When Conaway sought insurance through Central Insurance, he was provided an application which stated that Central Insurance was not acting as an agent of any company, but was acting as an agent for the applicant. At deposition, Conaway's agent at Central Insurance testified that he was an independent insurance agent, and his signature appears on the insurance application which states that he was the agent of the insured, not the insurer. Plaintiff concedes that Central Insurance was acting as an independent agent, but it contends that there was an implied agency relationship between Central Insurance and Michigan Mutual, such that the certificate issued by Central Insurance bound Michigan Mutual. The authority of an agent to bind a principal may be either actual or apparent. Actual authority may be either express or implied.
Implied authority is the authority that an agent believes the agent possesses.
Apparent authority arises where the acts and appearances lead a third person reasonably to believe that an agency relationship exists. However, apparent authority must be traceable to the principal and cannot be established only by the acts and conduct of the agent. Plaintiff has acknowledged that Central Insurance was an independent agency. Despite plaintiff's contention, the insurance application did not specifically state that Central Insurance had the authority to effect automobile insurance for Michigan Mutual specifically. By statute, all insurers are required to belong to the facility.