Relates to the issuance of certificates of insurance and requires the issuance of a certificate of insurance as a summary or evidence of property or casualty insurance.
STATE OF NEW YORK
________________________________________________________________________
3107--D
2013-2014 Regular Sessions
IN ASSEMBLY
January 23, 2013
___________
Introduced by M. of A. MORELLE, HEVESI, LUPARDO, WEPRIN, PERRY, JAFFEE,
SCHIMMINGER, LAVINE -- Multi-Sponsored by -- M. of A. BRAUNSTEIN,
McDONALD, MONTESANO, THIELE -- read once and referred to the Committee
on Insurance -- committee discharged, bill amended, ordered reprinted
as amended and recommitted to said committee -- again reported from
said committee with amendments, ordered reprinted as amended and
recommitted to said committee -- again reported from said committee
with amendments, ordered reprinted as amended and recommitted to said
committee -- reported and referred to the Committee on Codes --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the insurance law, in relation to certificates of insur-
ance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new article 5 to
2 read as follows:
3 ARTICLE 5
4 CERTIFICATES OF INSURANCE
5 Section 501. Definitions.
6 502. Prohibitions.
7 503. Applicability.
8 504. Enforcement.
9 505. Rules and regulations.
10 § 501. Definitions. For purposes of this section:
11 (a) "Certificate" or "certificate of insurance" means any document or
12 instrument, no matter how titled or described, which is prepared or
13 issued by an insurer or insurance producer as evidence of property or
14 casualty insurance coverage. "Certificate" or "certificate of insurance"
15 shall not include a policy of insurance or insurance binder, and does
16 not amend, extend or alter the coverage provided by the policy of insur-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06628-18-3
A. 3107--D 2
1 ance to which the certificate makes reference, and is subject to all the
2 terms, exclusions and conditions of such policy. A certificate of
3 insurance shall not confer to any person new or additional rights beyond
4 what the referenced policy of insurance expressly provides.
5 (b) "Certificate holder" means any person, other than a policyholder,
6 that is identified on the certificate as a certificate holder.
7 (c) "Insurance producer" has the meaning ascribed to it by subsection
8 (k) of section two thousand one hundred one of this chapter.
9 (d) "Insurer" means any person "doing an insurance business" as such
10 phrase is defined in section one thousand one hundred one of this chap-
11 ter.
12 (e) "Person" means any individual, partnership, corporation, associ-
13 ation, or other legal entity, but shall not include any governmental
14 entity, as that term is defined in this section.
15 (f) "Governmental entity" means any public entity as defined in para-
16 graph fifty-one of subsection (a) of section one hundred seven of this
17 chapter, any state authority as defined in subdivision one of section
18 two of the public authorities law, any local authority as defined in
19 subdivision two of section two of the public authorities law, and any
20 interstate or international authority as defined in subdivision three of
21 section two of the public authorities law.
22 (g) "Policyholder" means a person who has contracted with a property
23 or casualty insurer for insurance coverage.
24 § 502. Prohibitions. (a) No person or governmental entity shall
25 prepare, issue, request, or require the issuance of a certificate if
26 such person or governmental entity knows that such certificate does not
27 comply with the following provisions:
28 (1) A standard certificate of insurance form promulgated and author-
29 ized for use by the Association for Cooperative Operations Research and
30 Development (ACORD) or the Insurance Services Office (ISO);
31 (2) A form promulgated by the insurance company that has underwritten
32 the policy referenced in the certificate of insurance; or
33 (3) A form prepared, issued, or requested as evidence of insurance in
34 connection with a commercial lending transaction in which the underlying
35 property serves as the primary collateral securing the borrower's repay-
36 ment of the loan, including, but not limited to a form promulgated by
37 the Mortgage Bankers Association (MBA).
38 (b) No person or governmental entity shall alter, modify, request, or
39 require the alteration of a certificate of insurance form when such
40 person or governmental entity knows that such alteration, modification,
41 request or requirement is in violation of this article.
42 (c) No person or governmental entity shall request or require that a
43 certificate of insurance form contain additional terms, conditions, or
44 language of any kind not found in the insurance policy to which the
45 certificate makes reference or to an endorsement to such policy when
46 such person or governmental entity knows such request or requirement is
47 in violation of this article.
48 (d) No person or governmental entity shall request or require either
49 in addition to or in lieu of a certificate of insurance, an opinion
50 letter, warranty, statement, supplemental certificate or any other docu-
51 ment or correspondence that such person or governmental entity knows to
52 be inconsistent with the prohibitions of this section. However, an
53 insurer or insurance producer may prepare or issue an addendum to a
54 certificate that clarifies and explains the coverage provided by a poli-
55 cy of insurance and otherwise complies with the requirements of this
A. 3107--D 3
1 section, provided such authority is granted to the producer by the
2 insurer.
3 (e) No person or governmental entity shall request or require that a
4 certificate of insurance that such person or governmental entity knows
5 to contain references to a contract other than the insurance policy, or
6 warrant that the insurance policies referenced in the certificate comply
7 with the requirements of a particular contract provided however a
8 certificate may include a contract title or description for the sole
9 purpose of identifying the project for which the certificate was issued,
10 but such inclusion shall not be interpreted as warranting that the
11 insurance policies referenced in the certificate comply with the
12 requirements of such contract.
13 (f) No person or governmental entity shall request or require, prepare
14 or issue a certificate of insurance that such person or governmental
15 entity knows: (i) does not accurately state the terms of coverage
16 provided by the policy or policies of insurance to which the certificate
17 makes reference; (ii) purports to alter, amend, extend, or misrepresent
18 the terms of coverage to which the certificate makes reference; or (iii)
19 purports to confer to any person new or additional rights beyond what
20 the referenced policy of insurance expressly provides.
21 § 503. Applicability. The provisions of this section shall apply to
22 all certificate holders, policyholders, insurers, insurance producers,
23 or any other person and to certificate of insurance forms issued as
24 evidence of insurance coverages on property, operations, or risks
25 located in this state, regardless of where the certificate holder, poli-
26 cyholder, insurer, or insurance producer is located.
27 § 504. Enforcement. (a) The superintendent shall have the power under
28 section four hundred three of the financial services law to examine and
29 investigate the activities of any person that the superintendent reason-
30 ably believes has been or is engaged in an act or practice prohibited by
31 this article. The superintendent shall have the power to enforce the
32 provisions of this section and impose any authorized penalty or remedy
33 as provided under section four hundred eight of the financial services
34 law against any person who violates this article.
35 (b) The office of the state inspector general shall have the power
36 pursuant to section fifty-three of the executive law to investigate any
37 governmental entity that is considered a covered agency under section
38 fifty-one of the executive law that has been or is engaged in an act or
39 practice prohibited by this article. If a governmental entity not
40 considered a covered agency under section fifty-one of the executive law
41 has been or is engaged in an act or practice prohibited by this article,
42 that entity's inspector general, other compliance or internal investi-
43 gative unit or other official or entity with proper authority shall have
44 the power to investigate such entity.
45 § 505. Rules and regulations. The superintendent may adopt rules or
46 regulations as he or she considers appropriate to carry out the
47 provisions of this article.
48 § 2. This act shall take effect on the ninetieth day after it shall
49 have become a law.
