Category: Distribution · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-05
An insurance agent is an intermediary whose legal agency lies with the insurer (the principal), authorised to sell, advise on or bind cover on the insurer’s behalf. Unlike a broker, the agent represents the carrier in the contractual chain and the carrier is generally bound by acts within the agent’s actual or apparent authority.
Category: Distribution and intermediation Also known as: agent, insurer’s agent, appointed agent Regulatory basis: FSMA 2000; FCA Handbook (ICOBS, SUP 12 — appointed representatives); IDD (Directive 2016/97/EU) Related concepts: insurance broker, tied agent, multi-tied agent
The defining feature of an insurance agent is the direction of agency. At common law, where an intermediary is appointed by the insurer to solicit and write business, the insurer is bound by the agent’s knowledge and acts within authority; representations made by the agent to the client may be imputed to the insurer. By contrast, a broker is the client’s agent. The distinction matters in disclosure disputes — Newsholme Bros v Road Transport & General Insurance Co [1929] 2 KB 356 illustrates how the courts characterise the relationship by reference to who appointed and remunerated the intermediary and the scope of authority granted.
In the modern UK regulatory landscape, the term “agent” is most commonly encountered in the form of an FCA “appointed representative” (AR) under section 39 FSMA 2000 — an unauthorised firm carrying on regulated activities under contract with, and on the responsibility of, an authorised principal.
Where an agent is itself authorised, it is regulated under Part 4A FSMA in the same way as a broker, with conduct rules in ICOBS and prudential rules in MIPRU. Where it operates as an AR, the principal firm assumes regulatory responsibility under SUP 12, including responsibility for the AR’s compliance with ICOBS, training and competence, and conduct. The Insurance Distribution Directive distinguishes between “insurance intermediaries” generally and “ancillary insurance intermediaries” who sell insurance complementary to a primary business.
Agents typically have a written agency agreement setting out classes of business, underwriting authority limits, commission terms, and termination rights. “Binding authority” agreements grant explicit power to issue cover and policy documents on the insurer’s paper. Premiums collected by an agent under risk-transfer terms are held as the insurer’s money (not client money under CASS 5). Disclosure to the policyholder is required under ICOBS 4 — including the agent’s identity, its principals where applicable, and whether advice is given.
The category spans tied agents (one insurer), multi-tied agents (a panel), introducer ARs (who refer business without giving advice), and binding-authority coverholders (often Lloyd’s). In the life sector, “appointed representatives” of networks dominate distribution; in general insurance, true single-insurer agents are now rare, with most retail and SME placement running through brokers or directly online.
A high-street motor retailer is appointed as the AR of an authorised motor insurer to sell add-on GAP insurance to car buyers. The retailer’s salespeople have authority to bind cover up to £50,000 sum insured. The insurer remains responsible for ICOBS compliance, training and any redress arising from mis-selling at the dealership.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email info@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote