California Property & Casualty Broker-AgentGeneral InsuranceMedium
A producer holds a California property and casualty broker-agent license. Which of the following activities is this producer specifically authorized to perform?
- AAct as an insurer by underwriting risks directly.
- BTransact life insurance policies only.
- CBind property and casualty coverage on behalf of an insurer.
- DSell securities products such as mutual funds.
Show answer & explanationAnswer & explanation
Correct answer: C. Bind property and casualty coverage on behalf of an insurer.
A property and casualty broker-agent license authorizes the producer to transact all classes of P&C insurance. This includes the authority to bind coverage for an insurer, which means making the coverage effective immediately, subject to the insurer's underwriting rules.
Why the other options are wrong
- A. Producers are agents or brokers, not insurers; they cannot underwrite risks themselves.
- B. Life insurance requires a separate life agent license.
- D. Securities products require a separate securities license (e.g., FINRA Series 6 or 7).
P&C Broker-Agent Authority (CA)
A California Property and Casualty Broker-Agent is licensed to transact all lines of property and casualty insurance and can often bind coverage for insurers.
- Transacts P&C insurance.
- Can represent insurers (agent) or insureds (broker).
- Authority to bind coverage is common.
Memory trick: P&C agents connect clients to cover, making sure risks are properly covered.