Agents, producers and brokers

Insurance Producer

A licensed sales person working in an insurance agency to acquire new clients and sell new policies to both new clients and existing clients of the agency. The producer might service policies they have sold however they could be serviced by customer service representatives.

Fiduciary Responsibility

An ethical and legal obligation to perform a person's duties in a trustworthy manner at the best interest of the principal (insurance company).

insurance agent

An insurance agent is typically the owner of the agency known as the principal agent. The terms agent and producer are used interchangeably however there is a distinction between the two.

Apparent Authority

The authority an agent is believed by third parties to have because of the behavior of the principal. Ex: the apparent authority of an agent to bind insurance coverage.

Law or concept of agency

The contractual agreement "appointment contract" between the principal (insurance company) and the agent (insurance agent or agency).

Controlled Business

The limit to the coverage a producer can write for family and personal employers.

Implied Authority

an agent's authority to do things not specifically authorized in order to carry out express authority

Independent agent

an insurance agent who may place coverage with any company with which he or she has an agency relationship, as long as the insured meets that company's underwriting standards

Captive Agent

an insurance agent who represents only one insurance company and who is, in effect, an employee of that company

insurance broker

represents the insurance applicant // must be licensed by the state in which they conduct business.

Express Authority

the authority of an agent, stated in the document or agreement creating the agency