What does "agent authority" refer to in insurance?

Agent authority refers to the powers an agent has to act on behalf of an insurance company. This authority encompasses various aspects of an agent's responsibilities, including the ability to bind coverage, negotiate terms, and represent the insurer in interactions with clients. The specifics of this authority can vary based on the agreement between the agent and the insurance company, such as whether the agent is a captive agent (representing one insurer) or an independent agent (working with multiple insurers).

Understanding agent authority is crucial because it defines the operational limits and responsibilities of the agent, ensuring they can effectively serve clients while adhering to the insurer's guidelines. This concept plays a critical role in agency law and influences how agents conduct business and the level of trust they establish with clients.

The other options focus on different aspects of insurance agency, such as licensing, commission, and training, which are related to the profession but do not define the core concept of what agent authority actually entails.