Final answer:
It is true that insurance companies must receive authorization from state insurance departments to operate within that state, as insurance regulation is primarily conducted at the state level.
Step-by-step explanation:
Insurance companies must indeed obtain authorization from the state insurance department to transact business within a state. This is a true statement. The U.S. insurance industry is regulated primarily at the state level, with state insurance regulators setting guidelines to ensure the provision of insurance at reasonable costs and to maintain widespread coverage for the population. These goals can sometimes conflict, leading to a variety of challenges and political entanglements. In severe cases, where state regulations on premiums and coverage requirements are strict, insurers may choose to withdraw from a state's market, as evidenced by the departure of numerous insurers from New Jersey and State Farm's withdrawal from selling property insurance in Florida.