New York State Life Insurance Exam Questions Practice Question
What type of authority is given by an insurer to an agent but NOT formally communicated?
Correct Answer: B
Rationale: Implied authority refers to the powers an agent possesses that are not explicitly stated but are necessary to carry out their duties. This type of authority allows agents to perform actions that are customary in their role, even if not formally communicated by the insurer.
Express authority (A) is clearly defined and communicated, while written authority (C) is documented. Apparent authority (D) arises when a third party perceives an agent as having authority based on the insurer's representations. Thus, only implied authority aligns with the concept of uncommunicated powers granted to an agent.
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