Insurance Broker Certification Practice Exam

In the agent-insurer relationship, who does the agent represent?

1. The insured

2. The insurer

3. The agency

4. The public

The correct answer is: The insurer

In the agent-insurer relationship, the agent primarily represents the insurer. This means the agent acts on behalf of the insurance company to sell and service insurance policies, manage claims, and execute the insurer's business strategies. The agent has a fiduciary duty to the insurer, meaning they must act in the best interests of the company, including adhering to its guidelines and promoting its products. The distinction of representation is crucial in understanding the dynamics of the insurance business, where the agent acts as a bridge between potential clients and the insurance provider. While agents may provide guidance and support to clients (the insured), their contractual obligations and overarching responsibility lie with the insurer. Therefore, they must prioritize the insurer's policies and procedures when conducting their business.