Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What role does an agent in the insurance industry play?

1. They manage policyholder claims

2. They act on behalf of insurers under a contractual agreement

3. They provide financial advice to clients

4. They verify the credentials of insurance companies

The correct answer is: They act on behalf of insurers under a contractual agreement

An agent in the insurance industry acts on behalf of insurers under a contractual agreement, making this the correct answer. This role is critical as agents serve as intermediaries between insurance companies and policyholders. They are responsible for selling insurance policies, advising clients on coverage options, and helping them understand the terms and conditions. Agents can represent a single insurer or multiple companies, which allows them to offer diverse policies that best meet the needs of their clients. The function of managing policyholder claims is typically assigned to claims adjusters or claims representatives rather than agents, highlighting a separation of duties within the insurance process. Providing financial advice is not exclusively the role of agents; financial advisors specifically focus on a broader range of financial products and strategies. Lastly, verifying the credentials of insurance companies is usually handled by regulatory bodies or rating agencies, not agents, emphasizing the distinct responsibilities within the insurance industry.