8-1 INTRODUCTION

The general law of agency applies to the agents of insurers.1 The onus of proving that a person acted as agent of an insurer is on the person alleging it, except to the extent that the Consumer Insurance (Disclosure and Representations) Act 2012 provides rules for determining whether, for the purposes of that Act only, an agent through whom an insurance contract is effected is the agent of the consumer or of the insurer.2 In the world of insurance, where there may be many links in a chain between the one who suffers loss and the one who is asked to pay, this may be a matter of complexity.3 In addition to the general law of agency, selling insurance and contracting insurance are “regulated activities” under the Financial Services and Markets Act 2000 and persons who do such things are regulated by rules drawn up by the Financial Conduct Authority (FCA) in the case of pure agents and by both the FCA and the Prudential Regulation Authority (PRA) in the case of insurers.4 For example, they have been required to take reasonable steps to communicate information to customers “in a way which is clear, fair and not misleading”.5 In the general law, insurers are bound by the acts of an agent, if the act is within the actual authority (below, 8-2) or apparent authority (below, 8-3) of the agent, or if the act is subsequently ratified by the insurer (below, 8-4).