MIIAB Certificate Bill Enacted!
Tired of having to deal with requests to change certificates of insurance forms? Would you like to tell contractors, cities and other units of government, that you can't alter a certificate form? Legislation sponsored by the MIIAB that was recently enacted and signed into law could help out.
A new Minnesota law will make it illegal for an insurance agent to issue a certificate that amends or alters the coverage provided by an insurance policy. Nor can an agent issue a certificate of insurance that provides for a notification of cancellation to another party that exceeds the notice of cancellation provided to the policyholder.
The new law clearly states that a certificate of insurance is a document that merely provides evidence of insurance coverage. All certificates issued by an insurer or agent shall contain the following statement: "This certificate or memorandum of insurance does not affirmatively or negatively amend, extend, or alter the coverage afforded by the insurance policy." Agents may not issue an opinion letter or other correspondence that alters coverage or provides different notice than that provided in statute.
The new law adds Section 60A.39 to the state insurance codes and relates specifically to certificates of insurance. It also adds a provision to section 60K.46 which applies to prohibited acts under the insurance producer licensing law. Violation of the new certificate law could result in a suspension or termination of an agent's license or even civil penalties. The MIIAB proposal was signed into law by Governor Pawlenty on May 22, and will be effective August 1, 2009.
The MIIAB's intent in passing such a statute was to give its member agents a document that clearly states their inability to alter insurance certificates. This document could be provided to those requesting certificates not in compliance with this new law. Passage of this legislation was the MIIAB's top legislative priority this session.
I would like to thank the MIIAB Legislative Committee, and especially Dave Szczepanski and Dick McKenny for their tireless work and legislative testimony at the capitol. The legislation was very difficult to pass and took a very circuitous path to the governor's desk. Its passage was a major legislative victory for the association.
MIIAB Certificate of Insurance language contained in House File 1853:
[60A.39] CERTIFICATES OF INSURANCE.
Subdivision 1. Issuance. A licensed insurer or insurance producer may provide to a third party a certificate of insurance which documents insurance coverage. The purpose of a certificate of insurance is to provide evidence of insurance coverage and the amount of insurance issued.
Subd. 2. Approval. An insurer or licensed producer shall not issue a certificate of insurance or other document or instrument that either affirmatively or negatively amends, extends, or alters the coverage provided by an approved policy, form, or endorsement without the written approval of the commissioner.
Subd. 3. Required statement. A certificate or memorandum of property or casualty
insurance when issued to any person other than the policyholder must contain the following or similar statement: "This certificate or memorandum of insurance does not affirmatively or negatively amend, extend, or alter the coverage afforded by the insurance policy."
Subd. 4. Cancellation notice. A certificate provided to a third party must not provide for notice of cancellation that exceeds the statutory notice of cancellation provided to the policyholder.
Subd. 5. Filing. An insurer not using the standard ACORD or ISO form "Certificate of Insurance" shall file with the commissioner, prior to its use, the form of certificate or memorandum of insurance coverage that will be used by the insurer. Filed forms may not be amended at the request of a third party.
Subd. 6. Opinion letters. A licensed insurance producer may not issue, in lieu of a certificate, an agent's opinion letter or other correspondence that is inconsistent with
Minnesota Statutes 2008, section 60K.46, is amended by adding a subdivision
Subd. 8. Certificates of insurance. An insurance producer shall not issue a certificate of insurance, or other evidence of insurance coverage that either affirmatively or negatively amends, extends, or alters the coverage as provided by the policy, or provides notice of cancellation to a third party that exceeds the statutory notice requirement to a policyholder.