Connecticut Gov. Dannel P. Malloy recently signed into law H.B.5248 that prohibits the inappropriate use and issuance of certificates of insurance.
The Professional Insurance Agents of Connecticut Inc., an industry association which has been an active supporter of H.B.5248, applauded the bill’s signing. The association said insurance producers in Connecticut have often been pressed by third parties to issue certificates of insurance that seem to expand or amend the policy or make representations about the policy’s fitness for specific contracts, or issue non-certificate advisory documents attempting to make similar statements.
Public Act No. 14-74 (“An Act Concerning Certificates of Insurance for Property and Casualty Insurance Coverage”) was signed by the governor on June 3 and will take effect on Oct. 1, 2014. The Act states that no person shall:
(1) prepare, deliver or issue for delivery a certificate of insurance that contains false or misleading information about the coverage provided by the referenced insurance policy;
(2) prepare the alteration or amendment of a certificate of insurance or deliver or issue for delivery a new certificate of insurance unless such alteration, amendment or new certificate accurately reflects the provisions of the referenced insurance policy; or
(3) represent that (A) a certificate of insurance confers new or additional rights to any person beyond those provided for in the referenced insurance policy, or (B) amending such certificate will alter, amend or extend the coverage provided by the referenced insurance policy.
The Act also states that no certificate of insurance shall warrant that the referenced insurance policy complies with the insurance requirements of a contract. The inclusion of a contract number or contract description on the certificate shall not be construed as making such a warranty.
Additionally, the Act states that no person shall prepare, issue, demand or require — in addition to or in lieu of a certificate of insurance — an opinion letter or other document or correspondence that is inconsistent with the provisions of the law, except that an insurer or insurance producer may prepare or issue an addendum to a certificate of insurance that clarifies and explains the coverage provided by the referenced insurance policy and that otherwise complies with the provisions.
The law also states no person shall request or require another person to perform any act that violates the provisions.
“PIACT applauds Gov. Malloy for his leadership in recognizing the importance of this law,” said Professional Insurance Agents of Connecticut President Peter Frascarelli. “It allows diligent and responsible professional, independent insurance agents to refuse to issue inaccurate certificates of insurance without being put in an awkward position in which they may be perceived as not helping out their clients.”