According to the California Insurance Code, an 'insurance broker' is 1. authorized by an insurer to transact insurance. 2. employed to assist an insurance agent in transacting insu... According to the California Insurance Code, an 'insurance broker' is 1. authorized by an insurer to transact insurance. 2. employed to assist an insurance agent in transacting insurance. 3. hired by an insured to give advice about insurance transactions. 4. compensated for transacting insurance on behalf of another person with an insurer.
Understand the Problem
The question is presenting multiple choice questions related to insurance principles and regulations in California, testing knowledge of definitions, concepts, and legal requirements.
Answer
4. compensated for transacting insurance on behalf of another person with an insurer.
- compensated for transacting insurance on behalf of another person with an insurer.
Answer for screen readers
- compensated for transacting insurance on behalf of another person with an insurer.
More Information
According to the California Insurance Code, an insurance broker is defined as a person who, for compensation and on behalf of another person, transacts insurance with, but not on behalf of, an admitted insurer. This definition excludes life, disability, or health insurance transactions.
Tips
A common mistake is to confuse the roles of an insurance broker and an insurance agent. An insurance agent acts on behalf of an insurer, while a broker acts on behalf of the insured.
Sources
- California Insurance Code Section 1623 - codes.findlaw.com
- Authorizing Act with Definitions - California Department of Insurance - insurance.ca.gov
- Law Defining 'Agents' and 'Brokers' - insurance.ca.gov
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