What is the purpose of the written agreement between an administrator and insurer?

The purpose of the written agreement between an administrator and insurer is to establish authority and responsibilities. This agreement lays the groundwork for the working relationship between the two parties, clearly delineating the roles each will play in managing insurance policies and claims. By defining these responsibilities, the agreement helps ensure that both the administrator and the insurer are on the same page regarding operations, expectations, and legal obligations. This clarity is crucial for effective collaboration, operational efficiency, and adherence to industry regulations.

While other options touch on aspects that may be included in broader discussions about the relationship—such as regulatory compliance or payment terms—they do not capture the primary intent of the written agreement, which is fundamentally about establishing a framework for authority and responsibilities.