CMFAS M9 Insurance Contract & Law of Agency question: agent's fiduciary duty

CMFAS M9Insurance Contract & Law of Agency

An agent's fiduciary duty 'not to delegate his authority' means that the agent:

A May appoint a sub-agent freely, provided he tells the client who will serve them
B Must not pass his authority to another, as the principal chose him personally
C Must delegate routine servicing work to junior colleagues so that clients are served efficiently
D May delegate premium collection and policy servicing, but not the sale itself

Show the answer and explanation

Answer: B. Must not pass his authority to another, as the principal chose him personally

Among an agent's fiduciary duties is the duty not to delegate authority: because the principal selected the agent personally, the agent must not pass the entrusted authority to another. Other fiduciary duties include avoiding conflicts of interest and not accepting bribes or secret commissions.

Common mistake

Delegation is a breach, not an efficiency measure — the principal chose this particular agent to act.

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CMFAS M9 Insurance Contract & Law of Agency question: agent's fiduciary duty

Answer: B. Must not pass his authority to another, as the principal chose him personally

Common mistake

Related CMFAS M9 questions

CMFAS M9 Insurance Contract & Law of Agency question: agent's fiduciary duty

Answer: B. Must not pass his authority to another, as the principal chose him personally

Common mistake

Related CMFAS M9 questions