Minnesota State Insurance Licensing Exam Study Guide | 350 Questions with 100% Correct Answers | Verified | Latest Update 2024

What is an agent? - Someone who acts on behalf of another (producer) What is a principal? - Party for whom action is taken (insurance company) What is an agency agreement? - Legal agreement that establishes the relationship between the principal and agent; outlines powers and responsibilities of agents. What is Express authority? - Powers given to agent as part of agency agreement(written) What is implied authority? - Powers not given by the agency agreement, but necessary to complete the functions allowed in the agency agreement What is apparent authority? - 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? - 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? - Individual states, not federal gov, responsible for regulating insurance industry