New Certificate of Insurance Laws

by Richard Kielbania on February 24, 2015

in Insurance & Reinsurance

InsuranceNew York has adopted a law standardizing the use of certificates of insurance.  The new law, A.9590/S.6545-A, was modelled after a similar national bill and modified to comply with New York state insurance laws.

A.9590 was adopted to address problems that occur when certificates of insurance are issued and they do not accurately represent policy coverages.  The new law requires certificates of insurance to accurately reflect the coverages in the underlying insurance policies.  It will now be illegal for anyone to require or request a certificate of insurance to have language added to it that does not properly represent the coverage in the underlying insurance policy.

Before A.9590, New York did not have any insurance law provision specifically preventing people from engaging in the practice of altering certificates of insurance.  Certificates of insurance were being used as vehicles to add coverages and terms that were not actually in the underlying insurance policy.  This created problems for brokers and agents, as well as insured consumers.  By prohibiting insurers from adding misleading language to certificates of insurance, there will be less complications for both the insurance industry and the insured.  Individuals will be able to trust that the information contained within the certificate is correct.

The new law allows New York state agencies to continue using their own certificate forms as long as they are accurate and are properly reviewed by the insurance department.

By adopting this new law, New York has joined about 25 other states that have adopted laws prohibiting the improper use of certificates of insurance.  A few weeks before New York passed A.9590, Massachusetts passed S.B.2402, which also prohibits the preparation or issuance of a certificate of insurance that contains misleading or false information about an underlying policy.

New York’s new insurance law will go into effect mid-February.

PIB Law represents national banks, retailers, reinsurers, insurers, mortgage lenders and financial services companies from its offices in New Jersey, New York City, Philadelphia, Orange County, Boston, San Antonio, and Chicago.  For more information on reinsurance and insurance issues, contact PIB Law at 908-725-9700.

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