Which of the following describes a type of authority that agents do NOT have?

The concept of authority in the context of insurance agents refers to the power granted to them to act on behalf of an insurance company. Understanding the types of authority is crucial for recognizing what an agent can and cannot do.

General authority refers to the broad powers given to agents that allow them to perform typical duties related to their job, such as selling insurance policies and handling claims. Implied authority is the authority that is not explicitly stated but is understood to be granted as a necessary part of the agent's role. Specific authority is the precise powers authorized by the insurer for specific tasks or transactions.

Residual authority, however, is not an established term in the field of insurance. This type of authority is not recognized in practice, making it clear that agents do not possess it. Therefore, noting that agents lack residual authority is accurate, as it does not correspond to any legitimate form of agent authority recognized in the insurance industry. Understanding this distinction is essential for both the practice of insurance and for avoiding misunderstandings about an agent's powers.