Which of the following is NOT true regarding a Certificate of Authority?

A Certificate of Authority is a formal document issued by a state's department of insurance that allows an insurance company to conduct business within that state.

It is necessary for ensuring that the insurance provider meets the state's regulatory requirements, thus allowing them to sell insurance products in that jurisdiction. This means that any company wishing to market its services must hold this certificate, affirming that they are operating legally and in compliance with state laws.

The certificate is indeed equivalent to an insurance license in that it grants the legal authorization needed to conduct insurance business. It verifies that the company has the necessary qualifications and adheres to the established standards of the state.

While the certificate is commonly associated with insurance companies, group insurance participants do not receive a Certificate of Authority. Instead, this certificate is intended solely for entities seeking to provide insurance services. Therefore, the statement regarding its issuance to group insurance participants is not true. This distinction illustrates the specific role and purpose of the Certificate of Authority in the insurance landscape.