14.2.3 Agency of Producers.

• Jurisdiction: Arizona

14.2.3 Agency of Producers. There is an important agency law difference between insurance producers who act only as agents for a particular insurer in selling its policies and those who can represent the insured in selecting coverage from a number of different companies.³² The first category, often referred to as “captive agents,” are authorized representatives of the insurer whose acts are imputable to the insurer.³³ The second category of insurance producers, typically known as “independent agents” or “brokers,” are generally authorized to act only for the insured in procuring coverage.³⁴

However, where an insurer’s actions create actual or apparent authority for such “independent agents” or “brokers” to act on its behalf, they may then also be considered the insurer’s agents.³⁵ For example, insurers may enter into agreements with “independent agents” or “brokers” giving them authority to bind the insurer to provide coverage, subject to the applicant meeting necessary underwriting criteria.³⁶ Thus, where coverage is bound by the producer within the authority granted by the insurer for an eligible applicant, the insurer will be required to provide the requested coverage.³⁷ Because the distinction between “agent” and “broker” does not depend on “title or license,” a factual inquiry may...