What must be true before an insurer can sell an insurance policy?

For an insurer to sell an insurance policy, it is necessary that the policy has received approval from the relevant regulatory authority, in this case, the Director of Insurance. This requirement is in place to ensure that the insurance products being offered to consumers meet certain standards of fairness and adequacy, providing necessary protection for policyholders. The approval process typically involves thorough reviews of the policy language, pricing structures, and the financial stability of the insurer to ensure they can meet their obligations to policyholders.

This regulatory oversight helps maintain the integrity of the insurance market by ensuring that only products which comply with legal and consumer protection standards are available for sale. By requiring approval, the Director helps prevent misleading policies or those with excessive or unjust terms from reaching consumers.

The other options are associated with aspects that might be beneficial or advantageous for an insurer, such as having a solid marketing strategy or a positive public perception, but none of these are prerequisites for the legality of selling an insurance policy. Additionally, being located within the state is not necessarily a requirement as many insurers operate across state lines, but they must adhere to the regulations specific to each state in which they offer coverage.