The Legal Framework of Compliance & Ethics
The important points addressed in this lesson are:
Although principally a function of the states, insurance regulation is a responsibility shared by federal and state government
The concept of agency -- by virtue of which a principal is bound by the actions of its agent -- grew out of English common law.
Authority enjoyed by agents may be express, implied or apparent.
Ratification by a principal will make it liable for the unauthorized actions of its agent.
Various legal concepts developed out of common law that affect liability between buyers and sellers and their agents, including custom, waiver, estoppel and election.
Over the years, courts have extended sellers' liability and have effectively changed the concept of caveat emptor to caveat vendor.