State RegulationsGA specificDifficulty 1/5
Before transacting a new line of insurance business in Georgia, what must an insurer obtain from the Insurance Commissioner?
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Answer & full 3-part explanation (select an option above, or peek)
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.