Which type of authority holds that a producer may have whatever authority a reasonable person would assume the producer has?

Apparent authority is the concept that a producer or agent has the authority that a reasonable person would assume they have based on their actions or the context in which they operate. This type of authority is not explicitly granted by a principal but is inferred from the situation. For example, if an insurance agent regularly offers certain coverage options to clients and is seen as an expert in that area, clients may reasonably believe that the agent has the authority to make decisions about those options or recommend them.

This understanding is crucial in the insurance field, as it helps establish trust between clients and agents, ensuring that clients feel confident in the advice and options presented to them. In contrast, express authority is specifically outlined in writing or verbally, while implied authority relates to actions that are necessary to fulfill the responsibilities granted by express authority. Unlimited authority is not a standard term in the context of agency law and does not apply here, as it implies total unrestricted power, which is not practical in agency relationships.