What is the insurance license issued by a state insurance department known as?

The correct answer is that the insurance license issued by a state insurance department is known as a certificate of authority. This certificate is essential as it formally grants an insurance company the legal permission to operate and provide insurance coverage within that specific state. It indicates that the insurer has met all regulatory requirements established by the state's insurance department, which can include demonstrating financial stability, adhering to specific business practices, and maintaining compliance with state laws designed to protect policyholders.

A certificate of registration typically pertains to the registration of businesses or organizations, not specifically to insurance operations. A license of compliance is not a standard term used in the insurance industry to denote the authority to operate. An insurance bond serves a different purpose, as it is a financial guarantee protecting against specific types of losses, rather than serving as a license or authority to conduct insurance business. Thus, the certificate of authority is the correct term used to denote the official permission granted to insurers by state regulators.