Life & Health · Chapter 20 · Marketing Rules
Agent Not Liable for Insurer Insolvency
Definition
A licensed and appointed agent who sells a policy cannot be held liable to the insured — and no cause of action arises against them — when the insurer later becomes insolvent, PROVIDED the insurer was properly authorized and approved to transact insurance in Florida when the policy was sold. The shield disappears for policies issued by an unauthorized insurer — the agent MAY be held liable for those.
In plain English
Sell for an admitted company that later fails: not your fault. Sell for an unauthorized one: their failure becomes your lawsuit.
Exam tip
The pivot word is authorized. Check whether the question's insurer held a certificate of authority at the time of sale.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms