Which statement correctly matches the authority type with its definition?

• A. Express authority - powers NOT given by the agency agreement, but necessary to complete the functions allowed in the agency agreement
• B. Implied authority - powers given to the agent as part of the agency agreement
• C. Apparent authority - powers NOT given by the agency agreement, but that a reasonable person would presume the agent has
• D. Express authority - powers given to the agent as part of the agency agreement

Answer: (D)

Express authority is the powers given to the agent as part of the agency agreement. This means the insurer explicitly states, in the contract, what the agent is allowed to do—such as solicit applications, issue policies, collect premiums, and bind coverage within defined limits. Because these powers are spelled out in the agreement, actions taken within this scope bind the insurer.

Implied authority, by contrast, covers duties not written out but reasonably necessary to carry out the express powers—things the agent is understood to do because they are typical parts of the job, like delivering a policy or handling routine premium processing that supports the stated authority.

Apparent authority arises when a third party reasonably believes the agent has authority based on the insurer’s representations or the agent’s actions, even if the agent’s actual authority is limited. If the belief is reasonable, the insurer may be held accountable for the agent’s actions under apparent authority.

So the statement that matches the definition of express authority is the one that describes authority as powers given to the agent as part of the agency agreement.