State RegulationsGA specificDifficulty 2/5
A newly formed life insurer wants to begin selling policies in Savannah, Georgia, and asks its attorney what is required before transacting business. What is the correct advice under Georgia law?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under O.C.G.A. § 33-3-2 through § 33-3-5, no insurer may transact insurance business in Georgia until the Insurance Commissioner has issued it a certificate of authority, and unauthorized transacting exposes the company to penalties. Producers, too, may not place business with an unauthorized insurer, so admission through the certificate of authority is the gateway to every other licensing step in the state.
Why the other options are wrong
- B) Authorization must precede transacting; there is no first-year grace period for obtaining a certificate of authority. O.C.G.A. § 33-3-2 through § 33-3-5.
- C) Insurance regulation rests with the states; a federal charter is neither required nor a substitute for a Georgia certificate of authority. O.C.G.A. § 33-3-2 through § 33-3-5.
- D) Producers may not place Georgia business with an unauthorized insurer; the company itself must hold a certificate of authority. O.C.G.A. § 33-3-2 through § 33-3-5.
Memory hook
No certificate, no sales — Georgia's front door is the certificate of authority.