A Virginia business owner relies on a licensed producer's promises and later argues that the producer's license itself empowered the producer to bind the insurer to an oral coverage agreement. Under the definitions in Virginia's licensing chapter, which statement is correct?

Why D is correct

Va. Code § 38.2-1800 provides that, with one statutory exception, the license itself does not create any authority, actual, apparent, or inherent, in the licensee to represent, commit, or bind an insurer. Binding power must come from the insurer itself through its own grant of authority, not from the mere fact of licensure. The Commission, through the Virginia Bureau of Insurance, licenses producers to sell — it does not confer contractual power over insurers through the license.

Why the other options are wrong

• A) The statute says the opposite: the license creates no inherent authority to bind the insurer.
• B) Good-faith reliance by a customer does not convert the license into binding authority.
• C) The length of time a producer has held the license has no bearing on authority to bind an insurer.

Memory hook

A license lets you sell — it doesn't let you sign for the insurer.