Which of the following statements is true regarding the certificate of authority?

The statement regarding the certificate of authority that indicates it must be issued by the local insurance department is accurate. A certificate of authority is a legal document provided by a state's insurance regulatory authority that allows an insurer to operate within that specific state. This ensures that the insurer has met all regulatory requirements and is authorized to conduct business, including policy issuance and claims handling, in that jurisdiction.

The certificate serves as a critical component of regulatory oversight, ensuring that companies adhere to state laws designed to protect consumers and maintain the integrity of the insurance market. Without this certificate, insurers cannot legally solicit or bind coverage within the state.

This option clearly aligns with the requirements laid out by regulatory bodies and serves to protect both the insurer's interests and the consumers they serve.