To conduct business, an insurance company must be authorized by whom?

An insurance company must be authorized by the state where it is conducting business in order to operate legally. Each state in the U.S. has its own set of laws and regulations governing the insurance industry, which ensures that insurers are compliant with local requirements and that they meet the standards necessary to protect consumers.

The state’s insurance department, which is typically led by the Insurance Commissioner, oversees the authorization process. This includes reviewing the company’s financial stability, business practices, and compliance with state laws. By requiring state authorization, consumers are afforded a level of protection, ensuring that only financially sound and lawful companies can offer insurance in that jurisdiction. This process of regulation promotes healthy competition and maintains public trust in the insurance marketplace.