Professional skill and specialisation

Press, 12 July 1979, Page 11

Professional skill and specialisation

The major function of the insurance broker has historically been and still is the placement of insurance with underwriters on

behalf of their clients, which in the climate of today’s complex and fluctuating markets, is becoming a more exacting and

necessarily detailed business. From the time when insurance, as we know it today, first began with Lloyds Underwriters in London Underwriters in teenth century, insurance techniques have developed to a degree of sophistication which demands a great deal of professional skill and specialisation. The insurance broker is for industry a professional adviser who negotiates and procures on behalf of his client a contract of insurance. In 1963, the president of the Corporation of Insurance Brokers (United Kingdom) reported that the broker was a

true intermediary in that he stood between the parties who desired to enter into a contract of insurance and this has not changed. It is readily apparent that the first, requirement of an insurance broker is to know his business and with this goes the obligation to apply his knowledge with scrupulous honesty and good faith in guiding his client towards the most suitable risk protection and insurance covers. His duty is to consider the range of hazards involved in the particular business and to know the many risks connected with that type of enterprise.

He has to be able, and qualified, to recommend to his clients what and how far the insurance portfolio should spread and also should be aware of the ability of the numerous insurance companies to underwrite the particular classes or risk offered. Eighteen years have elapsed since the formal establishment of the Registered Insurance Brokers, Associaiton of New Zealand, Ltd, Inc. In order to consolidate brokers from both the life and general sectors of the industry the Corporation of Insurance Brokers of New Zealand was more recently formed to embrace- all divisions under one body, including practising brokers not registered by the Insurance Council of New Zealand.

Regsitration of the nonlife broking firms is granted to brokers following application to both the Insurance Council of New Zealand, representing insurers, and subsequently qualify for acceptance by the corporation. At present, any person may operate as an insurance broker in New Zea- > land without becoming a i member of the Corpora- I tion of Insurance Brokers, | thus escaping the rigid i terms and conditions set down. In an extract from the president’s report for the year ended June 30, 1979, Mr Dennis Adam comments:

“In accordance with a directive from our members last year, one of the council’s most important tasks hs been the furtherance of an insurance brokers registration act. We have piloted this to a point where it is ready for consideration by Government and Parliament.” When this bill is passed, only insurance brokers who have met the exacting requirements of their profession will be permitted to hold themselves out as insurance brokers. Until that time, the business community would be well advised to consider confining their dealing to the insurance brokers as displayed on this page.