California Insurance Code & EthicsQuestion 37 of 158
Which statement best captures the legal distinction between an 'insurance agent' and an 'insurance broker' under California law?
a.An agent represents the insured; a broker represents the insurer
b.An agent represents the insurer; a broker represents the insured
c.Both represent the insurer equally
d.The terms are interchangeable in personal lines
Explanation
Insurance Code §31 defines an insurance agent as a person authorized to transact insurance on behalf of an insurer (representing the insurer). Section 33 defines a broker as a person who, for compensation, transacts insurance on behalf of another (representing the insured). The fiduciary relationship therefore differs in important ways.
Law Reference: Cal. Ins. Code §31, §33Practice all 158 questions free — no signup required.
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