Final answer:
An insurer without a Certificate of Authority is known as an unauthorized insurer. This ties in with the concept of adverse selection, where insurers manage risk to remain profitable.
Step-by-step explanation:
An insurer that has not been granted, or has been denied, a Certificate of Authority and is therefore not permitted to transact insurance is known as an unauthorized insurer. This relates to the concept of adverse selection, where insurance companies must find ways to differentiate between high-risk and low-risk buyers to maintain profitability. Overcoming adverse selection might involve insurers refusing to sell to high-risk individuals, or it could lead to regulations requiring certain individuals to purchase insurance, often at rates above what would be actuarially fair for their risk group.