Frequently asked questions
What does an insurance broker do?
According to the Insurance Act the role of an insurance broker is to initiate, propose or carry out the preparatory works for concluding insurance and reinsurance contracts, to provide assistance in exercising rights under insurance or reinsurance contracts, in particular in settlement of claims addressed to an insurance company or a reinsurance company.
For more detailed information on the services of insurance brokers visit What we do.
Who can be an insurance broker?
The insurance broker is a physical person who is authorised to do the business of insurance brokering and does so within an insurance brokerage company.
The insurance and reinsurance brokerage company is the legal entity whose headquarters are in the Republic of Croatia and whose role is to offer the services of insurance and reinsurance brokering. Such company needs to have the permit of a supervisory body to provide these services.
The business of insurance and reinsurance brokerage is the sole activity of such company.
Who supervises the insurance brokers?
Croatian Financial Services Supervisory Agency (HANFA) supervises the insurance brokers.
HANFA also issues brokers' authorizations to the physical persons who meet the following criteria: a university degree, work experience (a minimum of one year's experience in the insurance field), a certificate of no criminal record and passes the state exam for brokers.
You can find the register of authorized insurance brokerage companies (legal entities) and the register of authorized insurance brokers (physical persons) on HANFA's web site (www.hanfa.hr)
What are the obligations of an insurance broker towards his clients?
An insurance and reinsurance broker shall carry on brokerage activities in such a manner as to safeguard the interests of the insurance policyholders, reinsurance policyholders or the persons insured.
In order to fulfil the obligation, an insurance and reinsurance broker shall:
- make an appropriate risk analysis and set out underlying principles of the required coverage;
- provide a written explanation as to the reason for proposing the respective insurer or reinsurer and
- inform the policyholder of the level of the commission determined for conclusion of an insurance or reinsurance contract;
- provide insurance and reinsurance brokerage services, on behalf of the policyholder under an insurance or reinsurance contract, in concluding the insurance or reinsurance contract, which is in compliance with the requirements of the insurance policyholder or reinsurance policyholder with regard to the insurance coverage, whereby this obligation may be limited only to specific insurance or reinsurance services, if the insurance broker has explicitly informed the person insured thereof
- inform the insurance or reinsurance company that a prospective insurance or reinsurance policyholder is seeking an offer for the purpose of conclusion of an insurance or reinsurance contract;
- deliver the insurance policy and reinsurance contract respectively to the insurance policyholder and reinsurance policyholder, and other documents related to the insurance and/or reinsurance contract;
- check the contents of the insurance policy and/or reinsurance contract;
- provide assistance to the insurance or reinsurance policyholder or to the person insured during the term of validity of the insurance or reinsurance contract, both prior to and after the occurrence of the insured event, and, in particular, make sure that legal actions which are of importance for retaining and exercising the rights arising from the insurance or reinsurance contract are taken by the policyholder under the insurance or reinsurance contract or the person insured within the time limits prescribed for taking such legal actions;
- constantly check the insurance or reinsurance contracts concluded by the policyholder under the insurance or reinsurance contracts through his/her insurance and reinsurance brokerage activities, and prepare proposals for modifications to these insurance contracts for the purpose of providing a better protection.
Why hire an insurance broker?
Because an insurance broker is:
- independent and looks out solely for the clients' best interests,
- he is a professional who works exclusively in insurance and reinsurance,
- has access to all the insurance and reinsurance companies on the national and global market
- An insurance broker assumes responsibility for all the work related to risk identification, risk analysis and insurance placement
The responsibility of the broker for the services he provides is accompanied by the Professional liability policy with limit of 7.500.000 HRK per occurrence and 11.250.000 HRK annually.
Collaborating with a broker does not require additional funds from your firm and it can also result in considerable savings through optimising your existing insurance contracts, in saving time and resources you should otherwise engage.
Who pays for the services of insurance brokers?
According to the Insurance Act the payment for brokers' services is defined in the following way:
- insurance broker has no right to demand payment of a commission or any other fee from the policyholder/ insured person, unless it is specifically stipulated in the Contract with the Policyholder/Insured person.
- if the broker has a Contract with the Policyholder for the payment of his services, he has no right to demand commission or any other fee from Insurer on the basis of the same insurance contract
- insurance broker is not allowed to change his level of commission for Insurance contracts that had already been concluded
Insurance broker is entitled to a commission as soon as the insurance contract comes into effect.
What is the difference between an insurance broker and an insurance agent?
A broker works only in the name and for the account of his client whereas an insurance agent works in the name and for the account of Insurance company he works for.
A broker seeks for the best possible option on the entire insurance market in order to find or create the insurance solution best-suited to the needs of his client, whereas an insurance agent presents to his potential client the standardised product which his insurance company offers.
Why hire a broker when you can conclude an insurance contract directly with the insurance company?
Because around 28 insurance companies do business on the market of the Republic of Croatia and with their insurance products they cover 112 risks divided into 25 groups.
If you are not fully acquainted with the products offered on the insurance market or with the financial credibility and stability of the insurance companies in question, we feel it is best that you hire an insurance broker to do this business for you.
The task of a broker is to prepare an insurance solution best-suited to your needs and to propose an insurance company that can offer you the best coverage and insurance premiums.
We would also like to mention that hiring a broker represents a guarantee of safety and professionalism which is particularly noted when dealing with creditors (financial institutions) and when doing business on the foreign markets.