HCS/HB 407 - This act prohibits a person from preparing, issuing, or requesting the issuance of a certificate of insurance form relating to property and casualty insurance unless it has been filed with the director of the Department of Insurance . In addition, no person shall alter or modify a filed certificate of insurance form. Under the terms of the act, certificates of insurance must contain certain statements. The certificate of insurance must contain a statement to the effect that it confers no rights upon the certificate holder and that it does not amend or alter the coverage terms or other conditions contained in the actual policies referenced in the certificate.
The act prohibits persons from preparing or issuing certificates of insurance that contain false or misleading statements.
Under the act, a certificate of insurance is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter coverage afforded by the policy to which the certificate of insurance makes reference. A certificate of insurance shall not confer to a certificate holder new or additional rights beyond what the referenced policy of insurance expressly provides.
No certificate of insurance shall contain references or opinions on the effect of any contracts, including construction or service contracts, other than the referenced contract of insurance.
Under the act, a certificate holder shall only have a legal right to notice of cancellation, nonrenewal, or any material change, or any similar notice concerning a policy of insurance if the person is named within the policy or any endorsement or rider and the policy or endorsement or rider requires notice to be provided. The terms and conditions of the notice, including the required timing of the notice, are governed by the policy of insurance and shall not be created or altered by a certificate of insurance.
Under the act, an insurance producer may charge a reasonable service fee for issuing a certificate to a policyholder or certificate holder.
If the director determines that a person has violated a provision of this act, the director may issue such administrative orders as authorized under law and a violation of this act constitutes a level two violation.
Under the terms of the act, any lender requesting use of an evidence of commercial property insurance, which has not been approved for use by the insurer issuing the insurance policy, and the insurance producer has advised the lender in writing that the insurance provider has not been authorized to use the requested evidence of commercial insurance shall have no cause of action against an insurance producer arising from the use of such form, except for acts of intentional misrepresentation or fraud.
STEPHEN WITTE