IIQE Paper 1 Regulatory Framework of Insurance Industry question: appointed by Insurers P and Q

IIQE Paper 1Regulatory Framework of Insurance Industry

Agent K is appointed by Insurers P and Q, but only Q appoints him for long term business. Selling a life policy, he misleads a client. Under section 68, who is liable?

A Insurer Q, as the empowering insurer
B Insurers P and Q, jointly and severally
C Insurer P, as the first insurer to appoint him
D neither insurer, as K acted outside his authority

Show the answer and explanation

Answer: A. Insurer Q, as the empowering insurer

Answer: Insurer Q, as the empowering insurer. Section 68(3): where only one appointing insurer covers that line of business, that empowering insurer is liable.Why not the others:• Insurers P and Q, jointly and severally: joint liability arises only where several insurers cover the line.• Insurer P, as the first insurer to appoint him: order of appointment is irrelevant.• neither insurer, as K acted outside his authority: Q is liable whether or not within authority.Watch out: Making every appointing insurer liable for every sale.Rule: Identify the line of business, then which insurers' appointments cover it.Source: IA P1 Study Notes 2024 Ed. §6.2.2, p.6/17; Insurance Ordinance (Cap. 41) s.68 (e-Legislation, checked 31 Oct 2026)