Final answer:
An insurance broker is essentially an intermediary between clients seeking insurance and insurance companies, which is a true statement. They help clients find policies that fit their needs without representing any specific insurer, similar to how banks operate as intermediaries in the financial markets.
Step-by-step explanation:
The statement provided defines an insurance broker as a person who handles insurance transactions on behalf of another party, but not on behalf of the insurer. This is, generally speaking, true. An insurance broker acts as an intermediary, much like banks serve as financial intermediaries in capital markets. The broker helps clients to find suitable insurance policies from various insurers, without being tied to any particular insurance company.
In the broader context of financial operations, such intermediaries facilitate transactions and serve as a link between different parties. For instance, banks collect funds from depositors and pool these funds to lend to borrowers. Similarly, an insurance broker collects the needs and requirements of clients and matches them with the offerings of insurance companies. The broker's role is essential for providing individuals and businesses with a choice of insurance policies and aiding them in safeguarding against potential financial loss due to unforeseen events, as described by the insurance method.