General Insurance PrinciplesQuestion 609 of 716
Apparent authority is the authority an agent appears to have because:
a.It is expressly written into the agency contract as one of the powers the insurer has formally granted the producer
b.The agent falsely claims it with no basis whatsoever
c.The state licensing board specifically grants it
d.The insurer's actions or inaction lead a third party to reasonably believe the agent possesses it
Explanation
Apparent authority arises when the insurer's conduct causes a reasonable third party to believe the agent has authority, binding the insurer. It is not the same as express (written) authority or a baseless false claim.
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Related questions on this topic
- Describing insurance as an aleatory contract means that:
- Insurance is called a unilateral contract because:
- Insurance is a conditional contract, meaning that:
- Implied authority of a producer is:
- In the legal relationship of agency, the insurance producer normally represents:
- A producer's duty to recommend coverage that genuinely fits the client's needs and financial circumstances is the principle of:
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)