What does a license or charter authorize an insurer to do?

A license or charter authorizes an insurer to conduct business as an admitted insurer. An admitted insurer is one that has received approval from the state regulatory authority to operate within that jurisdiction. This approval signifies that the insurer has met specific financial and regulatory standards, allowing it to offer policies and transact business legally in that state.

Being classified as an admitted insurer provides significant advantages, such as the ability to provide coverage that is recognized and regulated by the state, thus ensuring greater consumer protection. Admitted insurers are also required to contribute to state guaranty funds which protect policyholders in the event of insolvency.

The other options are not accurate representations of what a license or charter permits. Conducting business as a non-admitted insurer is typically not authorized without a specific license that allows such activities, and non-admitted insurers may not have the same level of regulatory oversight, which can pose risks to consumers. Additionally, limiting an insurer's activities solely to issuing policies or marketing does not align with the broader operational capabilities that a license confers, which includes underwriting, claims handling, and other business practices essential for a functioning insurance enterprise.