Insurance Law can

Agents and Brokers

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  Intermediaries: assessors, agents, brokers, adjusters… etc
  
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  Agent: typically sells insurance for one company
  
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    s.168: a person other than an insurance company that solicits, obtains or takes application for insurance, … or signs or delivers a policy and collects a premium
    
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  Broker: aren’t tied to one specific insurance company, sells any number of insurers products
  

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  Insurance may be sold directly from insurer to customer, but more common for insurance to be sold by agent/broker to customer
  
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    Usually law of agency applies to these transactions
    
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      Implied authority
      
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      Express authority
      
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      Apparent authority
      
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  Historically, court would have to determine whether an intermediary was acting for agent or customer, CL then determined that intermediary may act for both
  

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  There are several ways for insurer to be bound by actions of intermediary
  
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    Actual authority: insurer provides broker with written or oral assurance, the authority to sell some policy. Typically, terms of intermediary’s authority to act on behalf of insurer are included in an agreement made with the insurer
    
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    Implied authority: where job description allows broker to sell policy of various sorts, and add on certain endorsements or warranties, there is an unstated function
    
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    Apparent authority: where the intermediary appears to have the insurer’s authority to act on latter’s behalf
    
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      This appearance must arise from the conduct of the insurer itself, and not merely the actions of the intermediary
      
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      Whether or not particular evidence amounts to an indication of authority depends on how it would be perceived by “a prudent and ordinarily sagacious and experienced person”
      
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    Ratification: an intermediary may act to commit the insurer without authority to do so, and the insurer may ratify the action after the fact either by positive act or acquiescence
    

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  E.g. insurer hires adjuster as a representative, adjuster makes deal with claimant, claimant doesn’t like deal later and wants to back out, can’t back out since deal has been ratified
  
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  E.g. in insurance industry, have insurers overseas, have adjusters domestically to investigate claims, adjuster sent to look at damage caused to insurance lawyer, adjuster says they’ll hire restoration firm from out of town, all insurance money is used up and only 1/3 repairs made, owner then points out that restoration people hired for insurer rather than claimant, refer to s.13, in law adjuster is supposed to point out that they hire restorer person for claimant since indemnity policy is supposed to make up for repairs that claimant makes
  

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  When is a communication made to an intermediary, by either party, the equivalent of a direct communication to the other party?
  
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    Principal is deemed to have knowledge gained by an agent only if the agent gained it in the course of his/her duties, provided there has been time for the principle to hear it
    
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    Essentially, when the principal and third party are both innocent, the burden of the agent’s default falls on the principle since it is the party that is benefitting from the use of the agent
    
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      But if third party isn’t entirely blameless due to collusion, or through naivety, third party will suffer consequences of agent’s action
      
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  In classes of life, accident and sickness insurance, matter is resolved by statute in favour of customer: ss. 173, 212
  
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  In other classes of insurance, courts will resolve problem by examining authority intermediary gives the insurer
  
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    e.g. if insurer requires, through company policy, that broker fills out application forms and error is in the form, insurer cannot invoke misrepresentation to deny the claim
    
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    Same logic applies when broker is given authority to finalise contracts on behalf of the insurer
    
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      Broker has implied authority to receive and evaluate info relevant to deciding whether to accept or reject contract
      
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      In this context, transmitting info to insurer is a mere formality
      

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  Where an intermediary has no authority to bind the insurer or receive info on the insurer’s behalf, intermediary will be held to act for the customer so that errors are ascribed to the latter
  
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  Where a customer has signed a form containing erroneous info, if customer supplied accurate info and intermediary mistakenly recorded it, a misrepresentation will have emanated from the customer
  

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  Intermediaries are susceptible to liability for making personal mistakes, whereas employee of insurance company will not be liable personally
  
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    E.g. adjuster can be personally liable for something if they step out of bounds of their authority
    

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  Warranty of authority: if a person holds themselves out as having authority to act on behalf of someone else, they are accountable to anyone relying on their representation
  
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    There must be a causal connection between the erroneous assertion of authority and the loss suffered
    
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  Liability may be imposed on intermediary through contract, but there must be consideration exchanged in order for there to be a contract
  
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    E.g. customer pays premium to insurance company, valuable consideration is that customer is providing broker an opportunity to earn commission, this is enough to create contractual relationship between customer and broker, and broker promises to provide the service of obtaining coverage for the customer