What must the director ensure before granting a certificate of authority to a domestic insurer?

Before granting a certificate of authority to a domestic insurer, the director must ensure that the insurer is safe and solvent. This is crucial because the primary responsibility of an insurer is to fulfill its obligations to policyholders. Safety and solvency indicate that the insurer has sufficient financial resources to cover its potential liabilities, ensuring that it can pay claims as they arise.

In reviewing an insurer's safety, the director evaluates the company's financial health, including its assets, liabilities, reserves, and overall financial performance. Solvency specifically refers to the insurer's ability to meet long-term financial commitments, demonstrating that it can survive financial downturns and ongoing operations without risk of bankruptcy. By confirming that an insurer is safe and solvent, the director is protecting the interests of consumers and maintaining the integrity of the insurance marketplace.

While profitability, safety standards, and local management may contribute to an insurer's overall performance or operational success, they do not directly equate to the critical requirement of safety and solvency that must be demonstrated to obtain the authority to operate within the state.