Sample Solution

The general rules of agency are a set of guidelines that govern the actions of agents and their relationship with insureds. The rules govern how agents must conduct themselves when dealing with customers, as well as the duties they owe to consumers and insurance companies.

Agency is a fiduciary relationship between an agent—who represents an insurance company—and an insured, which requires honesty, fairness, trustworthiness and loyalty by both parties. Agents should provide accurate information about products or services on offer, answer customer inquiries honestly and in a timely manner, act in good faith when recommending products or services best suited to meet customer needs, exercise care while handling confidential information shared by customers during the course of business transactions and make all efforts to resolve disputes amicably.

Agents owe certain duties to insurance companies too: they have an obligation to ensure premium payments; submit claims on behalf of policyholders accurately for consideration; follow instructions from insurers faithfully; protect confidential information obtained from insurers; avoid conflicts of interest; remain loyal to one insurer at any given time (no poaching); inform customers about changes in policies due for renewal/cancellation etc.; collect premiums regularly; comply with laws applicable to brokers/agents etc.

Insurance contracts consist of several basic parts: coverage provided under the policy including amount covered and exclusions (what’s not covered); deductibles paid by policyholder (if any); premium payable by customer along with payment schedule; length/term offered under contract i.e., duration till which it stays valid (or can be renewed annually); right to cancel agreement anytime if either party fails to meet contractual obligations laid out clearly in document such as paying premiums on time etc.; rights granted exclusively only through this specific contract like warranties against damages caused due negligence etc.; legal remedies available if there’s breach of contract/ non-performance by either side & finally declarations made by both parties prior signing up agreement detailing their respective roles throughout lifespan this agreement exists(including issue like who owns what).  These parts form some fundamental components necessary for making valid agreements between individuals or organizations concerning goods /services exchangeable based upon particular terms agreed mutually beforehand .

References:   Maharaj A., 2019 . What Are The General Rules Of Agency? [online] Available at: [Accessed 3 April 2021]. Insurance Information Institute , 2021 . Parts Of An Insurance Contract[online] Available at :< -insurance -contract > [Accessed 3 April 2021]

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