International Styles

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 life-insurance agent.

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.

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