Under Florida law, the general rule is that an independent insurance agent or broker acts on behalf of the insured. Thus, an insurance company who issues a policy will not have liability for the acts of an independent insurance agent or broker who sold the policy. However, there are several exceptions to this general rule, particularly in the context of the sale of life insurance and annuity contracts. This issue - whether the insurance company may be liable for the acts of an independent insurance agent or broker - frequently arises when the independent insurance agent or broker may have liability for the alleged wrong, but is either insolvent or failed to maintain liability insurance coverage for the alleged claims.
There are several ways that an independent insurance agent or broker may become an agent for an insurance company:
- By contract. An insurance agent or broker may become a licensee or an agent of insurance company by the operation of language found in contracts between the agent or broker, on the one hand, and the insurance company, on the other.
- By appointment with the State of Florida. Under Florida's Licensing Procedure Law, an insurance company is considered an appointing entity. An insurance company may file an appointment with the State of Florida pursuant to which an insurance agent or broker serves as a licensee or an agent for the insurance company. Pursuant to Florida’s Licensing Procedures Law, by authorizing an appointment for a licensee or an agent, the insurance company thereby certifies (1) that an investigation of the licensee has been made and that in the appointing entity’s opinion and to the best of its knowledge and belief, the licensee is of good moral character and reputation, and is fit to engage in the insurance business, and (2) that it is willing to be bound by the acts of the agent within the scope of the licensee’s appointment.
- By statute. Even if an insurance company does not file an appointment with the State of Florida for a particular insurance agent or broker, an insurance agent or broker may be considered an agent for the insurance company if the insurance company provides the insurance agent or broker with sales documents, such as blank forms, applications, marketing materials and other supplies that are used by the insurance agent or broker for the solicitation, promotion, and sale of life insurance and annuity contracts, and/or issues account statements, transaction confirmations, and letters that expressly or implicitly identify the insurance agent or broker as an agent for the insurance company. If so, pursuant to Florida’s Licensing Procedures Law, an insurance company may be subject to civil liability to its insureds, to the same extent and manner as if the insurance agent or broker had been formally appointed or authorized by the insurance company to act on its behalf.
- By course of dealing. An insurance company may put the insurance agent or broker in a position that enables the agent or broker to provide investment advice, account maintenance, and account management for the insured's life insurance and annuity contracts, based on which it may be reasonable for the insured to infer that the agent or broker could deal with a customer's accounts, assist a customer with withdrawing funds from annuities and depositing funds into annuities, advise a customer concerning the manner in which funds should be withdrawn and deposited, and recommend different investment options. Thus, under Florida law, the particular words and conduct of an agent, broker, and insurance company may cause an insured to justifiably and reasonably believe that the agent or broker was an agent of and had authority to act for the insurance company, thereby allowing an insured to reasonably rely on the agent or broker's apparent authority to act on behalf of the insurance company.
Over the past 16 years, Joel Ewusiak has represented numerous clients in cases involving allegations that an independent insurance agent or broker has acted on behalf of an insurance company, rather than on behalf of an insured. Please contact Joel for legal assistance with your particular matter.