State RegulationsMA specificDifficulty 1/5
What must an insurer obtain before it may transact an insurance business in Massachusetts?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
An insurer may not transact an insurance business in Massachusetts without a certificate of authority from the Massachusetts Division of Insurance, issued under M.G.L. c. 175, §§ 4 and 33. Transacting without one is unauthorized insurance, exposing the insurer to enforcement. Home-state recognition letters, producer sponsorship, and federal charters do not substitute for the state credential.
Why the other options are wrong
- A) A home-state recognition letter grants nothing in Massachusetts; the certificate of authority from the Division is the operative license under M.G.L. c. 175, § 33.
- B) Producer sponsorship plays no role in an insurer's authority to transact business; the certificate issues from the Division under M.G.L. c. 175, § 33.
- D) There is no federal charter for insurance companies; authority to transact business is granted by the state under M.G.L. c. 175, §§ 4 and 33.
Memory hook
No certificate of authority, no Massachusetts business — the certificate gates the market.