Which term best describes an insurance company that operates without a Certificate of Authority?

An insurance company that operates without a Certificate of Authority is best described as a "nonauthorized insurer." This term indicates that the insurance company has not received the necessary approval from the state's regulatory authority to conduct business in that jurisdiction. Operating without such a certificate means the insurer has not met the regulatory requirements, such as financial solvency, compliance with state laws, and consumer protection standards. This status can pose risks to consumers, as they may not have the same protections as those provided by authorized insurers, including access to the state’s guarantee fund in the event of the insurer's insolvency.

In contrast, an authorized insurer has the necessary licensing to operate legally within a state. A foreign insurer refers to an insurance company that operates in a state other than its state of incorporation, but it is typically authorized in that state. A domestic insurer is one that is chartered and operates in the same state. Thus, the key characteristic of a nonauthorized insurer is its lack of the required Certificate of Authority, distinguishing it from the other types of insurers mentioned.