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Certificates of Insurance - The Changing Landscape and Developments May 17, 2013 Great Lakes EDay

Certificates of Insurance - The Changing Landscape and Developments May 17, 2013 Great Lakes EDay. Daniel Cotter Korey Cotter Heather & Richardson LLC Cotter@kchrlaw.com. Description.

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Certificates of Insurance - The Changing Landscape and Developments May 17, 2013 Great Lakes EDay

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  1. Certificates of Insurance - The Changing Landscape and DevelopmentsMay 17, 2013Great Lakes EDay Daniel Cotter Korey Cotter Heather & Richardson LLC Cotter@kchrlaw.com

  2. Description • Learn about the developments at the NAIC and at the state level in terms of certificates of insurance and the shift toward requiring filings of certificates of insurance.   Get a jump on these developments and learn what your companies will need to do to comply with this changing landscape.

  3. Agenda for Today • Primer and Information on Certificates of Insurance • Development

  4. What is a Certificate of Insurance? • Investopedia.com defines as: • “A document issued by an insurance company/broker that is used to verify the existence of insurance coverage under specific conditions granted to listed individuals. More specifically, the document lists the effective date of the policy, the type of insurance coverage purchased, and the types and dollar amount of applicable liability.”

  5. Defined by New Mexico • Bulletin in 2012: • “serve a valuable informational purpose and provide a courtesy summary….” • Law in 2013: • "certificate of insurance" means any document or instrument prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage, but excludes an insurance policy, insurance binder, policy endorsement or automobile insurance identification or information card.

  6. What a Certificate of Insurance is not • Not an actual policy. • Not a modifier of the underlying coverage.

  7. So What is the Problem? • Problem was that some certificates were misleading or attempted to change coverage. • Obscured or misrepresented terms or conditions • NAIC began to review. • States (including New Mexico) passed legislation

  8. New Mexico Deals with the Problem • Insurance Division Bulletin No. 2011-001, dated January 14, 2011 (Attached/Handout) • Valuable when used right • Violation of NM insurance law when used to obscure or misrepresent coverage • Stated that certificates of insurance were included in the requirement of forms that must be submitted to NM DOI

  9. New Mexico Issues Guidelines as part of Bulletin re Certificates of Insurance • Turn attention to the Bulletin

  10. 2013 NM S.B. 312 – Certificates of Property or Casualty Insurance • Citation: 2013 NM S.B. 312 (NS) • Enacted: 3/7/2013 • Effective: 7/1/2013 • Description: • Enacts new section at Chapter 59A (Insurance Code), Article 18 (The Insurance Contract), pertaining to certificates of property or casualty insurance. Defines "certificate of insurance" and "insurance producer." Requires filing of the certificate of insurance form with the Superintendent.  Sets out circumstances that will cause prohibition of use of a certificate of insurance form.  Provides for notice of disapproval of a form from the Superintendent. Explains exceptions to filing requirements.  Outlines review and filing processes.  Discusses interpretation of a certificate of insurance. Addresses prohibitions on treatment and content of a certificate of insurance.  Addresses notice requirements and application of the provisions.   

  11. Summary of Provisions in NM • Defines certificate of insurance • Requires a filing of the certificate of insurance form with the superintendent at least sixty days before its proposed effective date. • Exceptions for forms standard • Exceptions for federal law • Cannot alter a filed form

  12. Summary (cont’d) • Makes it clear this is not a policy and it does not alter any policy: • “A certificate of insurance is not an insurance policy and does not affirmatively or negatively amend, extend or alter the coverage afforded by the policy to which the certificate of insurance refers. A certificate of insurance shall not confer to any person new or additional rights beyond the express provisions of the insurance policy to which it refers.”

  13. Other States’ Actions • SC H3591 – substantially similar terms to NM Act • NY 3107A – makes certain prohibitions on what can be stated and limits who can issue the certificates of insurance • CT HB6476 – substantially similar terms to NM Act • WY HB0010 – requires a notice on all certificates that it is not a policy of insurance

  14. Other States’ Actions (cont’d) • HB1322 – Identifies prohibitions on what can be stated in certificates • Others

  15. Summary • Be Aware of the Movement • Make sure your certificates of insurance comply • Make sure you file the certificates where required • Make sure your agents and other intermediaries are addressing correctly

  16. Questions? • Anything want addressed or answered?

  17. Thank You! • Daniel Cotter • KCHR Law • cotter@kchrlaw.com • 312-259-4285

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