A ___ is issued by the Commissioner and allows an insurer to transact business by states.

The correct answer is indeed a certificate of authorization. This document is issued by the state’s Commissioner of Insurance and serves as a formal approval that allows an insurance company to operate and conduct business within that particular state. This authorization is essential for compliance with state regulations governing insurance entities, ensuring that they meet certain standards and requirements to protect consumers.

A license agreement typically refers to a contractual arrangement where one party allows another to use its intellectual property under specified conditions, which is not directly related to the insurance business's operational permissions. A business certificate often pertains to the registration of a business entity rather than specifically addressing insurance transactions. Corporate registration is more about the legal establishment of a business entity than about the specific permissions required to operate as an insurer in a state.

In essence, the certificate of authorization is crucial for insurers as it signifies both credibility and adherence to regulatory standards needed to engage effectively in the insurance market.