Life Insurance Claim Denial – Recording Agent or Soliciting Agent?

What is the difference between a “recording” agent and a “soliciting” agent?  Does it make a difference?
The law is this area can be confusing, despite the relatively straightforward principles. Historically, there was a distinction between “recording” agents and “soliciting” agents.  A recording agent had authority co-extensive with that of the company, so there was no question of the agent’s actual or apparent authority.  This was stated in the 1979, Texas Supreme Court opinion styled, Royal Globe Insurance Company v. Bar Consultants, Inc.  The court noted that the authority of a soliciting agent was much more limited that the actual authority of a recording agent.  The court went on to hold that the insurance company was liable for the agent’s misrepresentation of coverage.
This led some courts to conclude mistakenly that an insurance company could be liable for misrepresentations by a recording agent, but not by a soliciting agent.  This can be seen in the 1984, First District Court of Appeals opinion styled, Guthrie v. Republic National Insurance Co.  This analysis was wrong, which was made clear when the Texas Supreme Court decided the 1994 opinion styled, Celtic Life Insurance Company v. Coats.
In Celtic v. Coats, the court held the insurance company liable for a misrepresentation by a soliciting agent.  The focus was not on the agent’s status as recording or soliciting.  Instead, the court applied the two-step analysis: 1) was he the company’s agent: and 2) was the misconduct within the actual or apparent scope of his authority?  Both questions were answered affirmatively, so the insurance company was liable.
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