Which description best fits a corporation or a partnership that holds a license from a regulator or several regulators?

• A. Insurance broker
• B. Insurance agency
• C. Risk management firm
• D. Financial services company

Answer: (B)

In insurance regulation, the license is typically issued to the business entity that will distribute insurance products, such as a corporation or partnership, rather than to an individual. An insurance agency is the entity that holds the regulator’s license to operate as an intermediary and to place policies with insurers; it hires or licenses brokers to work under its umbrella. This aligns with the idea of a licensed business entity rather than a person. The other options describe roles or services that don’t center on the licensed, entity-level status: an insurance broker refers to the individual or the broker’s role, a risk management firm focuses on advising about risk rather than selling insurance, and a financial services company is a broader label that doesn’t specify the licensed insurance distribution entity. Therefore, the description that best fits a corporation or partnership holding a regulator’s license is an insurance agency.