Insurance Act, 1989

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Provisions regarding scope of agency.

51.—(1) An insurance agent shall be deemed to be acting as the agent of the undertaking to whom a proposal for insurance is being made when, for the purpose of the formation of the insurance contract, he completes in his own hand or helps the proposer of an insurance policy to complete a proposal for insurance. In such circumstances only, the insurer shall be responsible for any errors or omissions in the completed proposal.

(2) An undertaking shall be responsible for any act or omission of its tied insurance agent in respect of any matter pertaining to a contract of insurance offered or issued by that undertaking, as if the tied insurance agent was an employee of that undertaking.

(3) In this section—

“tied insurance agent” means any person who enters into an agreement or arrangement with an undertaking whereby that person undertakes to refer all proposals of insurance to the undertaking with whom he has made or entered into the agreement or arrangement, or any person who enters into an agreement or arrangement with an undertaking which restricts in any way that person's freedom to refer proposals of insurance to an undertaking other than the undertaking with whom the agreement or arrangement has been made or entered into;

“tied agency agreement or arrangement” means an agreement or arrangement of the type described in this section.

(4) Nothing in this section shall render an insurance agent or a tied insurance agent responsible for any false statements supplied to him by the proposer of an insurance policy or for any information withheld by the proposer from such agent.