Who is authorized to transact insurance business?

A licensed person is authorized to transact insurance business because they have completed the necessary education, training, and testing requirements laid out by regulatory authorities. This licensure ensures that the individual possesses the required knowledge of state laws, ethical practices, and the different types of insurance products they are permitted to sell or manage.

Licensing is crucial because it helps protect consumers by ensuring that only those who have proven their competence can provide them with insurance services. Each state has its own licensing process, which may involve background checks, passing examinations, and fulfilling continuing education requirements. This regulatory approach is designed to maintain the integrity of the insurance industry and ensure that agents and brokers operate within the legal framework established to safeguard the interests of policyholders.

In contrast, other options would not allow unlicensed individuals to conduct insurance transactions, as they lack the necessary qualifications and oversight that a licensed person possesses. Hence, licensing serves as a key mechanism in ensuring professionalism and accountability within the insurance business.