Before transacting a new line of insurance business in Georgia, what must an insurer obtain from the Insurance Commissioner?

Why D is correct

Under Georgia law, an insurer becomes an authorized insurer only when the Commissioner issues it a certificate of authority for the kinds of insurance it will write, as reflected in O.C.G.A. § 33-3-2. Selling a line of insurance before that certificate issues is transacting as an unauthorized insurer under O.C.G.A. § 33-3-3, with the enforcement consequences that follow.

Why the other options are wrong

• A) A letter of clearance relates to producer licensure when moving between states, not to insurer authority.
• B) Good standing in the home state matters for formation, but Georgia authority comes only through the certificate.
• C) Bonds may be required of licensees in some contexts but never substitute for the certificate of authority.

Memory hook

Certificate of authority = Georgia's permission slip to sell.

Why A is correct

Under the Georgia Insurance Code, the Insurance Commissioner admits an insurer to transact the business of insurance in this state by issuing a certificate of authority; a company without one is unauthorized and may not lawfully sell insurance in Georgia. The certificate is an insurer-level credential, distinct from the individual authorizations the Commissioner grants to persons.

Why the other options are wrong

• B) A producer license authorizes an individual to sell insurance; it does not admit an insurance company to transact business.
• C) A letter of clearance is a producer-mobility document for licensees relocating to Georgia, not an insurer admission credential.
• D) A surplus lines permit relates to placing coverages with unauthorized insurers in limited circumstances; it is not the general admission required to transact insurance in Georgia.

Memory hook

Companies carry a certificate of authority; people carry licenses.

Why A is correct

Under Georgia's insurer licensing provisions (O.C.G.A. § 33-3-2 through § 33-3-5), an insurer must be authorized by the Insurance Commissioner — evidenced by a certificate of authority — before transacting insurance business in this state. Insurers operating without that authority are unauthorized and may not lawfully write Georgia business.

Why the other options are wrong

• B) Insurers are chartered under state law; there is no federal insurance charter for this purpose.
• C) A surety bond is not the instrument by which an insurer becomes authorized in Georgia.
• D) A letter of clearance relates to individual licensees relocating between states, not insurer authorization.

Memory hook

No certificate of authority, no Georgia business.