Insurance Agent — Suitability & Principal-Agent Conflict

Activate when: an insurance agent's compensation conflicts with the client's best coverage; 'which product do I recommend', commission-driven product choice, captive vs independent conflicts, best-interest duty. Do NOT activate when: no recommendation is being made (pure servicing) or no conflict exists.

Industry front door for principal-agent. Adds domain triggers, example, packs. Parent Process unchanged. Not legal advice.

Activate when: recommending among products with different commissions; captive-carrier pressure vs client fit; annuity/life with best-interest duties; disclosing agent capacity. Do NOT activate when: servicing only / no recommendation.

Why this variant

The parent principal-agent analyzes misaligned incentives between an agent and the principal they serve. An insurance producer is paid by carriers but advises clients — a structural conflict. Suitability/best-interest rules exist to resolve it: recommend on client fit, disclose the conflict, don't let commission drive the product.

Domain inputs → the analysis

• Name the conflict: higher-commission product vs best-fit coverage; captive limits vs client need; churning incentive on replacements.
• Duty: document the recommendation rests on the client's needs/finances (suitability/best-interest), not your payout.
• Disclose capacity (agent of the carrier vs broker) and material conflicts; where the best fit isn't in your appointments, say so.

Worked example

Two annuities fit; one pays you 2× commission. → Principal-agent view: recommending the higher-commission one without a client-benefit basis is a suitability + best-interest breach. Document why the chosen product is best for the client, or recommend the better-fit lower-commission one.

Packs

• Solo agent: conflict-disclosure + suitability-basis template.
• Agency: best-interest review on annuity/life sales; replacement scrutiny.

Red flags

• Product chosen for commission, rationalized after.
• Capacity (agent vs broker) undisclosed.
• Replacement/churning for a new commission.

Verification

• Conflicts named (commission/captive/replacement)
• Recommendation documented on client-fit basis
• Capacity + material conflicts disclosed
• Better-fit option outside appointments acknowledged where relevant

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