The Texas Legislature has passed a measure that requires regulatory approval of property and casualty certificate of insurance forms provided to insureds as proof of coverage.
Certificates of insurance are widely used in commerial insurance, especially in the construction industry, and insurance agents traditionally have been asked to provide the certificates to insureds and interested parties. As a result agents are often brought into disputes over policy terms and coverages because of language contained in the certificates.
Under Senate Bill 425 only approved certificate of insurance forms may be issued to an insured. It prohibits a property/casualty insurers and agents issuing certificates of insurance or other documents intended to be used as proof of coverage “if the certificate or document alters, amends, or extends the coverage or terms and conditions provided by the insurance policy referenced on the certificate or document.”
Penalties may be assessed by the Texas Department of Insurance for noncompliance, and the department may collect a fee of up $100 for the filing of a new or amended certificate of insurance form.
The legislation was backed by agents’ groups, including the Independent Insurance Agents of Texas.