State RegulationsTX specificDifficulty 1/5
Under TIC 801.052, what does a certificate of authority issued to a Texas insurer authorize, and what must it state?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 801.052, a certificate of authority issued to an insurer under that chapter authorizes the insurer to engage in the business of insurance, and the certificate must state the specific kinds of insurance authorized under it. TIC 801.051 directs the department to approve the application and issue the certificate under the department's seal when the applicant has complied with the law. Practically, an agent who writes outside the lines stated on the insurer's certificate is writing business the insurer is not authorized to write.
Why the other options are wrong
- A) The certificate states authorized kinds of insurance, not the roster of appointed agents.
- C) The certificate is limited to the specific kinds of insurance stated in it.
- D) A certificate of authority is a license to transact insurance, not a solvency guarantee or a rating.
Memory hook
The certificate grants authority and names the lines you may write.