QuestionsQuestions (IC INSURANCE CIRCULAR LETTER NO. 11-94 CL)
By reference to Section 301 of the Insurance Code, an insurance broker represents the insured.
It mentions tacit consent or consent by special power of attorney or other instruments permitting the broker to issue policies on the company’s behalf.
When it allows an insurance broker to issue policies either tacitly or by a special power of attorney or other instruments, thereby permitting the broker to issue policies in its behalf.
When the broker issues policies with the consent of the insurance company.
After notice and hearing, it states that such act shall be sufficient cause for the suspension or revocation of their certificates of authority.
Notice and hearing.
It refers to the official authority granted by the insurance regulator (the Insurance Commission) to insurance entities (and related authorized persons) to operate; suspension or revocation affects their legal permission to transact.
It positions brokers as representatives of the insured who cannot issue policies or involve themselves in the policy issuance process; issuance is reserved for insurance companies and certain general agents.
It anchors the prohibition on broker policy issuance in the statutory definition and role of brokers under Section 301—brokers represent insureds and thus do not have the authority to issue policies.
The Circular indicates that tacit consent is enough: if the company allows the broker to issue policies tacitly, both are deemed to have violated the Insurance Code subject to notice and hearing.
To enforce regulatory control over who can bind insurance coverage via policy issuance, ensuring that only authorized entities participate in the issuance process and preventing unauthorized acts by brokers.