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
________________________________________________________________________
6545--A
Cal. No. 150
IN SENATE
February 4, 2014
___________
Introduced by Sens. SEWARD, LATIMER, MARTINS -- read twice and ordered
printed, and when printed to be committed to the Committee on Insur-
ance -- reported favorably from said committee, ordered to first and
second report, ordered to a third reading, amended and ordered
reprinted, retaining its place in the order of third reading
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-
17 ance to which the certificate makes reference, and is subject to all the
18 terms, exclusions and conditions of such policy. A certificate of
19 insurance shall not confer to any person new or additional rights beyond
20 what the referenced policy of insurance expressly provides.
21 (b) "Certificate holder" means any person, other than a policyholder,
22 that is identified on the certificate as a certificate holder.
23 (c) "Insurance producer" has the meaning ascribed to it by subsection
24 (k) of section two thousand one hundred one of this chapter.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13740-03-4
S. 6545--A 2
1 (d) "Insurer" means any person "doing an insurance business" as such
2 phrase is defined in section one thousand one hundred one of this chap-
3 ter.
4 (e) "Person" means any individual, partnership, corporation, associ-
5 ation, or other legal entity, but shall not include any governmental
6 entity, as that term is defined in this section.
7 (f) "Governmental entity" means any public entity as defined in para-
8 graph fifty-one of subsection (a) of section one hundred seven of this
9 chapter, any state authority as defined in subdivision one of section
10 two of the public authorities law, any local authority as defined in
11 subdivision two of section two of the public authorities law, and any
12 interstate or international authority as defined in subdivision three of
13 section two of the public authorities law.
14 (g) "Policyholder" means a person who has contracted with a property
15 or casualty insurer for insurance coverage.
16 § 502. Prohibitions. (a) No person or governmental entity shall
17 prepare, issue, request, or require the issuance of a certificate if
18 such person or governmental entity knows that such certificate does not
19 comply with the following provisions:
20 (1) The certificate is a standard certificate of insurance form
21 promulgated and authorized for use by the Association for Cooperative
22 Operations Research and Development (ACORD) or the Insurance Services
23 Office (ISO);
24 (2) The certificate is a form promulgated by the insurance company
25 that has underwritten the policy referenced in the certificate of insur-
26 ance; or
27 (3) The certificate is a form prepared, issued, or requested as
28 evidence of insurance in connection with a commercial lending trans-
29 action in which the underlying property serves as the primary collateral
30 securing the borrower's repayment of the loan, including, but not limit-
31 ed to a form promulgated by the Mortgage Bankers Association (MBA).
32 (4) The certificate is a form promulgated by a governmental entity
33 that is considered a covered agency under section fifty-one of the exec-
34 utive law, provided such form has been approved for use by the super-
35 intendent.
36 (b) No person or governmental entity shall alter, modify, request, or
37 require the alteration of a certificate of insurance form when such
38 person or governmental entity knows that such alteration, modification,
39 request or requirement is in violation of this article.
40 (c) No person or governmental entity shall request or require that a
41 certificate of insurance form contain additional terms, conditions, or
42 language of any kind not found in the insurance policy to which the
43 certificate makes reference or to an endorsement to such policy when
44 such person or governmental entity knows such request or requirement is
45 in violation of this article.
46 (d) No person or governmental entity shall request or require either
47 in addition to or in lieu of a certificate of insurance, an opinion
48 letter, warranty, statement, supplemental certificate or any other docu-
49 ment or correspondence that such person or governmental entity knows to
50 be inconsistent with the prohibitions of this section. However, an
51 insurer or insurance producer may prepare or issue an addendum to a
52 certificate that clarifies and explains the coverage provided by a poli-
53 cy of insurance and otherwise complies with the requirements of this
54 section, provided such authority is granted to the producer by the
55 insurer.
S. 6545--A 3
1 (e) No person or governmental entity shall request or require a
2 certificate of insurance that such person or governmental entity knows
3 contains references to a contract other than the insurance policy, or
4 warrants that the insurance policies referenced in the certificate
5 comply with the requirements of a particular contract provided however a
6 certificate may include a contract title or description for the sole
7 purpose of identifying the project for which the certificate was issued,
8 but such inclusion shall not be interpreted as warranting that the
9 insurance policies referenced in the certificate comply with the
10 requirements of such contract.
11 (f) No person or governmental entity shall request or require, prepare
12 or issue a certificate of insurance that such person or governmental
13 entity knows: (i) does not accurately state the terms of coverage
14 provided by the policy or policies of insurance to which the certificate
15 makes reference; (ii) purports to alter, amend, extend, or misrepresent
16 the terms of coverage to which the certificate makes reference; or (iii)
17 purports to confer to any person new or additional rights beyond what
18 the referenced policy of insurance expressly provides.
19 § 503. Applicability. The provisions of this section shall apply to
20 all certificate holders, policyholders, insurers, insurance producers,
21 or any other person and to certificate of insurance forms issued as
22 evidence of insurance coverages on property, operations, or risks
23 located in this state, regardless of where the certificate holder, poli-
24 cyholder, insurer, or insurance producer is located.
25 § 504. Enforcement. (a) The superintendent shall have the power under
26 section four hundred four of the financial services law to examine and
27 investigate the activities of any person that the superintendent reason-
28 ably believes has been or is engaged in an act or practice prohibited by
29 this article. The superintendent shall have the power to enforce the
30 provisions of this section and impose any authorized penalty or remedy
31 as provided under section four hundred eight of the financial services
32 law against any person who violates this article.
33 (b) The office of the state inspector general shall have the power
34 pursuant to section fifty-three of the executive law to investigate any
35 governmental entity that is considered a covered agency under section
36 fifty-one of the executive law that has been or is engaged in an act or
37 practice prohibited by this article. If a governmental entity not
38 considered a covered agency under section fifty-one of the executive law
39 has been or is engaged in an act or practice prohibited by this article,
40 that entity's inspector general, other compliance or internal investi-
41 gative unit or other official or entity with proper authority shall have
42 the power to investigate such entity.
43 § 505. Rules and regulations. The superintendent may adopt rules or
44 regulations as he or she considers appropriate to carry out the
45 provisions of this article.
46 § 2. This act shall take effect on the ninetieth day after it shall
47 have become a law.
