State RegulationsTX specificDifficulty 1/5
What is the legal effect of a certificate of authority issued to an insurer under TIC Chapter 801?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
TIC 801.052 provides that a certificate of authority issued to an insurer authorizes the insurer to engage in the business of insurance and that the certificate must state the specific kinds of insurance authorized under it. The certificate is the insurer's authorization; it does not license individuals, guarantee claims, or shield the insurer from examination.
Why the other options are wrong
- A) The certificate belongs to the insurer; individuals are licensed in their own right, not by the insurer's certificate.
- C) A certificate of authority is permission to do business, not a guarantee that obligations will be paid.
- D) Holding a certificate does not exempt the insurer from the department's examination authority.
Memory hook
The certificate permits the insurer - and lists what it may write.