You and your agency
want to do business in non-resident states. You file the insurance licensing application for an agency, and the state sends you a letter asking for verification of your certificate of authority.
A certificate of authority? What is a certificate of authority, and what does it have to do with applying for an agency license? These are all common questions I hear from prospective clients, and I'd like to address them in this blog.
What is a certificate of authority?
Also known as a COA or a foreign qualification, a certificate of authority is the process of registering a corporation or LLC with the Secretary of State’s office in a non-resident state.
Why does my agency need a certificate of authority when applying for a non-resident agency license?
As a part of the agency license application process, some states require proof of the certificate of authority before the state insurance department will issue the agency license.
So I only need certificates of authority if the insurance department requires proof?
Not necessarily. You should check with an attorney or tax advisor to determine whether certificates of authority might still be required
for your company even if proof is not required by the state insurance department to issue the agency license.
How do I obtain a certificate of authority?
Depending on the state, the application for a certificate of authority will either be a paper application or an online application. The filing
fee can range from $70 to $775 dollars. Common information requested on the application includes:
The certificate of authority application is asking for a registered agent. What is that?
- Formal name of company
- Date and state of incorporation
- Names of officers and directors
- Number of shares of stock
A registered agent
is the person within the state who will receive service of process documents or other correspondence from the Secretary of State’s office and who forwards the documents to the company. There are many companies who can serve as a registered agent.
Is there anything else needed to file for a certificate of authority?
Most states require a certificate of good standing from the home state to accompany the application. Other requirements may include articles of incorporation and the signature of the registered agent.
See also: What you need to know about insurance agency licensing