Insurer boards already know how to govern delegated authority, and that is the right starting point. Directors need short, tested training on how agent depth works like a binding authority with limits, how certification earns and removes it, what the record lets the insurer reconstruct, and who stays accountable. Training should focus on the differences.
How is agent depth like a delegated authority?
An insurer granting underwriting authority to a broker sets classes, limits and referral rules, then audits the binder. Agent depth works the same way, per capability: depth 1 reads, 2 drafts for a person to send, 3 executes routine work within bounds, 4 pays claims or takes hard-to-undo actions, and 5 coordinates other agents. The insurer's own limits sit inside the minimum chain alongside role scope, certificate, sources and platform guardrails. The lowest bound wins.
Directors who have sat on underwriting committees will recognise the logic. That familiarity is useful, and it is also where they can be caught out.
What must directors understand that delegated authority does not teach?
Four things differ from a binder:
- Authority expires fast. Agent certificates lapse after 90 days. A binder might run a year.
- Failure removes authority the same day. A certification run that clears no depth drops the agent to depth 1 immediately. No binder audit works that quickly.
- Every action is checked at the moment it happens. The bounds are enforced as the agent acts, not reviewed months later.
- Some actions are withheld for every agent. The platform floor refuses certain actions at every depth, whatever the insurer sets. The insurer narrows authority; it cannot widen what is withheld.
Where does an agent's authority end in an insurer?
| Work | Agent | Stays with a person |
|---|---|---|
| First notification of loss | Records and acknowledges within bounds at depth 3 | Coverage questions |
| Claim assessment | Drafts at depth 2 using the sealed policy wording | The decision |
| Claim payment within the insurer's limit | Prepares and holds at depth 4, if certified | Releasing it |
| Underwriting a new risk | Summarises and drafts terms at depth 2 | Accepting the risk |
| Declining a claim or cover | Drafts the reasons | Deciding and owning the outcome |
What should the board ask about pricing and underwriting agents?
Annex III of the EU AI Act lists risk assessment and pricing for life and health insurance as high-risk. Where an agent contributes to that work, human oversight under Article 14 applies, and deployers carry obligations under Article 26. The board should ask:
- Which underwriters oversee agent drafts in life and health lines, and are they certified?
- Can we reconstruct any priced quote from the append-only record, including the facts used and their provenance?
- How is a declared answer on an application weighed against a sealed medical or claims record?
- What happens to quotes in flight when an agent's certificate lapses?
How should directors be trained?
Directors need literacy, tested by concept, in a few hours. Members of the risk and underwriting committees should also see a reconstructed claim and a reconstructed quote, read from the record, before approving any agent at depth 4. A readiness assessment in the insurer shows where understanding is thin, and a plan to roll out AI agent training across the insurer carries it from the board to the claims floor. A bank board and a fintech board face parallel questions; the full model is in AI literacy and certification for people who work with agents.
Where the Academy fits
Pryme Intelligence Academy offers directors the Foundations track, about four hours with a free badge. The executive leading a regulated, multi-agent deployment takes Architect, closing with a capstone and a board review by two Pryme assessors. Claims approvers take Operator, with a two-week practicum on real decisions.
Questions people ask
Should the board approve each agent's depth?
The board should approve the policy: which capabilities may reach depth 3 or 4 and what evidence is required. Management then applies it agent by agent, and reports back.
How does this interact with brokers and delegated authorities?
Treat agents working on delegated business the same way, and make sure the binder's limits sit within the agent's bounds. The stricter limit should always win.
Which idea should insurer board training stress most?
Expiry. Directors used to annual binders can assume authority, once granted, persists. Agent authority lapses every 90 days unless re-earned.