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What is a Tied Insurance Intermediary (TII)?

28 Jun 2020

If you wish to purchase insurance, you would probably consider somewhere that is close by and from somebody you know or trust. This is the reason why tied insurance intermediaries (TII) flourished through the years.

Tied Insurance Intermediaries:

TII are able to provide a personalised service and are available not only in proximity, but also flexible enough to provide clients with a timely service as and when required.

Formerly known as agents or sub agents, TII is the name given to intermediaries authorised to sell insurance policies on behalf of one company and they are regulated under CAP 487 of the Insurance Distribution Act of the laws of Malta.

Misconceptions about tied insurance intermediaries:

There are number of misconceptions about the engagement of a tied insurance intermediary; the main ones being explored hereunder:

Myth #1: I don’t want to buy insurance from a TII as I’ll end up paying commission.

Whereas it is true that a TII is paid commission for every policy sold or renewed, this fee is borne by the insurance company being represented and not by the client. Effectively, going direct to an insurance company and going through a TII should yield the same premium.

Myth #2: Am I assured that, whatever happens, my TII will settle my insurance needs?

While it is a fact that clients receive a more personalised service from a TII, insurance cover is subject to the terms and provisions of the contract and there may be circumstances when one is not covered by the policy. Furthermore and strictly speaking, the TII is a medium from which insurance is purchased which means any claims will have to be dealt with directly by the insuring company.

Myth #3: If I go to a TII I will have restricted product choice.

It is correct to say that a TII represents one company and it is only the products of that company that may be offered. However, if the company being represented does not provide a particular class of insurance, the TII may be authorised to sell that unavailable product via another insurance company. In this way, the client will always find all the insurance products available via the TII of their choice.

How to become a tied insurance intermediary?

To become a TII, one has to be duly licensed by the Malta Financial Services Authority and among others, a certificate confirming the successful undertaking of an insurance training programme will be one of the prerequisites. This will ensure that the TII is knowledgeable and able to guide the prospective policy holder in meeting the respective insurance needs. Moreover, once approved as a TII, the regulator expects 15 hours of continuous professional development training (CPD) to be undertaken by all intermediaries, as stated under Insurance Distribution Rules Part B Chapter 7.

Malta International Training Centre:

The Malta International Training Centre offers specific courses leading to the acquiring of a tied insurance intermediaries licence as well as the provision of continuous professional development training programmes, details of which can be found here:

 

TIED INSURANCE INTERMEDIARIES            

CPD WEBINARS