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An Insurance Agent’s Responsibilities

When you speak with an insurance agent, you trust that he or she will act in your best interest. Under state and federal regulations, government bodies obligate insurance brokers to act in your best interest, if you are an insurance purchaser. Depending on their state, insurance agents must uphold a certain set of responsibilities to remain in good standing.

Arizona-Specific Regulations

All Arizona insurance brokers must abide by certain regulations set forth by the Department of Insurance. The state defines an insurance broker as a producer who works on behalf of an individual buying insurance. In addition, Arizona defines an insurance agent as a producer who works on behalf of a company. Most insurance producers must have a license to sell, negotiate, or solicit insurance in Arizona.

To qualify for an individual insurance license, insurance producers must meet the following requirements:

  • Be at least 18 years old
  • Pass an Arizona insurance exam
  • Provide fingerprints
  • Provide proof of citizenship or United States residency
  • Pay required fees
  • Submit a completed license application

Federal Regulations

Certain regulations govern all states’ insurance agents and brokers. All states require insurance producers to obtain licenses to lawfully sell insurance. Different states may offer different licensing options; in Arizona, an insurance producer can apply for an individual license or a company license.

Insurance producers have to adhere to the following responsibilities to remain in good standing with state and federal agencies, as well as insurance oversight boards.

  • Your insurance producer must help you obtain the right insurance plan.
  • Your insurance producer must explain the coverage available to you and make recommendations based on your individual needs.
  • Your insurance broker must obtain the insurance plan you request.
  • If your producer is unable to obtain the exact coverage you want, he or she must explain why the exact coverage is unavailable and what your amended plan covers.
  • Your producer must notify you if he or she becomes aware that the company will cancel your plan in the future.
  • In some cases, your producer must warn you if your insurance company experiences financial struggle.
  • Your producer must place your insurance in the care of a company that is financially sound to the best of his or her knowledge.

While insurance producers must adhere to these duties, they do not have to provide certain responsibilities. For example, your insurance producer cannot anticipate all the risks that you may encounter and cannot provide advice on them.

Signs of Agent Error and Fraud

Most insurance producers are in good standing with state and federal regulations and follow their legal obligations. However, insurance agent error and fraud are still prevalent within the industry. A few telltale signs can tell you if your insurance producer is acting in a dishonest or negligent manner.

  • Your insurance provider automatically gives you uninsured motorist coverage without your consent.
  • Your insurance producer sells you a policy that does not cover your situation, but marketed the plan as a solution to your problems.
  • Your insurance agent provides incorrect information on your insurance application and you lose benefits.
  • Your producer collects monthly premiums on your behalf, but you do not have a policy.
  • Your insurance company canceled your plan and you do not receive a refund for your premium, although the company issued a check.
  • Your producer states that he or she is holding on to your plan for “safekeeping.”
  • Your producer urges or pressures you to invest in something that you do not want to, but he or she stresses that the opportunity is too great to let pass.
  • Your producer tells you to lie on your insurance application.
  • Your insurance producer does not communicate to you if your policy changes or adds additional coverage that you do not need.
  • Your producer sells you a policy from an insurer that does not seem to exist, even through significant internet research.

If you believe an insurance producer performed an egregious error or engaged in fraud, contact an insurance attorney as soon as possible.