Producers (life insurance)

Responsibilits of a Agent to the Insured/applicant

-Must seek and gain knowledge on an ongoing basis throughout their personal career. -Must forward premiums to the insurer on behalf of the insured/applicant

Pro/agent responsibilty to Insurer

-Responsible for presenting, modifying, affecting, accepting the performance of or terminating the business contracts of the insurer -Have a fiduciary duty to the insurer when handling premium funds in an account seperate from personal funds -Reports any material facts that may affect the underwriting of a policy to the insurer. -Not required to emphasize profitable policies

Authority of agent to insurer

1.Express: The power that is expressed (written) in the agents cotnract (ex: binding authority) 2. Implied authority-the authority that the public BELIEVES the agent to have 3. Apparent-When the agent exceeds the authority expressed in his/her contract, and the insurer does nothing to counter the public impression that such authority exists (ex: the agent accepting premium on lapsed polices)

Surplus Lines agent/broker

A party licensed to write insurance coverage with nonadmitted insurers when such coverage cannot be placed with an admitted insurer.

Law of Agency

A relationship between two parties where one (the producer/agent) may act on the behalf of the other (the principal) and bind the actions or words of the principal

Nonresident Agent

An agent who is licensed to write business in other states as well as his/her residence state

Consultants

In the states tha recognize consultants: -They offer advice, counsel, and opinions of service in respect to benefits, and the advantages of any insurance policy or contract. -They are compensated by fee for service, commissions, or other legal considerations. Only one time per consultation -they are NOT bank trust officers, attorneys, or CPAs

Broker

One that negotiates insurance contracts on behalf of the insured, thereby representing the client's interest NOT the insurer

Insurer as Principal

The insurer is the source of the authority in which the producer/agent must abide. -When acting in the scope of authority, the insurer is responsible for all of the producers/agents acts -when the producer/agent exceeds the authority in the contract, the producer/agent may be personally liable

Producers/agents

an individual appointed by an insurance company to represent the company and to present policies on its behalf (think state farm agents)