(1) Evading business tax and personal income tax. According to the tax law, the brokerage company's commission income should pay 5Z business tax. However, because few brokerage companies set up branches in other places, most of them have fixed business personnel and no formal branches, which makes it impossible for brokerage companies to register and declare taxes locally. Although the local commission income is settled by the head office, a considerable part of the commission income is detained by local business personnel privately, and the commission income of the current year reflected in the tax return of the brokerage company is only a part of the actual commission income of the company, not all.
(2) Some employees of brokerage companies engage in "black brokerage" and "black insurance". At present, brokerage companies have no formal branches in other places, and the filing system for overseas personnel has been cancelled. Brokerage companies are neither registered with the local industrial and commercial tax authorities nor filed with the local insurance regulatory bureau, which leads some people with experience in brokerage companies to take advantage of laws and regulations to engage in brokerage business illegally, and even some "black brokers" and "free brokers" appear in the market. They privately carved official seals, made false materials, carried out insurance business in the market under the guise of insurance brokerage companies or insurance companies, and demanded high commissions, which seriously disrupted the insurance market and intermediary market.
(3) Forging insurance policies and misappropriating insurance premiums, seriously damaging the legitimate rights and interests of the insured. In the daily business inspection, the author found that some business personnel of brokerage companies took advantage of the company's inadequate control and loopholes in laws and regulations, and even issued false policies and receipts to customers, misappropriating customers' policies at will. However, the head office of insurance brokerage company basically adopts slack management for overseas personnel, and has no strict requirements on its financial and business execution, so it cannot completely control fraud.
(D) Imperfect operating mechanism, resulting in continuous contract disputes. After signing a brokerage contract with the insured, the brokerage company must also provide corresponding brokerage services for customers within a period of time. However, due to the imperfect management mechanism and lack of long-term planning, some brokerage companies blindly carry out brokerage business in the local area without detailed market research. When the company can't maintain normal operation, it has to give up the local market. As a result, some brokerage contracts cannot be effectively performed. Contract disputes between policyholders and brokerage companies occur from time to time.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.