Producer Authority

List Actual Powers of Producers

1. Allowed to solicit appointments. 2. Select or reject risks in the field 3. Complete applications 4. Collect premiums 5. Submit applications and premiums to the insurer. 6. Other various duties.

Concept (LAW) Of Agency (Relationship: Producer & Insurer)

1. Relationship between insurer and producer. 2. Producer represents Insurer 3. Insurer is referred to as the Principal 4. Producer is referred to agent or authorized representative of the principal. 5. When producer acts within authority the "principle is bound" or responsible for such action.

Actual or Express Authority

1. Type of authority agent possess in contract or agreement. 2. Specifies actual powers and functions of the agent.

Producer responsibilities To an Applicant / Insured

All producers are required to act in a fiduciary capacity when collecting premiums or dealing with the public. (Behave honestly, fairly, and professionally!) All producers have a fiduciary responsibility when engaging in insurance transactions. Payment to the producer is payment to the insurer.

What type of insurance do Insurers get to protect themselves from producer mistakes?

E+O insurance. (Error and Omission).

Apparent Authority

This is authority the customer believes you have. The public perceives the agent can do a million things but in fact these are not authorities the producer has.

Implied Authority

Unwritten authority. Any business activity that are usual and customary are implied. Like going outside and seeing the applicant's car is in bad condition--calling that in to the insurer before finishing the application is a given.

Error and Omission

When a producer make an unintentional error or honest mistake. This is why insurer purchases Errors and Omissions (E+O)