​​(DeWitt, New York, Jan. 29, 2015) — New York’s leading insurance producer trade group today is celebrating a major win for producers who issue certificates of insurance, after legislation it helped develop was signed by Gov. Andrew Cuomo on January 29th. The Independent Agents and Brokers of New York said that the new law will stop businesses and government agencies from pressuring insurance producers into issuing false or misleading certificates of insurance.

“This is a great moment for New York’s law-abiding insurance producers,” said IIABNY Chair of the Board James D. Sutton, CPCU, AAI, CIC. “Insurance agents and brokers should not have to choose between earning a living and obeying the law. IIABNY worked long and hard to see that this legislation was enacted and I’m pleased that all our efforts have finally paid off.”

Certificates of insurance are one- or two-page forms. Businesses commonly give them to other businesses or government entities for which they are doing work. These forms summarize the terms of the businesses’ insurance policies.

For years, insurance producers have struggled with increasing demands from both private and governmental organizations that have insisted that producers enter statements on certificates that change policy terms. Those who refuse to meet these demands face threats of losing their customers. 

New York Insurance Law prohibits insurance producers from using certificates of insurance to change a policy’s coverage. Those who do are subject to being disciplined by the New York State Department of Financial Services (DFS).

The governor signed this year’s bill contingent on the legislature passing a chapter amendment early in the 2015 legislative session. IIABNY has been working with the governor’s office, the DFS, and the Legislature for the past several weeks to come to an agreement on these amendments.

When the chapter amendment is enacted, the new law will become effective 180 days after signature, and will resolve the problem by:

• Prohibiting anyone from requiring a certificate to include terms, conditions or language of any kind, including warranties or guarantees, when these are not found in the policy.
• Clarifying that certificates cannot change coverage provided by the policy and cannot confer new rights.
• Prohibiting anyone from requiring a producer to issue a liability certificate unless it is: 1) a form issued by the insurer, 2) a standard certificate issued by an industry standard-setting organization that has been approved by DFS, or 3) any other form which has been approved for use by the DFS.
• Authorizing the DFS to levy fines up to $2,000 for those in the private sector that violate the law.

IIABNY has been working to resolve certificate abuse for the past few legislative sessions.

IIABNY played a key role in drafting the legislation, sponsored by Insurance Committee Chair Sen. James L. Seward (R-Milford) and Assembly Majority Leader Joseph D. Morelle (D-Irondequoit). The association also negotiated directly with numerous interested groups to resolve concerns with the bill.

IIABNY was successful in having a similar bill passed by both chambers of the legislature in 2013 which would have required the use of ACORD or ISO forms. Gov. Cuomo vetoed that bill out of concerns that the ACORD form might not meet the needs of state agencies. To address this concern, IIABNY developed amendments that would permit state agencies to use their own forms provided the DFS had approved them first.

“We wish to thank our bill sponsors Senator Jim Seward and Assemblyman Joe Morelle, the governor, his staff, and the leadership and staffs of the Assembly and Senate for helping enact this badly-need law,” said Sutton.

 

About IIABNY

The Independent Insurance Agents & Brokers of New York, Inc. has represented the common business interests of independent insurance professionals since 1882. More than 1,750 agencies and their 13,000 plus employees currently rely on the DeWitt, New York-based not-for-profit trade association for legislative advocacy, continuing education and other means of industry support. In addition, most IIABNY members proudly identify themselves as Trusted Choice® agents and brokers, a national consumer brand uniting more than 21,000 independent agencies across the United States.