Tied agent
An intermediary appointed by a single insurer, or a few, to distribute its products on its behalf. A broker, by contrast, acts for its client.
Article L. 511-1 of the French Insurance Code makes the principal civilly liable for loss caused by the fault of its representatives acting in that capacity. For a tied agent, the principal is the insurer. The agent is the insurer's representative: it acts in the insurer's name, binds within the limits of its appointment agreement, and its faults in carrying out the appointment come back to the insurer. A broker acts for its client. It bases its advice on an analysis of a sufficient number of contracts on the market and answers for that advice out of its own assets. A tied agent need not compare market offers, since it represents only one. It still owes a duty of advice on its insurer's products, and ORIAS registers it in a separate category from brokers. The model still carries a lot of weight in France and Germany, where agency networks write a large share of personal lines and small commercial business. It rests on customer loyalty and moderate acquisition costs. Its limit is the range of a single insurer, which comparison sites and bancassurance have made visible to customers.
In France, an insurance general agent's status rests on an appointment agreement signed with an insurer, and the intermediaries register lists the agent in a separate category from brokers. If the advice was bad, the type of mandate decides whether the insured goes after the insurer or after the intermediary itself.
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