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Who Reps Whom?

Kansas lawsuit based on confusion between agent, broker roles

By Barry Zalma | Updated on May 31, 2012
Lawyers, judges and insurance departments often have difficulty with the difference between an insurance agent and an insurance broker. Simply, a broker only represents the insured by transacting insurance with, but not on behalf of, the insurer. An agent transacts insurance with and on behalf of the insurer. Because the Kansas Insurance Dept. had difficulty with the difference, Golden Rule Insurance Co. was compelled to appeal a trial court’s decision affirming the Kansas Insurance Dept.’s order finding it in violation of two provisions of the Kansas unfair trade practices law. 

Golden Rule Insurance Co. challenged the Department’s findings that it committed unfair claim settlement practices in Golden Rule Insurance Co. v. Robert M. Tomlinson, in his official capacity as the Assistant Commissioner of Insurance of the State of Kansas acting on behalf of the Commissioner of Insurance of the State of Kansas, and the Kansas Insurance Dept., No. 105,245 (Kan.App. 04/27/2012).

Facts and Procedural History

Dirk McClary was the intermediary between Patti Denney and Golden Rule in the acquisition of the policy in question. Golden Rule asserted it was not responsible for the acts and omissions of McClary because McClary was acting as an independent broker and as Denney’s agent, not as Golden Rule’s agent. 

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