A broker acts on the client's mandate – the legal framework for this is the mandate agreement and the power of attorney. Many business owners carry the same questions: what exactly am I signing, what does it authorise the broker to do, and how do I get out? Factual answers follow.
- The mandate records that the broker acts in your interest, on your instructions, in insurance matters.
- The power of attorney typically covers requesting quotes, managing contracts, and staying in contact – the right to decide stays with the client.
- The mandate can be ended – in writing, for good order, with the in-progress matters settled.
What does the power of attorney authorise?
A typical broker's power of attorney authorises the broker to request quotes from insurers in the company's name, to receive information about existing contracts, to act in the administration of contracts (reporting data, requesting changes, notifying changes), and to stay in contact on claims. This is what makes the actual work possible: without it, insurers – rightly – don't release contract data to a third party. What the power of attorney does not cover by default: the decision. Binding, cancelling, amending – the client decides; the broker prepares, proposes, executes.
What does the broker commit to in return?
The mandate runs both ways: the broker commits to competent conduct, exploring the market's options, keeping you informed, and representing the client's interest – all of this operating within a statutory framework, under the supervision of the MNB (Hungarian National Bank) (the register is publicly checkable – my own registration number appears with a link in the footer). Plainly on remuneration: I charge the client no fee for advice, the intermediary remuneration is paid by the insurer – this model is unpacked in the what a broker does article.
Exiting, switching, running in parallel
The mandate isn't a marriage: it can be ended – in writing, for good order, and it's worth settling the fate of in-progress matters too (an open claim, an ongoing tender) at the same time. When switching brokers, the new mandate and the change of power of attorney get carried through with the insurers. One practical point: only one broker's power of attorney is meaningfully active on the same contract at a time – "several brokers competing in parallel on the same case" causes clashes in practice, not an advantage. The cleaner path: one appointed broker who puts the risk out to competition broadly, across several insurers – and who can be replaced at any time based on performance. When is it even worth bringing in a broker? A separate article covers that.
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