State RegulationsFL specificDifficulty 3/5
In the fiduciary relationship created by handling insurance funds, a Florida agent owes duties of loyalty and faithful accounting to
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Chapter 626, Florida Statutes, the fiduciary capacity runs to the parties whose money and interests are entrusted to the agent - both the insured, from whom premiums are collected, and the insurer, to whom they must be delivered. The agent must act loyally and account faithfully to each of them, and DFS disciplines agents who breach that dual trust.
Why the other options are wrong
- A) The insured's funds are equally entrusted to the agent; the duty of loyalty is not owed to the insurer alone.
- B) The insurer is just as much a principal; its premiums and policy obligations are involved in the relationship.
- C) DFS is the regulator that enforces the duty when it is breached, not the party to whom the duty is owed.
Memory hook
Two bosses in trust: the insured who pays and the insurer who's owed.