Life insurance agency

Because contracts of insurance are binding and enforceable, certain legal concepts extend to those who bring together the contract parties: the applicant and the insurer. In most cases, bringing the parties together is done by an agent or broker. An agent is an individual who has been authorized by an insurer to be its representative to the public and to offer its goods and services. Specifically, this role entails: describing the company’s insurance policies to individuals and explaining the conditions under which the policies may be obtained; soliciting applications for insurance; and rendering service to prospects and to those who have purchased policies from the company. Implicit in this function is the concept of power — an authorized agent has the power to bind the principal to contracts, and to the rights and responsibilities of those contracts.

The authority of an agent to undertake these functions is clearly defined in a contract of agency, or agency agreement, between the agent and the company. Express authority is the authority a principal intends to, and actually does, give to its agent. Express authority is granted by means of the agent’s contract, which is the principal’s appointment of the agent to act on its behalf. For example, an agent has the express authority to solicit applications for insurance on behalf of the company. The significance of authority is that it ties the company to the acts and deeds of its agent. The law will view the agent and the company as one and the same when the agent acts within the scope of his authority. The acts of the agent, within the scope of his authority, are the acts of the principal. A contract completed by an agent on behalf of the principal is a contract of the principal.

In the visible church, God has appointed leaders to represent him in the administration of word and sacrament, to shepherd God’s people, protect the purity of the church, and spread the good news of the gospel (Matthew 16:19, 28:18-20, John 21:15-17, Acts 14:22-23, 20:28-31, Ephesians 4:11-16, I Timothy 5:17, Hebrews 13:7, 17). He promised, (Jeremiah 3:15) “I will give you shepherds after my own heart, who will feed you with knowledge and understanding.”

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Covenant theology