Insurance Glossary

Agency

A relationship in which one person is authorized to represent and act for another person, or for a corporation

Agent

The person authorized to act on behalf of the other

Principal

The person on whose behalf the agent acts

Law of Agency

Contracts made by the agent are considered to be contracts of the principal. The principal is liable for the statements and actions of their agents.

Express

authority written in the agent contract

Implied

Authority not written in a contract, but authority is assumed to be granted

Apparent

authority others believe the agent has

Fiduciary

A person in a position of financial trust

Commingling

The illegal act of mixing personal funds with the insured’s or the insurer’s funds

Suitability Considerations

only making purchase recommendations that are appropriate or suitable for each individual client