Certificates of Insurance
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Certificates of Insurance – Unfair trade practices:
Effective July 1, 2012 Certificates of insurance will be regulated by the Bureau of Insurance. Legislation passed during the 2012 session of the Virginia General Assembly that added a regulation related to certificates in the Unfair Trade Practices section of the Virginia Code. In short, the new legislation provided for the following:
Certificates of insurance; property and casualty insurance. Prohibits any person from (i) issuing or delivering a certificate of insurance that attempts to confer any rights upon a third party beyond what the referenced policy of insurance expressly provides; (ii) knowingly demanding or requiring the issuance of a certificate of insurance from an insurer, insurance producer, or policyholder that contains any false or misleading information concerning the policy; (iii) knowingly preparing or issuing a certificate of insurance that contains any false or misleading information or that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy; and (iv) issuing or delivering a certificate of insurance that does not contain a statement regarding such matters. However, such a statement is not required if a certificate of insurance is required by a state or federal agency and accurately reflects the coverage provided by the underlying policies. A certificate of insurance may not represent an insurer's obligation to give notice of cancellation or nonrenewal to a third party unless the giving of the notice is required by the policy. The State Corporation Commission is authorized to determine if a person is engaged in such practice prohibited as an unfair trade practice.
To assist you in learning more about the new law, this resource center has been provided for your information and review:
- The Law as passed - SB 47: This is the actual language of IIAV’s Senate proposal as passed. HB 867 is identical. You should be familiar with the actual wording of the legislation as passed and signed by the Governor.
- SB 47 & HB 867 Impact Statement: Impact Statements are provided to legislators in order that they know the implications of legislation before them. This impact statement – written by the Bureau of Insurance and copied to other state administrative departments – makes it abundantly clear what the impact of this law will have especially on the Bureau’s regulatory authority. Following this impact statement, there should be no question as to their authority and effective July 1, 2012 it will be the Public Policy of the State.
- BOI Administrative Letter: Released by the Bureau of Insurance in April 2011, it is still useful to send this letter to 3rd party certificate holders.
- BOI Administration Letter 2012-07
- ACORD Frequently Asked Questions: An excellent resource on what you can and cannot do on Certificates of Insurance.
The Bureau of Insurance has wide latitude in regard to penalties to enforce the public policy as stated in SB 47 and HB 867. These are contained in the Virginia Code §38.2-200 Provisions of a General Nature. In short, as IIAV’s legal counsel once said, “a cease and desist order from the Bureau of Insurance is not something you will want to take lightly.”
News & Articles:
For more detailed information or questions, please don’t hesitate to contact the Virginia Bureau of Insurance 804-371-9185 or IIAV at 804-747-9300.