Louisiana Series 103 – Life, Health, And Accident Or Sickness Insurance Practice Exam

The authority for a licensed producer to act on behalf of an insurer comes from the agency relationship between the insurer (the principal) and the producer (the agent). This is governed by the law of agency, which defines what an agent is permitted to do, including express authority stated in the agency contract, implied authority that is reasonably necessary to perform duties, and apparent authority that arises from the principal’s representations to third parties. A written agency contract often sets out specific powers, but the legal basis for those powers—and the insurer’s liability for the agent’s actions within that scope—comes from agency law. Regulations govern licensing and ethical rules, not the fundamental grant of authority. The Civil Code covers general contract principles, but the authority specific to representing an insurer is determined by the law of agency.