A pseudo broker only poses as an insurance broker. In reality, however, he works like an agent, and has, for example, only five rates from motor insurers or, say, a single rate from a transport insurer on offer. He does not have a “balanced” market analysis to advise his own client in the “best possible” way. The first consequence of this is that the insurance broker may be liable for damages. In addition, according to the Insurance Mediation Act, the license, and according to the conditions in the pecuniary damage liability, the insurance coverage can be at stake. Numerous intermediaries must now also reorganise themselves legally in order to comply with the changed legal requirements.
(BA Heidenheim Newsletter Versicherungsvertrieb und Finanzberatung Feb 2007, p. 2)
Courtesy of www.ba-heidenheim.de.