Law of Agency Flashcards
Define what is an “agent”?
An agent is a person who has the authority or power to act on behalf of another person known as the “principal”.
What does the FSA define “Insurance Agent” as?
“solicits or obtains a proposal for insurance on behalf of an insurer;
offers or assumes to act on behalf of an insurer in negotiating a policy; or
does any other act on behalf of an insurer in relation to the issuance, renewal or continuance of a policy”
What are the three main ways of “The relationship between principal and the agent”?
AGENCY BY AGREEMENT
AGENCY BY RATIFICATION
AGENCY BY NECESSITY
Define what is “Agency by Agreement”?
A legal contract creating a fiduciary relationship. The first party (principal) agrees that the action of the second party (the agent) binds the principal to later agreements made by the agent.
Agency created via an agreement may be form of implied authority .
Define what is “Agency by ratification”?
An agency is created retrospectively by ratification where the agent does not have actual authority, an agent who exceeds his authority can have his acts adopted if the principal wishes to.
Define what is “Agency by necessity”?
An agent by necessity makes a critical decision on behalf of another party who is not in a condition to do so.
How are insurance agencies created in Malaysia?
Through appointment by express agreement, by execution of written contract.
