Washington Life Producer Practice Exam

What type of authority is given to a producer that is not specified in their contract?

1. Express authority

2. Implied authority

3. General authority

4. Limited authority

The correct answer is: Implied authority

Implied authority refers to the powers that a producer is assumed to possess and can exercise in carrying out their duties, even though these powers are not explicitly outlined in their contract. This authority allows producers to perform acts that are necessary to fulfill their responsibilities to the insurer, based on customary practices in the industry or the nature of their role. For example, if a producer has the express authority to sell insurance policies, they typically also have implied authority to make representations about those policies to potential clients, as this is a necessary component of selling. The concept of implied authority ensures that producers can effectively serve clients and the insurer without having to seek explicit permission for every action they take, allowing for more flexibility and responsiveness in their activities. The other types of authority, such as express authority, refer specifically to powers listed in the contract, while general and limited authority describe the scope of a producer's power rather than an authority type that is unspecified in a contract.