Alberta General Insurance Level 1 Practice Exam

What distinguishes independent agents from employed agents in intermediary functions?

1. Independent agents provide full producer services

2. Employed agents handle claims and loss control

3. Independent agents can handle limited claims

4. Employed agents work on a case-by-case basis

The correct answer is: Independent agents can handle limited claims

Independent agents and employed agents are both types of insurance agents who serve as intermediaries between the insurance company and the customer. However, the main difference between them is that independent agents have the ability to handle limited claims, while employed agents do not. This means that independent agents have more control and flexibility in their role, as they can assist customers with the claims process to some extent. On the other hand, employed agents mainly focus on selling insurance policies and may not have the authority to handle claims or loss control. Option A is incorrect because employed agents also provide producer services, albeit to a limited extent. Option B is incorrect because handled claims and loss control is not the defining factor for employed agents. Option D is incorrect because employed agents typically work for a specific insurance company and handle all of their cases, rather than on a case-by-case basis.