What Does Authorized Insurer Mean?
An authorized insurer is an individual or a company with approval from the responsible authority, as per the state, to conduct the business of issuing insurance coverage in a given state. Different states have varying guidelines on regulatory matters, and therefore, the right to sell insurance is issued by either the insurance commissioner or other related agent of the state. However, whoever issues the authority should provide a subsisting certificate of authority.
Insuranceopedia Explains Authorized Insurer
The insurance business is a critical sector in any state. Insurance firms can help a country cope or recover from a disaster, prevent business failure or other catastrophic events. On the other hand, fraudsters in this sector can cause great harm and losses. This necessitates the state to regulate the industry by setting out laws and regulations and licensing only qualified and honest entities.
Any person or entity can engage in the insurance business as long as they meet the required terms and conditions. Therefore, an authorized insurer can be an individual, a partnership, an association, a cooperative society, among other legal entities. There are multinational insurance firms, which operate the business in different nations and states. In such a case, this firm needs to be an authorized insurer in each of these states and countries.