Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
CPCU 530 Chapter 8
Agency Law: Insurance Applications
| Term | Definition |
|---|---|
| Insurance producer | any of several kinds of insurance personnel who place insurance business with insurers and who represent either insurers or insureds, or both |
| Insurance agent | a legal representative of one or more insurers for which the representative has a contractual agreement to sell insurance |
| General agent | an agent that transacts all of a principal's business of a particular kind or in a particular place |
| Special agent | a person or an entity that is employed to act for the principal in a specific transaction or only for a particular purpose or class of work |
| Soliciting agent | an insurance producer whose authority is limited by contract with an insurer to soliciting applications for insurance and performing other acts directly incident to those activities |
| Broker | an independent producer who represents insurance customers |
| Two types of producer authority | actual authority and apparent authority |
| Powers of general agent | broad powers within underwriting guidelines; solicits applications for insurance; receives premiums; issues and renews policies; appoints subagents; adjusts losses in some cases |
| Powers of special agent | authority restricted by express agreement w/insurer; induces 3rd parties to apply for ins; forwards applications to insurer; delivers policies to insured; inspecting property, quoting rates, collecting premium, assisting w/changes in coverage |
| Powers of soliciting agent | narrow authority derived directly from the agency contract; solicits applications for insurance; forwards applications to the insurer |
| Actual authority | the principal (insurer) intentionally confers upon the producer or allows the producer to believe he/she possesses |
| Express authority | states the producer's powers and authority and specifies any restrictions on that authority |
| Apparent authority | a third party's assumptions regarding an agent's authority |
| Broker's duties | to procure insurance for the insurance customer-principal; select the insurer to provide the desired coverage; to arrange payment of premiums; to cancel & receive unearned premiums on a policy broker has obtained; obtain a new policy upon cancellation |
| Circumstances a court might not bind an insurer by a producer's knowledge | when no actual agency relationship exists between the producer and the insurer; and when the agent has supplied false information |
| Two most common legal issues regarding oral and temporary insurance contracts | a producer's lack of authority to form the contract; a producer's failure to designate which insurer was to be bound by the oral or temporary contract |
| Safest way to avoid possible adverse consequences of apparent authority is for the insurer to take these actions: | notify all third parties known to have dealt with the producer; repossess from the producer any evidence of the agency relationship, such as application forms and insurer stationery |
| Five duties producers owe their customers | duty to follow instructions; duty to procure insurance; duty to maintain coverage; duty to place insurance with a solvent insurer; duty to advise |
| Five defenses available to the producer | the producer assumed no duty to the customer; the producer did not breach a duty to the customer; the insurance customer was partly at fault; the insurance customer failed to read the policy; insurance was not available to the customer |
| Producer has four duties to the insurer | duty to disclose risks; duty to follow instructions; duties of loyalty and accounting; duty to transmit information properly |
Created by:
CHahnCPCU