Recently passed legislation, if signed by New York's governor, will regulate the use of insurance certificates in New York. A top legislative priority for the Independent Insurance Agents & Brokers of New York, Inc., the bill would, among other things, clarify that insurance certificates don't alter the scope of coverage provided by insurance policies, and would prohibit any person or entity from knowingly:
• Demanding an altered or modified certificate of insurance
• Requesting a certificate that contains terms, conditions, or other language that is not found in the policy
• Requiring a producer to issue an opinion letter or similar document that violates any of the bill’s prohibitions
• Requiring a certificate to warrant that the insurance policy complies with the requirements of a particular contract, and
• Requiring a certificate that inaccurately states the insurance coverages, purports to change the coverage, or to grant rights beyond those stated in the policy.
According to the IIABNY, the legislation is intended to curtail increasing demands on producers to use certificates to alter or amend the terms of coverage afforded by underlying policies and/or to make warranties that the policies provide complete coverage for contractual undertakings; producers who refuse such demands often face threats of losing their clients. Thanks to Tim Dodge, IIABNY’s director of research and media relations, and editor of the Ask Tim blog, for the heads-up on this bill’s passage.