2 - A The Agent and Authority

Sam works on commission only, selling only insurance products from XYZ Insurance. What type of agent is Sam? A. Exclusive agent B. Independent sales agent C. Direct writer D. General agent

A. Exclusive agent

This agent works for only one insurer and is paid commission. A. Exclusive agent B. Independent agent C. Independent adjuster D. General agent

A. Exclusive agent

This agent works for only one insurer, and supervises and trains other agents. A. General agent B. Captive agent C. Exclusive agent D. Direct writer

A. General agent

Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's responsibilities? A. Represent the insured if a claim goes to court B. Provide ABC Insurance with complete claim documentation C. Always use reasonable care and judgment D. Adhere to the terms of his contract

A. Represent the insured if a claim goes to court

What are the 3 responsibilities of an agent?

Adhere to contract at all times Use reasonable judgment Supply all pertinent information to the insurer

Which of the following statements is FALSE? A. An agent is authorized to act as a representative of another party B. An agent always has a fiduciary duty to defend the claimant C. An agent may represent more than one party D. An agent's actions are construed as those of the party she represents

B. An agent always has a fiduciary duty to defend the claimant

After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that estimate. Bob had _____ because Acme Insurance accepted his estimate and paid Jane's claim. A. Agency authority B. Apparent authority C. Express authority D. Expert authority

B. Apparent authority

Which of the following is NOT a duty of a captive agent? A. Representing the insurer B. Negotiating settlements C. Selling insurance policies D. Servicing policies

B. Negotiating settlements

Which of the following statements is NOT true of an insurance adjuster? A. An insurance adjuster who settles claims on behalf of an insurer has the power to bind that insurer, even if she makes a mistake B. An insurance adjuster is an agent C. An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract D. An insurance adjuster must always use reasonable judgment for both the insurer and the claimant

C. An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract

Tom is looking for a job in the insurance industry. He wants to work for only one insurance company, selling policies on commission basis. Which type of insurance agent position best fits what Tom is looking for? A. General agent B. Direct writer C. Captive agent D. Independent agent

C. Captive agent

James signed a contract with XYZ Insurance that enables him to sell insurance policies and collect premiums on their behalf. What authority has James been granted? A. Implied authority B. Full authority C. Express authority D. Apparent authority

C. Express authority

Define: Exclusive agent (captive agent)

Commissioned; offers products from only one insurer

_____ authority is what the public reasonably believes the agent has, based on the agent's representations. A. Contract B. Apparent C. Express D. Impied

D. Implied

William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The walk-in customer could reasonably believe that he has the authority to write an insurance contract because of his: A. Apparent authority B. Express authority C. Agent authority D. Implied authority

D. Implied authority

Susan calls herself an insurance broker. She sells multiple lines of insurance from a variety of insurance companies. What type of agent is Susan? A. Direct writer B. General agent C. Captive agent D. Independent sales agent

D. Independent sales agent

Jake is selling insurance policies for XYZ Insurance. Olivia buys a homeowners policy from Jake and asks him to write down on a separate piece of paper all the perils the policy covers so she can show her husband. Jake writes "hail," but when Olivia's house is damaged by hail, the adjuster says "hail isn't covered in your policy." Olivia produces the piece of paper and threatens to sue XYZ Insurance if they don't pay. Does she have grounds for a lawsuit? Why or why not? A. No; Jake was unaware of the policy's hail coverage exclusion B. Yes; hail coverage is standard in property policies, and the insurer should have included it in the first place C. No; Jake had no authority to promise coverage that was not listed in Olivia's policy D. Yes; Jake exercised implied authority when he wrote that Olivia had hail coverage

D. Yes; Jake exercised implied authority when he wrote that Olivia had hail coverage

What are the 3 types of authority?

Express authority implied authority apparent authority

Define: Express authority

Given in writing within the agent's contract

Define: Apparent authority

Granted when the insurer does not stop the agent from acting in a certain way, even when those actions do not adhere to the authority granted in the contract

Define: Implied authority

Reasonable for public to believe, not expressly granted in writing

Define: Agent

Receives the authority to act on behalf of another

Define: Direct writer

Salaried employee; works for one company

Define: Independent agent

Self-employed; sells insurance from many insurers

Define: General agent

Trains and supervises exclusive agents for an insurer