Certificate of Insurance Bill Makes Headway in Georgia

Agents in Georgia are urging their representatives to support a bill that would clarify the use of certificates of insurance issued to policyholders. Among other things, the bill would require certificate forms to be filed and approved by the insurance commissioner.

The bill (House Bill 66) has passed the Georgia House of Representatives with a vote of 157 to 1. HB 66, which has its origins in a directive from the state insurance department who last January issued a directive on the use of certificates. The directive restated that certificates are for information purposes only and confer no rights on the certificate holders outside the terms of their policies. The directive also reminded agents and policyholders that the intentional misuse of certificates is against the law. Under the insurance code, agents and certificate holders could be arrested for fraud and faced penalties up to $10,000 and between two to ten years in jail.

Agent groups have had longstanding problems with certificates that are often used to falsely show proof of coverage or amend the coverage to include provisions outside the certificate holders’ policy.

HB 66 makes two substantive changes to the law. First, it would require certificate forms to be filed and approved by the insurance commissioner. The bill would give the commissioner the right to disapprove a form if he finds the form unjust or misleading.

Second, it would require the certificates to include a statement saying, “This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. The certificated does not amend, extend, or alter the coverage, terms, exclusions and conditions afforded by the policies referenced herein.”

The bill also states that forms issued by the Association of Cooperative Operations Research or the Insurance Service Office are deemed to be approved by the commissioner as long as they comply with the other changes in the bill.

Topics Georgia