunity to provide a benefit
Insurance is something that everyone needs, and it can provide a safety net in the case of a calamity, such as an unexpected death or a natural disaster that causes major property damage. Agents have the opportunity to deliver a significant advantage to their clients by selling insurance. Health insurance can help cover medical costs and treatments, while auto and house insurance safeguard these essential and necessary assets. Life insurance is also advantageous because it can pay funds to a person’s family members after they have passed away.
Minimal entry barriers
There is a state licensure exam that insurance salespeople must complete, but there are few other barriers to admission. Although some employers may prefer it, a college diploma is not required for this position. Most agents learn on the job and through training, so prior experience isn’t required.
What is the difference between sales representative and insurance agent?
On the surface, the phrases sales agent and sales representative appear to be identical, yet they are drastically different in the business world. A sales representative works for a single company, but an agent may represent numerous companies and is typically self-employed.
What does Agent mean in insurance?
An insurance agent is a professional who earns a commission by selling an insurance company’s goods to consumers. In order to sell insurance, an agent assists consumers in selecting the appropriate coverage while also representing the insurance business in the transaction.
Captive and independent agents both operate on commission and can complete an insurance transaction from beginning to end on a wide range of insurance plans.
Is insurance agent self-employed?
Note from the editor: This story was updated on September 19, 2017, after DollarsAndSense received clarification from AIA FA.
More than 300 Great Eastern agents are expected to join AIA Financial Advisers, according to a report released last week (AIA FA). AIA FA is a recently established financial advisory firm owned entirely by AIA Singapore. Not just the industry, but also the general public, has taken notice of the hiring of agents from one company to another.
So, what happens when an agent transfers from one firm to another? What’s more, how will customers be impacted?
Most Agents Are Self-Employed
First and foremost, keep in mind that the majority of life insurance brokers are self-employed.
Most agents do not earn a fixed salary because they are self-employed; instead, they are paid a commission whenever they sell a product on behalf of the insurers they represent.
There is no contract between the employer and the employee. Rather, their agreement can be viewed as a commercial contract between them as self-employed individuals and the insurers with which they are affiliated. Taxi drivers and taxi businesses have a similar relationship.
But Will People In Singapore Be Better Off?
Insurance agents, like employees, have the option of quitting and moving to a new organization. Self-employed individuals, such as insurance brokers, have every right to make the best possible decision for themselves in an open market between willing payers and willing contractors.
The total number of agents in Singapore does not change strictly speaking. So, whether you believe there are too many or too few agents in Singapore now, it makes no difference, for better or worse.
There are numerous situations where Singaporeans benefit from competition. The competition for private-hire cars between Grab, Uber, ComfortDelGro, and other taxi companies is the most recent example.
Drivers are offered incentives to switch businesses in order to gain market share (i.e. similar to insurance agents being poached with lucrative offers).
Consumers profit as well, as they get access to innovative products (such as Grab Hitch and UberPool) as well as discount codes.
On the other side, there are times when contests are detrimental to customers. Singtel’s attempt to compete with StarHub in the cable TV market is the best example we can think of.
Singtel opted to overpay $400 million for the exclusive rights to screen the English Premier League (EPL) broadcast in Mio TV in order to gain market dominance in 2010. While this improved their market share, it was ultimately customers who paid the price when our EPL membership went from $34 to $60 in 2012.
Only time will tell whether AIA FA’s rivalry and recruitment of agents will benefit customers or merely allow the corporation to acquire market share at the expense of a competitor.
The Singapore Life Insurance Association (LIA Singapore) was quick to respond.
In a statement issued on September 14, LIA Executive Director Pauline Lim said: “To ensure that the sector continues to progress in a sustainable manner, LIA Singapore would like to emphasize the necessity of following professional, responsible, and ethical recruitment methods. Most significantly, consumer interests must be protected, and any action that may result in the twisting and churning of business, harming our industry’s reputation and public impression, will not be tolerated.”
She also mentioned that “LIA will collaborate with its members to determine the parameters for future movements.”
Her remarks, in our opinion, are reasonable. It’s difficult to see how a heated recruitment struggle in which insurance companies compete for agents can benefit either the insurance companies or the consumers.
Also read: 3 Unethical Financial Industry Practices That Singaporeans Should Be Aware Of
Editor’s note: An earlier version of this article quoted estimates from the mainstream media claiming that AIA FA offered around $100 million for the more than 300 Great Eastern agents. Mr Tan Chuan How, CEO of AIA FA, has contacted us to clarify that this statistic is incorrect, and that AIA FA only offers long-term compensation and remuneration packages based on performance and company excellence. While AIA is unable to comment on any stated monetary amounts because to their sensitivity, several aspects are considered when creating pay and remuneration packages.
He also stated that AIA believes in rewarding employees based on their particular qualifications, track record, experience, and, most importantly, the quality of their service to clients based on their specific demands. AIA has taken further steps to assure the highest level of business quality, and should any of their representatives disclose any flaws, AIA will act quickly to perform complete investigations. Any individual found guilty of misbehavior will face disciplinary action, and their representatives are well aware of the serious implications of such behavior.
Are all insurance agents 1099?
To aid independent contractors acting as service providers in their tax preparation and reporting, the IRS requires all firms operating in the United States to produce 1099-MISCs. Sole proprietors, general partnerships, limited partnerships, and limited liability firms are all considered independent contractors, with the exception of a few unusual exceptions. Most insurance agencies do not require 1099-MISC because most businesses pay the insurance company rather than the agent.
Why do insurance agents quit?
The majority of agents leave because they are unable to make enough money to sustain themselves and their families. The only way to fix this is to learn how to generate more and better leads, as well as how to follow up on them. People use the internet to conduct fact-checking missions. They are unconcerned with who answers their questions as long as they receive responses.