Insurance brokers must be authorised by, and registered with, the Bank of Lithuania. An insurance broker may also conduct reinsurance mediation activities.
Insurance brokers are known as “independent insurance intermediaries” and are only permitted to carry out insurance mediation activities on behalf of policyholders, insureds, beneficiaries, injured third parties or insurers. They are prohibited from carrying out other commercial activities. At all times an insurance broker must act in the interests of the policyholder, insured, beneficiary or injured third party, even if he is acting on behalf of an insurer. This means that a broker must disclose to his clients whether he acts on behalf of the policyholder, insured, beneficiary, injured third party or insurer. The broker must disclose the names of the insurers that he acts on behalf of, if requested to do so by the client.
When an insurance broker acts on behalf of an insurer, he must offer the proposer similar products from at least three insurers. For the purposes of Lloyd’s, the Lloyd’s market is deemed to be one insurer.
Insurance brokers are corporate entities and must purchase the minimum level of professional indemnity insurance.
Please see here for a list of insurance brokers and reinsurance intermediaries on the Bank of Lithuania’s website.
Insurance agents must be registered with each insurer whom they represent. An insurer must keep a list of its agents on its website and the specific requirements for this list are contained in Resolution No. N-31 dated 16 March 2004 (as amended and supplemented by Resolution No. N-381 dated 2 September 2009).
Insurance agents are known as “dependent insurance intermediaries” and are permitted to carry out insurance mediation activities on behalf of insurers only.
Insurance agents are not permitted to offer similar products from different insurers. For the purposes of Lloyd’s, the Lloyd’s market is deemed to be one insurer. As an example, an insurance agent may offer property fire insurance from a Lloyd’s syndicate and public liability from a company market, but it cannot offer public liability from both a Lloyd’s syndicate and a company market. Insurance agents can deal directly with an insured.
Insurance agents may be corporate entities or natural persons. They are required to purchase the minimum level of professional indemnity insurance unless such insurance is purchased by the insurer whom they represent or the insurer agrees to carry the liability for the agent’s professional negligence. The insurer must ensure that the insurance agents follow the requirement to insure their professional liability or that an alternative arrangement (as above) has been made. If the proper cover is not in place or an alternative arrangement (as above) has not been made, the insurer may be obliged to indemnify the third parties against any loss caused due to the professional negligence or misconduct of the insurance agent.
The insurer is responsible for the professional training of the insurance agents acting on their behalf.