8. Role of a broker

Question 1

Principal and agent

Answer 1

Agent is one authorised by the party (principle)

Question 2

3 ways agent / principle relationship can arise

Answer 2

Consent - mutual agreement
Necessity - entrusted and it becomes necessary to act on their behalf
Ratification - act without authority but later accepted by the principle

Question 3

Agent of the insured

Answer 3

• advises on cover or placing of insurance
• advises insured on how to make a claim

Question 4

Agent of the insurer

Answer 4

• can bind cover
• authority to collect premiums and does so

Question 5

Duties of an agent (5)

Answer 5

Obedience
Personal performance
Due care and skill
Good faith
Accountability

Question 6

Duties of a principle

Answer 6

Remuneration
Indemnity

Question 7

Actual authority

Answer 7

Express - mutual agreement
Implied - actions taken in a certain order to carry out express instructions

Question 8

Apparent authority

Answer 8

Third party assumes appropriate authority of agent

Question 9

Termination of agency

Answer 9

Mutual agreement
Termination
Death / bankruptcy / insanity

Question 10

Unique market reference

Answer 10

Unique code given to the placed risk

Question 11

Enterprise Act 2016

Answer 11

1 year window for insureds who believe their claims were paid late to file a legal action for damages.