What does it mean for a licensee to act as a fiduciary?

A licensee acting as a fiduciary means that they have a legal obligation to act in the best interests of another party, often referred to as the principal or client. This concept is foundational in many professions, particularly in insurance and finance, where trust and loyalty are paramount. The fiduciary role requires that the licensee puts the needs and interests of their clients above their own, ensuring transparency and integrity in all dealings.

Fiduciaries must disclose any conflicts of interest, maintain confidentiality, and provide information that helps the client make informed decisions. This level of responsibility is designed to protect clients and ensure they receive fair treatment. Understanding this obligation is crucial for professionals in the insurance industry, as it fosters trust and encourages ethical practices.