Georgia Bill Clarifies Insurance Certificates Does this Help or Hurt?
Posted by Cary White on Fri, Apr 29, 2011 @ 02:15 PM
Georgia joins the list of states that have enacted bills clarifying the nature of insurance certificates. As of April 27th, it is expected that Georgia Gov. Nathan Deal will sign into law a bill requiring all insurance certificate forms be filed with and approved by the state insurance commissioner. This is a huge win for Acord and for insurance companies. How does this bill and others like it affect you?
Insurance agents and brokers and insurance companies nationwide have had long running problems with certificate holders that want additional coverage and protection through myriad custom modifications to insurance certificates intended to add or amend policy provisions in favor of the certificate holder.
Georgia's insurance commissioner issued a directive in January restating that certificates of insurance are for informational purposes only and confer no rights on the certificate holders outside terms of the policies shown on the certificate. Georgia bill (HB66), sponsored by Rep. Maxwell Howard, clarifies that a certificate of insurance is merely a synopsis of coverage as it exists on the date the certificate is issued and is intended for informational purposes only. The bill also clarifies that certificates of insurance are not insurance contracts nor a binding document that may alter the coverage of one or more of the policies noted on the certificate.
The Georgia law will mirror the efforts by Acord with their new certificate of insurance form noted in previous posts.
CERTIFICATE HOLDERS
Certificate holders beware! It is essential that you carefully review your contract insurance requirements with a licensed insurance professional and a qualified attorney. You may no longer require custom insurance certificates of your own design, unless approved by the insurance commissioner of the state of Georgia, nor may you require modifications to a standard insurance insurance certificate that are not otherwise approved. Your insurance requirements must be clear and enforceable. You will likely need to specify each endorsement that you will require to accompany every valid insurance certificate including additional insured endorsements, waivers of subrogation and notices of cancellation. The more individual documents you require, the more likely there will be errors. You will need to allow for extra time to receive, review and approve the documents you will need. You will also need a means to keep track of what you have received. While you cand take operational steps to allow for more time to get what you want, you should also consider software systems like CertainCert to help you streamline your review and approval process.
INSUREDS
While you will no longer have to fight your insurance agent/broker and insurers for special modifications to insurance certificates, brace yourself, you will still need to fight to get the insurance endorsements that will likely now be necessary. Carefully read the insurance requirements of every contract you are planning to enter into. Do not leave the insurance requirements until the end. You will need to allow for more time to be sure that you receive valid endorsements for additional insured, waivers of subrogation and notices of cancellation from more than one insurance carrier to accompany every insurance certificate. This may mean as many as 12 different pieces of paper to accompany every insurance certificate. Meet with your insurance agent/broker to review their procedures and the likely requirements you will be facing in the future. Together, you should find a way to work together efficiently and avoid insurance requirements holding up your future contracts and work.