Question

Julie accepts Tom's application for a life insurance policy. She also takes his premium and sends it directly to the insurance company's home office. Her agency contract does not mention the handling of premiums. Which type of authority allows Julie's actions?

1) Actual authority
2) Implied authority
3) Apparent authority
4) Express authority

Answer 1

Implied authority allows Julie's actions in accepting Tom's application and sending the premium to the insurance company's home office.

Step-by-step explanation:

The type of authority that allows Julie's actions is implied authority. Implied authority is not expressly stated in a contract, but it is understood to exist based on the nature of the relationship between the parties involved. In this case, Julie accepting Tom's application and sending the premium to the insurance company's home office can be considered part of her implied authority as an insurance agent.