Minnesota State Insurance Licensing Exam

What is an agent? Correct Answers Someone who acts on behalf of another (producer) What is a principal? Correct Answers Party for whom action is taken (insurance company) What is an agency agreement? Correct Answers Legal agreement that establishes the relationship between the principal and agent; outlines powers and responsibilities of agents. What is Express authority? Correct Answers Powers given to agent as part of agency agreement(written) What is implied authority? Correct Answers Powers not given by the agency agreement, but necessary to complete the functions allowed in the agency agreement What is apparent authority? Correct Answers Powers not given by the agency agreement, but that a reasonable person would presume the agent has (between you and consumer) What are producer responsibilities? Correct Answers 1. Have a fiduciary (trust) responsibility to the insurer. Means the producer must always protect insurer's interests and follow any lawful instructions from the insurer 2. Must also uphold high standards of commercial honor when dealing w/applicant. Must act fairly and honestly, and disclose all info needed by the applicant to make well-informed buying decision. What is the McCarran-Ferguson Act? Correct Answers Individual states, not federal gov, responsible for regulating insurance industry. Who oversee the MN insurance industry? Correct Answers Department of Commerce Who direct the dept of commerce? Correct Answers Headed by commissioner of commerce who is appointed by the governor What does the Dept of Commerce do? Correct Answers -Enforces all MN insurance laws