-->Section 182 of the Indian Contract Act defines the words ‘Agent’ and ‘Principal’.

-->An agent is a person employed to do any act for another or to represent another in dealing with a third person.
-->The person for whom such act is done or who is so represented is called the ‘Principal’.

DEFINITION OF AN AGENT in Insurance Regulations

In Insurance industry the term ‘Agent’ is ordinarily applied to a person engaged by the insurer to procure new business.

Principle of Agency

-->The rule as to agency is expressed in maxim “Qui facit alium, facit perse’ i.e. one, who acts through others, acts to himself.

-->Therefore, contracts entered into through an agent and obligations arising from acts done by an agent, may be enforced in the same manner and will have the same legal consequences, as if the contracts have been entered into and the acts done by the principal himself.

Who can act as an Agent ?

-->Under Section 183 of the Act,
(a) any person who is of the age of majority
according to the law to which he is subject
and
(b) who is of sound mind can employ an agent.

-->Section 184 provides that as between the principal and third persons, any person may become an agent.

Can a Minor act as an Agent ?

-->Though a minor may be employed as an agent ; the principal would be bound by his act, the minor himself will not be liable to his principal.

-->No consideration is necessary to create an agency.

Authority to act as an Agent

-->An agent can act only to the extent of authority granted to him by the principal.

-->This authority may be expressed or implied.

-->An authority is said to be expressed when it is given by words, spoken or written. It is implied when it is to be inferred from the circumstances of the case.

Persons to whom license will not be issued

(A)Minor.
(B)Person of unsound mind.
(C)Person found to be guilty of criminal misappropriation or breach of trust, cheating or forgery.
(D)Person found guilty of knowingly participating in or conniving at any fraud against an insurer or an insured.
(E)Person not possessing the requisite qualification and specified training.
(F)Person who has not passed the specified examination.
(G)Person found violating the code of conduct specified by the Regulations.

LIFE INSURANCE AGENT



-->An insurance agent has been defined by the Insurance Act, 1938, as one who is licensed under that Act and is paid in consideration of his soliciting or procuring insurance business, including business relating to the continuance, renewal or revival of policies of insurance.

-->The L.I.C. does no authorize its agents to collect premia (except first premium along with the proposal) or other amount from policyholders.

-->But if the agent collects such amounts, remits to the insurer, gets receipts to be handed over back to the policyholder, implied authority can be inferred or construed.

-->The LIC’s stand has been that LIC’s agents cannot collect renewal a premium has been upheld by court judgments.

-->Other insurance companies in India may not follow L.I.C.’s practice. They may grant more or less authority.