5/28/2008 4:54 PM New Brand FMT-P2_28May08 1

Marketing enables an insurance company to determine

which products meets customer needs and then to sell
and deliver those products to its customers. It is a
process of identifying customers and their needs and
then creating, pricing, promoting, selling and distributing
products or services to meet those needs.

A Producer is any person who sells insurance products
for an insurance company. However, agent, broker,
sales representative and other titles are also used to
denote special category of producer.


MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 2
The Legal Role of an Insurance Agent
Agency
Principal
Agent
Creation of the Agency Relationship
An Agency Contract or Agency Agreement
Responsibilities of the Agent to the Principal
Loyalty
Obedience
Reasonable Care
Accounting
Relaying Information

MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 3
Responsibilities of the Principal to the Agent
The Principals primary duty is to pay the agent for the
services performed.
The principal also has a duty to indemnify the agents
for any losses or damages suffered without the
agents fault but arising out of agents acts on behalf
of the principal.
An important factor involved in this duty is exposure of
insurance agents to Errors and Omissions claims,
which might arise from agents negligent action.


MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 4
Authority of Agents
Express Authority
Binding Authority (Binder Temporary Contract Written or Oral)
Implied Authority (Collection of Premiums)
Apparent Authority (Third Partys Reasonable Belief)
Insurance Marketing Systems
Independent Agency System (Independent Agent vs Broker,
MGAs)
Exclusive Agency System
Direct writing System (Sales Representatives)
Direct Response System
Mixed Marketing System
MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 5
Compensation of Producers
Sales Commissions
Contingent Commissions
Marketing Management
Producer Supervision
Marketing Representatives
Production Underwiters
Producer Motivation
Product Management and Development
MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 6
Regulation of Insurance Producers
Licensing Laws
Unfair Trade Practices Laws
Misrepresentation and false advertising
Tie-in-Sales
Rebating
Other deceptive practices

MARKETING
5/28/2008 4:54 PM New Brand FMT-P2_28May08 7


MARKETING