Question

Brokers differ from insurance agents in that ____

(A) brokers are compensated by their clients on a fee basis, while agents receive a commission from the company
(B) brokers are not agents of the company, and therefore cannot bind the company
(C) brokers operate primarily in the life insurance field, while agents operate in both the life insurance field and the property and liability field
(D) agents may bind the company orally, while brokers have the authority to bind only in writing.
(E) none of the above.

Answer 1

Answer: Option A

Explanation: A broker refers to a person or a firm who charges fees from the investors for executing their purchase and sale transactions. The broker sometimes also charge their customers for their consultancy services.

Whereas insurance agents refers to the person who sell the insurance policies to the general public and in return gets commission from the insurance company on the premiums paid by the insured.

Hence from the above we can conclude that the correct option is A.