As an expert in insurance with over 20 years in the Ghanaian financial sector, including senior roles in risk management and compliance at banks like Ecobank Ghana, I draw on practical applications of agency law in insurance. Agency principles are critical in the Ghanaian insurance market, governed by the Insurance Act, 2021 (Act 1061) which replaced Act 724, and common law derived from English principles. Agents, such as insurance brokers or bank staff selling bancassurance products, act on behalf of principals (insurers or clients), and breaches can lead to claims disputes or regulatory sanctions by the National Insurance Commission (NIC). For instance, during the 2017-2019 banking cleanup, agency failures in tied insurance sales contributed to governance issues at collapsed institutions like UT Bank. I’ll list and explain the key duties, structured in bullet points for clarity, with practical examples tied to insurance operations for resilience and ethical practices. These duties ensure compliance, profitability, and trust in a post-DDEP recovery era where digital bancassurance is rising.

• Duty to Act Within Authority (Obedience): An agent must follow the principal’s instructions and not exceed the granted authority, whether actual (express or implied) or apparent. In insurance, a broker must only bind covers as authorized by the insurer; exceeding this could void policies. Practically, in Ghana, if a bank agent at GCB sells a life policy without insurer approval, it risks non-payment of claims, leading to NIC investigations under Act 1061’s intermediary regulations. This duty promotes compliance and prevents unauthorized risks, as seen in cases where agents overcommitted during the banking sector’s recapitalization drives post-2019.
• Duty of Care and Skill (Diligence): The agent must exercise reasonable care, skill, and diligence, akin to a prudent person in similar circumstances, often higher for professionals. For insurance agents, this means accurately assessing client needs and disclosing risks per uberrimae fidei (utmost good faith). In real-world Ghanaian operations, a broker failing to verify insurable interest in a property policy could lead to claim denials, mirroring issues in motor insurance fraud cases. This aligns with BoG’s Corporate Governance Directive 2018, extended to bancassurance, ensuring agents train to handle digital risks like cyber policies in 2025 trends.
• Duty to Avoid Conflict of Interest (Fiduciary Loyalty): Agents must not place themselves in positions where personal interests conflict with the principal’s, without full disclosure and consent. In insurance, a broker cannot secretly earn commissions from multiple insurers for the same client. Examples from Ghana include conflicts in group pension schemes where agents favored certain providers for kickbacks, leading to ethical breaches post-DDEP when transparency was emphasized for recovery. This duty fosters trust, crucial for BoG-approved fintech integrations in insurance distribution.
• Duty to Account for Benefits and Property: The agent must account for all monies, property, or benefits received on the principal’s behalf, maintaining proper records. Insurance agents must remit premiums promptly and report all transactions. In practice, delays in premium remittances by agents have caused liquidity issues for insurers, similar to banking cleanup revelations at Capital Bank where agency mismanagement hid funds. Under NIC guidelines, this ensures audit trails, supporting Basel II/III operational risk standards adapted for Ghana.
• Duty of Confidentiality: Agents must not disclose confidential information obtained during the agency without permission, even after termination. In insurance, this protects client data like health details in life policies. With rising digital banking risks in 2025, breaches could violate the Data Protection Act, 2012 (Act 843) and BoG’s Cyber and Information Security Directive 2020. For instance, leaking policyholder info in a competitive market could lead to lawsuits, emphasizing ethical practices for profitability.
• Duty Not to Delegate (Personal Performance): Generally, agents cannot sub-delegate duties without principal’s consent, as agency is based on personal trust. However, in complex insurance like reinsurance, delegation to specialists may be allowed if authorized. In Ghanaian contexts, unauthorized sub-agency in commercial liability covers has led to disputes, as in Access Bank Ghana’s bancassurance partnerships where clear delegation clauses are now standard for BoG feasibility.
• Duty to Communicate Information: Agents must promptly inform the principal of all relevant information that could affect decisions. For insurance brokers, this includes market changes or claim updates. Post-2022 DDEP, agents communicating bond-related insurance impacts helped banks like Stanbic maintain client relations, integrating into sustainable banking principles.