Georgia Life and Health Insurance Practice Exam

The type of authority granted to an agent through their written contract is known as express authority. This authority is explicitly stated within the contract and defines the specific powers and responsibilities assigned to the agent by the insurer. When an agent operates under express authority, they have clear guidelines on what actions they can take, such as binding coverage, collecting premiums, or submitting applications to the insurance company.

With express authority, both the agent and the insurer have a clear understanding of the relationship and the expectations, which helps to prevent misunderstandings or conflicts. This clarity is essential in ensuring that the agent accurately represents the insurer and adheres to the terms of the contract.

In contrast, implied authority refers to powers that are not explicitly outlined in the contract, but are necessary for the agent to fulfill their role effectively. Assumed authority is not a standard term in insurance contexts, while limited authority would indicate that the agent can only perform specific actions, which does not encompass the broader range of powers granted through a written contract.