All of the following are true about the insurance agency relationship, EXCEPT:

All of the following are true about the insurance agency relationship, EXCEPT: 



A. The agency agreement is a written agreement between the insurer and an agent.
B. The agency agreement gives the agent the right to represent the insurer and sell insurance on the insurer's behalf.
C. The principal is the party the agent authorizes to bind coverage.
D. The agent is the party authorized by the principal to act on the principal's behalf.


Answer: C. The principal is the party the agent authorizes to bind coverage.

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