Which term refers to the authority given to a producer to conduct business on behalf of an insurer?

The correct term that refers to the authority given to a producer to conduct business on behalf of an insurer is "Appointment." This term specifically denotes the formal arrangement where an insurer grants a producer (such as an agent or broker) the authority to represent and act on behalf of the insurer in selling and servicing their insurance products. This appointment is crucial because it establishes a legal and professional relationship, enabling the producer to negotiate and finalize contracts for the insurer.

In contrast, a license pertains to the authorization required for an individual or organization to operate legally as an insurance producer, but it does not imply the direct relationship with the insurer itself. A proxy generally refers to a person authorized to act on behalf of another, often in a different context such as voting, but it doesn't specifically relate to insurance authority. An affidavit, which is a written statement confirmed by oath or affirmation, is not related to the business authority of producers in the insurance industry. Understanding the distinction between these terms is important for navigating the insurance field and recognizing the responsibilities of producers.