Investopedia explains 'Unauthorized Insurer'
Sometimes even legitimate insurance agents can be duped by unauthorized insurers. When this happens, it puts the agent in a very bad situation. Even if the agent has unknowingly acted as a representative of the unauthorized insurer, he or she can be personally responsible for clients' outstanding claims, can be charged with committing a crime, can have his or her insurance license revoked and can be forced to pay a professional fine. Insurance agents can avoid such outcomes by checking with their state's department of insurance to find out if an insurer is licensed to sell the insurance product they are offering. Agents should take this step before selling their clients any policies from a particular insurer.
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