Which entity typically audits the financial statements of insurers?

The correct choice, certified public accountant, is indeed the entity that typically conducts audits of the financial statements of insurers. Certified public accountants are licensed professionals who carry out independent audits to ensure that financial statements are accurate, reliable, and comply with relevant accounting standards. They assess the financial health of the organization by evaluating accounting systems, identifying potential risks, and checking for compliance with regulations and laws. This independent audit function is crucial for maintaining transparency and trust in the insurance industry, as it helps stakeholders, including policyholders and regulators, ensure that the insurers are managing their finances properly.

Insurance regulatory authorities do play an essential role in overseeing the activities and ensuring compliance among insurers, but they do not perform the actual audits of financial statements. Instead, they rely on the audits conducted by certified public accountants for accurate assessments. A state legislature is involved in creating laws and regulations but does not engage in financial audits. Independent agents primarily focus on selling insurance products and representing the insurer but do not conduct audits of the insurer's financial statements. Hence, it is the certified public accountant who serves as the key auditor of an insurer's financial statements.