Final answer:
The statement in the question is false. Agents typically represent the insurer, while brokers represent the insurance buyer and may also deal with the insurer. Their roles and obligations differ based on their representation.
Step-by-step explanation:
The difference between a broker and an agent in the context of insurance is a common point of confusion. An agent is someone who represents an insurer and acts as the insurer's representative to the policyholder. On the other hand, a broker represents the insurance buyer and shops around for insurance policies that best meet the client's needs. In some cases, brokers may also represent the insurance provider, but their primary obligation is to the insured, the client. Therefore, the statement is false; it is not correct to say that a broker legally represents the company only. Both agents and brokers must be licensed to sell insurance, but their duties and loyalties differ based on whom they represent.