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NCOIL Continues Progress on Certificate Model

The National Conference of Insurance Legislators (NCOIL) Property and Casualty Committee chaired by state representative Steve Riggs (KY) met by conference call on Thursday, September 27 to discuss their Certificates of Insurance Model Act...
October 4, 2012

The National Conference of Insurance Legislators (NCOIL) Property and Casualty Committee chaired by state representative Steve Riggs (KY) met by conference call on Thursday, September 27 to discuss their Certificates of Insurance Model Act. PIA National supports the model and opposes the two amendments proposed by the Mortgage Bankers Association (MBA) and sponsored by Representative Barry Hyde (AR).

The legislators spent much of the time on the call discussing the first MBA amendment which would list the MBA, along with ACORD, ISO and AAIS as a standard setting organization and therefore certificate forms filed by MBA would be deemed approved by the insurance department. For many reasons, PIA strongly opposes this amendment and we made this position clear on the call as well as in a joint letter we signed on to with other industry colleagues. Although the committee did not take any votes, the discussion among the legislators seemed to indicate very little, if any, support for the MBA amendment.

The legislators next turned to an amendment offered by AIG making it clear that if there are federal regulations that may conflict with this model, the federal law would apply. Our members are concerned this amendment could leave a wide loophole for offenders, so we plan to work with AIG, the legislators and other interested parties to make sure it is more narrowly crafted.

The legislators did not have time address the second MBA amendment, which says that certificates of insurance may not be issued as “information only” to commercial lenders. PIA National strongly opposes this amendment. The legislators will discuss this issue again during their annual meeting in Point Clear, AL November 15-18. We are hopeful that the model will be finalized at the annual meeting so states that are looking at this issue can use the model during their legislative sessions next year.