Agents/brokers - agent authorities

Question 1

They are responsible for collecting premiums, selling insurance and describing the company’s products to the client.

Answer 1

Agency

Question 2

The agent acts on the insurer’s behalf and has the power to bind the insurer to contracts. The agent’s actions are acts of the insurer.

Answer 2

Principles of agency law

Question 3

The insurance carrier is known as the

Answer 3

Principal

Question 4

The person representing client

Answer 4

Agent

Question 5

What are the 3 types of authority

Answer 5

Express
Implied
Apparent

Question 6

Written authority, usually described in a contract, that the insurer gives to the agent.

Answer 6

Express authority

Question 7

Not written, but the agent is assumed to have such authority. For example, if you are allowed to submit insurance contracts for a carrier, then it is implied that you are allowed to telephone members of the public to set sales appointments for that company’s product.

Answer 7

Implied authority

Question 8

If it “looks like” a carrier was giving an agent authority to do something on their behalf, then the agent really has that authority. For example, some carriers allow agents to submit applica- tions, but not to bind coverage. However, supplying the agent with blank binders would create “apparent” binding authority. The carrier would have to honor binders made by the agent.

Answer 8

Apparent authority

Question 9

The agent must act ethically and responsibly when dealing with the applicant and insurer.

Answer 9

Agent as a Fiduciary