Which type of authority allows a producer to act on behalf of the insurance company?

The correct option is based on the concept of express authority, which is explicitly granted to a producer by the insurance company. This authority is defined in the contractual agreement between the insurer and the producer, outlining the specific powers and responsibilities the producer has when representing the company.

Express authority enables the producer to engage in activities such as selling insurance policies, collecting premiums, and servicing client accounts within the defined scope of that authority. The clarity of express authority ensures that both the insurer and the producer understand the limits of their relationship, which is crucial for maintaining regulatory compliance and operational efficiency.

In contrast, implied authority arises from the actions and the circumstances surrounding a producer's responsibilities, rather than from a formal agreement. It is based on what is necessary for the producer to carry out their duties effectively, though it may not be explicitly stated. Limited authority restricts the producer to specific actions or products, while general authority typically gives broader power, but does not have the same legal clarity as express authority. Thus, express authority stands out as the clear framework for defining a producer’s role in acting on behalf of the insurance company.