Section 2.3 - 2.4 Flashcards
Insurer as principal refers to
the situation where an insurance company is the main party that engages in the business of insurance.
Express authority is
authorities written in an agent contract
Implied authority is
authorities not written in a contract, but tasks agents must preform.
Apparent authority is
tasks the agent does that a reasonable person would assume as authority
Law of Agency
the knowledge of the agent is assumed to be the knowledge of the principal, therefore the principal is liable for the statements/actions of their agents.
Law of Agency - define agent
The person authorized to act of behalf of another.
Law of Agency - define principal
The person on whose behalf the agent acts
Law of Agency - define agency
a relationship where one person is authorized to represent and act for a person/corporation
CLOAC
Consideration, Legal Purpose, Offer, Acceptance, Competent Parties.
What is a Fiduciary
a person in a position of financial trust
CLOAC - Consideration
exchange of value, premium payments
Legal Purpose
assuring risk transfer won’t violate the law
CLOAC - Offer and Acceptance
O - a proposal made by one of the parties to the contract
A - unconditional and unqualified
What is a Contract of Adhesion
Adhesion (glue)
insurance provisions are written by one party, and the other party is required to ADHERE to the contract.
a contract is written with no input from the insured
CLOAC - Competent Parties
applicants must be of legal age, sane, sober.