Authority level systems within an insurance company dictate what?

Authority level systems within an insurance company refer to the guidelines and limitations placed on underwriters concerning their decision-making power. These systems clearly define the types and sizes of risks that underwriters are authorized to accept based on their experience, expertise, and the company's overall risk appetite.

By establishing authority levels, an insurance company can effectively manage risk, ensuring that underwriters only take on risks they are qualified to evaluate and price appropriately. This system helps maintain the company's financial solvency and adherence to underwriting standards.

In contrast, the other options do not directly relate to the authority level systems. Premiums charged for policies are influenced by a variety of factors, including the risk assessment but are not dictated solely by the authority levels. The duration of policy coverage is more about the product design rather than underwriter authority. Similarly, while the method of premium payment may be set by the company’s policies, it is not something determined by the authority levels assigned to underwriters.