What is the authority given by an insurer or employer to a licensee to transact insurance on their behalf called?

The correct response is based on the term "appointment," which refers specifically to the formal authority granted by an insurer or employer to a licensed individual, allowing them to engage in insurance transactions on the organization's behalf. This relationship is crucial in the insurance industry, as it delineates the responsibilities and rights of the agent in conducting business, under the insurer's name.

When an agent is appointed, they are typically required to act within the guidelines set forth by the insurer and are often responsible for upholding the company's standards and policies while dealing with clients. This authority extends to various tasks such as selling insurance policies, providing customer service, and processing claims, all while ensuring compliance with applicable laws and regulations.

In contrast, terms such as delegation, administration, and endorsement do not accurately capture this specific relationship. Delegation implies the act of assigning responsibility but does not denote the formal recognition of authority. Administration refers to the management and execution of operations rather than the granting of authority to act on behalf of another party. Endorsement usually relates to the modification of an insurance policy or its terms rather than the concept of appointing someone to act as an agent.