New Jersey Life Producer Law Practice Test

Which action can a producer acting as an agent NOT take?

1. Advise clients on insurance products

2. Sell insurance policies

3. Place insurance with a company the producer does not represent

4. Renew policies for clients

The correct answer is: Place insurance with a company the producer does not represent

A producer acting as an agent is typically authorized to represent a specific insurance company and sell its products. This relationship allows the agent to provide advice on insurance products, sell policies, and renew existing policies for clients, as these actions align with their role as a representative of the insurer. However, placing insurance with a company that the producer does not represent is outside the scope of an agent's authority. Agents are bound by the contracts they have with the companies they represent and cannot independently negotiate with or place business with other insurers without proper authorization. This restriction is in place to protect both clients and the integrity of the insurance market. Therefore, the inability to place insurance with an unrepresented company is an essential principle of agency in insurance law.