Insurance brokerage in the United States

Insurance brokerage in the United States

Insurance brokerage in the United States is also a regulated industry, with almost all states individually issuing brokerage licenses. Most states have reciprocity agreements whereby brokers from one state can become easily licensed in another. There are exceptions to this, most notably in the case of Hawaii, where all licensed brokers must live on the island.

Because of industry regulation, smaller brokerage firms can easily compete with larger ones, who are forbidden by law from providing their customers with rebates or other discounts on the policy prices of insurance companies. For this reason, the United States is home to many different notable insurance brokerage firms.

Brokers play a significant role in helping companies and individuals find property and casualty (liability); life and health insurance. For example, research shows that brokers play a significant role in helping small employers find health insurance, particularly in more competitive markets. Average small group commissions range from 2 percent to 8 percent of premiums. Brokers provide services beyond insurance sales, such as assisting with employee enrollment and helping to resolve benefits issues.^[2]

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