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Agent and Insurer Relationship
The insurance company is the agent's principal and the agent acts on behalf of the principal.
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Captive Agent
An exclusive agent or direct writer that represents one company or several companies under the same management.
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Independent Agent
Represents several different insurers.
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Express Authority
Rights and powers of an agent explicitly provided in the agency contract.
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Implied Authority
Consists of those actions that may extend beyond the rights and powers explicitly provided in the contract. Example: using the phone to make sales appointments.
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Apparent Authority
Arises out of the impression the principal gives that the agent is authorized to act a certain way. Â Agent can be held directly responsible.
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To act in the best interests of the applicant or insured, the agent should
- Disclose all pertinent information concerning a proposed policy
- Not misrepresent the terms or conditions of a proposed policy
- And only make suitable recommendations—that is, recommendations that suit the customer's needs and situation.
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