The Law Pertaining to the Agent
Life insurance being written almost exclusively by corporations, in most
instances transacting business in many states, the agent is a necessary
factor in the successful prosecution of the business. It is also apparent
that if the agent is to perform properly the duties connected with the solicitation
of business on behalf of his employer he must be given a certain amount
of authority. To govern his relations with the company and the public, there
was to begin with the general law of agency. But there has since developed
a large body of statute and court law dealing with insurance agents in particular,
and it is from this law that we are able to comprehend the status of the
It is a general rule of law that the position of agent carries with it
authority to do and say those things and use those means which are appropriate
to the proper fulfillment of the services which he is employed to render.
Almost invariably the company gives its agents a written commission defining
their authority. But the absence of such written authority does not relieve
the company of responsibility for the conduct of those who are in reality
its agents, because to hold otherwise would enable the insurer at any time
to avoid all responsibility for the misconduct or errors of its agents by
simply sending them into the field without written authority. Agency is
a fact depending on circumstances independent of any provisions that may
exist in the policy or application, and in cases where the question has
come up for decision the courts have outlined the evidence that may be considered
as proof establishing the fact and character of the agency. This evidence
may consist of an express contract between the company and agent, as already
stated, or a recognition by the company that a certain person is its agent.
Again, the fact and character of the agency may be shown by the possession
of certain papers or by other evidence from which agency may be legally
inferred. It is important, however, to note that the insured must not presume
the existence of the agency relationship, but must satisfy himself of it
and the extent of its character by some tangible evidence.
Sections in Chapter 32.