In order to transact the business of insurance for an insurer, a producer needs to...

Under Pennsylvania insurance law and producer licensing principles,implied authorityrefers to the authority a producer has to perform actions that arenot specifically stated in the agency contract, but are reasonably necessary to carry out the producer’s express duties. This authority allows producers to transact insurance business effectively on behalf of the insurer.

Pennsylvania-approved study materials explain that implied authority supports day-to-day activities such as collecting initial premiums, delivering policies, and explaining coverage terms. These activities are essential to the producer’s role even though they may not be explicitly written into the agency agreement.

The other options are incorrect. Expressed authority is authority clearly stated in the contract. Fiduciary describes a duty of trust and care, not a type of authority. Applied authority is not a recognized legal term in Pennsylvania insurance law. Therefore,implied authorityis the correct and verified answer according to Pennsylvania Life, Accident, and Health Insurance documentation.