The principal is presumed to know which of the following?

• A. Information obtained by the medical examiner
• B. Information that the agent obtained but did not reveal to the principal
• C. Both I and II
• D. Neither I nor II

Answer: (C)

In agency relationships for life insurance, the principal is treated as having knowledge of information that the agent gathers or that is obtained in the course of underwriting. This is the idea of imputed knowledge: what the agent learns while acting on behalf of the principal is effectively knowledge of the principal.

Information from the medical examiner is part of the underwriting process used to assess risk and set premiums. Since the medical examiner’s findings are obtained to help the principal make underwriting decisions, the principal is presumed to know that information.

Similarly, information that the agent obtains during the application or underwriting process—even if the agent does not reveal it to the principal—falls within the scope of the agent’s duties. Because the agent is acting for the principal, the principal is presumed to know that information as well.

Therefore, both types of information—the medical examiner’s findings and information the agent has obtained but not disclosed—are treated as knowledge of the principal, which is why the correct choice is that both are known to the principal.