Which document is issued by a state regulator authorizing an insurer to operate in Louisiana?

• A. Insurance Deed
• B. Memorandum of Coverage
• C. Policy Binder
• D. Certificate of Authority

Answer: (D)

When a company wants to sell or issue insurance in a state, it must obtain the certificate of authority from the state department of insurance. This document officially authorizes the insurer to operate within that state and shows it meets necessary regulatory and financial requirements. Without it, the company isn’t legally allowed to transact insurance there.

The other terms don’t serve as the authorization to operate. An insurance deed isn’t a standard regulatory instrument. A memorandum of coverage is used to note a particular coverage arrangement, not to grant permission to do business in the state. A policy binder is a temporary promise to issue a policy and provide coverage in the meantime, but it does not authorize the insurer to operate.