An insurer wishing to conduct business must obtain what?

To legally conduct business, an insurer must obtain a certificate of authority. This certificate is essential as it serves as official recognition from a state regulatory agency, granting the insurer the permission to operate within that particular jurisdiction. The process of acquiring a certificate of authority involves strict compliance with state insurance laws, which includes meeting capital and surplus requirements, submitting documentation, and often undergoing rigorous financial and operational assessments.

This regulation is critical for ensuring that only qualified and financially stable companies can sell insurance products, thereby protecting consumers and maintaining trust in the insurance marketplace. Without this certification, an insurer would be operating illegally, which exposes them to severe penalties and damages their reputation.

While a business license, insurance bond, and state permit are often required for various types of business operations, the certificate of authority is specifically the document that allows an insurer to offer insurance coverage legally.