![]() ![]() The agreement is typically exhaustively negotiated because it contains many important terms including how commissions and premiums are handled, contingent profits, information sharing, and binding authority. This agency agreement is how insurance companies authorize brokers to represent them in dealing with the public. Once the agent has binding authority, they are legally allowed to sell policies on the insurer's behalf.īinding authority is usually outlined in the agency agreement between the insurance company and the intermediary (the broker). A binding authority is an agreement in which an insurer gives full authority to an agent (typically an insurance broker) to act on their behalf for the purpose of underwriting. ![]()
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