Broker

The agent represents the insurer, while the broker represents the insured — An agent is appointed by and represents the insurer, with authority to solicit business on the insurer's behalf; the agent's acts within the scope of that authority bind the insurer. A broker represents the insured and places coverage with the insurer that best fits the client's needs, owing duties to the client rather than to any particular insurer. This allegiance is the core distinction taught throughout insurance licensing: agency runs to the insurer, brokerage runs to the customer. In the life and health field, California producers act as agents of insurers, so applicants should understand that the producer they meet is presenting the insurer's products and is accountable under the insurer's authority.

National insurance concept

the insurer — In California, life and health insurance is transacted by agents, and when a broker solicits a life insurance policy, the broker acts as the agent of the insurer for that transaction. The general common-law distinction, that an agent represents the insurer while a broker represents the insured, is adjusted in life insurance because the entire transaction is conducted on the insurer's behalf. This matters for authority and liability: the broker's acts in soliciting the policy are attributed to the insurer, consistent with the way life insurance business is structured in California. The identity of the policyowner does not change which party the broker represents, and the Department of Insurance is a regulator, not a principal.

CA-specific example