(DeWitt, New York, June 2, 2013) — The Independent Insurance Agents & Brokers of New York (IIABNY) today praised the New York State Senate for passing a measure that would curb abuse of certificates of insurance. The bill, which IIABNY played a major role in developing, cleared the Senate by a large margin on May 29. It has gone to the State Assembly for consideration there.

“Law-abiding insurance agents and brokers are committed to helping their clients anyway they can,” said IIABNY Chair of the Board Andrew J. Kaufman. “However, the abusive demands of some businesses and government agencies for certificates of insurance have forced agents and brokers to choose between complying with the law and keeping a valued client. This bill will keep them from having to make that choice.”

Certificates of insurance are one- or two-page forms that businesses commonly give other businesses or government entities for which they are doing work. These forms summarize the terms of the insurance policies the businesses have purchased.

In recent years, insurance producers in New York and throughout the U.S. have reported increasing demands from many organizations that producers make statements on certificates to change a policy’s terms. Organizations often insist that certificates promise lengthy advance notice if the insurance company or the insured business cancels the policy or makes major changes. Another common demand is for guarantees of complete coverage for indemnity agreements between the organization and the insured business. Producers are also pressed to make warrantees that the policies comply with all requirements of often-complex contracts.

Insurance producers who comply with these demands risk breaking insurance law and incurring fines for issuing fraudulent certificates. Those who refuse risk losing customers.

IIABNY played a key role in drafting the Senate bill, S.3084A, sponsored by Insurance Committee Chair Sen. James L. Seward (R-Milford). The association also worked with other interested groups to resolve differences over the wording. The resulting bill would prohibit a number of practices, including:

• Altering or modifying a certificate of insurance
• Requesting the issuance of a certificate that contains false or misleading information
• Issuing a certificate that changes the terms or coverage provided by the insurance policy, and
• Issuing an opinion letter or similar document that violates any of these other prohibitions.

“I want to thank Sen. Seward for leading this effort to stop these unfair demands on insurance producers,” said Kaufman. “We are grateful that the Senate recognized the importance of this problem. We urge the New York State Assembly to pass the bill swiftly and send it to Gov. Andrew Cuomo for his signature.”

A companion bill, A.3107B, was introduced in the Assembly by Majority Leader Joseph D. Morelle (D-Irondequoit) and awaits action by that body’s Insurance Committee.