What term refers to the authorization that an insurance company grants a producer to act as its agent?

The correct term that refers to the authorization granted by an insurance company to a producer to act as its agent is "Appointment." In the insurance industry, an appointment is a formal agreement between the insurance company and the agent or producer, indicating that the agent is authorized to sell the company's policies and represent its interests.

The appointment process typically ensures that producers are properly licensed and adhere to the company's guidelines and regulations while conducting business on behalf of the insurer. This authorization is essential for the legitimacy and operation of insurance sales, as it establishes a professional relationship between the insurer and the agent, allowing the agent to solicit applications, submit policies, and receive commissions on the sales they make.

While a contract outlines the terms and conditions of the relationship, it does not specifically denote the authorization in this context. Licensure refers to the legal permission required to sell insurance, which is a prerequisite but does not equate to the authorization provided by an appointment. Commission denotes the compensation the agent receives for sales but does not address the authorization aspect. Therefore, "Appointment" is the most accurate term in this context.