JeopardyAgency Law – Insurance Applications

Donna M. Kesot, CPCUCPCU 530

March 13, 2013

100 100 100 100

Contractual Rights

Insurance Application MiscellaneousParties

400400400

300 300 300

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300

400

C1 100 Question

Third party’s rights against an undisclosed principals are subject to two exceptions:

C1 100 AnswerWhat is: The principal’s liability is limited to the agent’s actual authority, except that a 3rd party cannot sue if:

1. The principal for payment under contract if the principal made a good-faith settlement on the account with the agent

2. the 3rd party expresses intention to hold the agent liable for the contract

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C1 200 Question

Undisclosed principal’s right against a third party are limited in these 4 circumstances.

C1 200 AnswerWhat is:1. Agent Fraud,2. Enforcement would impose a substantial

additional burden (“provide all that may be required”),

3. Contract specifies agent’s personal performance, and

4. In breach of contract suits a judgement against the agent destroys the undisclosed principal’s right of recovery against the 3rd party?

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C1 300 Question

These six situations create agent’s liability to a third party even when the principal is disclosed.

Daily Double

C1 300 AnswerWhat is:1. Agent breaches implied warranty of authority,

2. Agents acts on behalf of minor/mentally incompetent person and the 3rd party is unaware that the principal cannot contract,

3. Agent purported to act personally and did not disclose the principal,

4. Agent voluntarily guarantees performance of principal under the contract, and

5. Agent has no authority to collect money and does.

6. Agent is liable for fraudulent or malicious acts even under principal’s direction?

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C1 400 Question

Agent’s right against a third party

C1 400 AnswerWhat is the agent can assert: 1. Breach of contract when both agent and 3rd party agree the

contract obligates the agent,

2. Breach of contract when the principal is undisclosed (principal has superior right),

3. Personal defenses that the principal or agent performed the contract, that the 3rd party failed to perform, or that the statue of frauds or limitations precludes recovery, and

4. With disclosed/partially disclosed principal’s consent, the agent can assert the principal’s defenses against the 3rd party?

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C2 100 Question

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?

C2 100 Answer

Who is a special agent?

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C2 200 Question

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

C2 200 Answer

Who is a soliciting agent?

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C2 300 Question

An independent producer who represents insurance customers

C2 300 Answer

Who is a broker?

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C2 400 Question

An agent that transacts all of a principal’s business of a particular kind or in a particular place

C2 400 Answer

What is a general agent?

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C3 100 Question

Three ways to terminate producer authority

C3 100 Answer What is specified in the contract?

What is written or oral communication that severs the producer’s actual authority?

What is notifying all parties that the producer relationship has ended, plus collecting all application forms and stationary?

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C3 200 Question

Temporary oral or written policies

C3 200 Answer

What are binders?

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C3 300 Question

Imputed knowledge

C3 300 AnswerWhat is the insurer knew what the agent knew?

Any knowledge possessed by a general or special agent is considered to be possessed by that agent’s principal

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C3 400 Question

These six components are essential for insurance contracts

C3 400 Answer

What is:1. Subject matter of the insurance2. Loss exposures insured 3. Premium4. Insurance contract duration5. Coverage amount, and 6. Identities of parties?

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C4 100 Question

The liability of a principal who commits a tort against a third party

C4 100 Answer

What is direct liability?

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C4 200 Question

A wrongful act or an omission, other than breach of contract, that invades a legally protected right

C4 200 Answer

What is a tort?

See chapter 6

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C4 300 Question

Two types of producer authority

C4 300 Answer

What are:1. Actual authority (express or

implied) and2. Apparent authority?

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C4 400 Question

Three roles that vary producer’s authority

C4 400 Answer

What are: General agents (broadest authority) Special agent Broker

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