Which of the following best describes an 'Authorized' insurer?

• A. It has met financial requirements and is approved to transact business in the state
• B. It is a foreign company operating without state approval
• C. It only transacts business with policyholders in other states
• D. It is a mutual company

Answer: (A)

Authorized insurers are admitted to transact insurance in a state after meeting financial requirements and having their rates and policy forms approved by the state regulator. This status means the company is subject to state supervision, must maintain adequate solvency, and policyholders are protected by state guaranty funds if the insurer fails. The description in the question matches this idea: the insurer has met financial requirements and is approved to transact business in the state. The other descriptions refer to a company that isn’t admitted, one that operates only in other states, or a ownership type (mutual) that doesn’t define authorization status.