An insurance producer meets with an applicant to write a new life insurance policy. During this interaction, the producer operates under the laws of agency to conduct business on behalf of the insurer. Which of the following statements correctly describe the producer's legal authority in this scenario? (Select all that apply)
- The producer's express authority allows them to solicit the application, as this specific power is explicitly stated in their written agency contract.Cevap
- The producer holds apparent authority when presenting official company rate books and forms, giving the applicant a reasonable belief that the producer represents the insurer.Cevap
- CThe producer uses implied authority to unilaterally correct an error on the signed application without obtaining the applicant's initials.
- DThe producer gains express authority to instantly approve the policy simply because the applicant assumes the producer has that power.
Cevap
The correct statements are that express authority allows soliciting applications because it is in the written contract, and apparent authority is created by using official company materials.
Express authority correctly refers to the powers explicitly written in the agency contract, such as soliciting business. Apparent authority is correctly described as the authority the applicant assumes the producer has because the insurer provided them with official company materials.
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Types of Agent Authority