What document is required for a person or company to conduct insurance business legally?

To legally conduct insurance business, a person or company must obtain a certificate of authority. This specific document is issued by the state’s insurance department and serves as official permission for the entity to operate as an insurance provider within that jurisdiction. The certificate of authority ensures that the insurance provider meets all regulatory requirements, including financial stability, compliance with state laws, and maintaining necessary reserves to honor claims.

In this context, while a business license might be required for general business operations, it does not specifically grant permission for conducting insurance-related activities. An insurance policy and an insurance contract are documents related to the transactions between an insurer and policyholders but do not pertain to the essential legal permissions needed to operate as an insurer. Therefore, the certificate of authority is the critical document that establishes legal capacity to engage in insurance business.