What are the three levels of producer authority?

The correct answer identifies the three recognized levels of producer authority in insurance as expressed, implied, and apparent.

Expressed authority refers to the direct, written authorization from the insurance company to the producer, outlining the specific activities the producer is allowed to undertake on behalf of the insurer. This might include the power to bind coverage, collect premiums, or issue policies, delineated explicitly in a producer agreement.

Implied authority encompasses the powers that are not specifically stated but are necessary for the producer to fulfill their job effectively. This type of authority allows producers to take actions that a reasonable person would understand to be part of the ordinary duties associated with their position, even if these actions are not explicitly outlined in the expressed authority.

Apparent authority relates to how third parties perceive the producer's authority to act. If a producer acts in a manner that suggests they have the authority to bind coverage or make decisions, clients may reasonably assume that the producer has that authority, even if it has not been expressly granted by the insurance company. This perception can lead to a binding contract with the client, based on the appearance of authority.

Understanding these three levels of authority is crucial for producers as they navigate their relationships with clients and the insurance companies they represent, ensuring both compliance