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PIA National to Continue Work on Certificates at NCOIL Meeting

The National Conference of Insurance Legislators, led by President Carroll Leavell (NM), will hold its summer meeting in Burlington, Vermont July 12-15 and PIA National will be there to work with the legislators on a variety of issues affecting independent agents including certificates of insurance, producer licensing and natural catastrophes
July 10, 2012

The National Conference of Insurance Legislators, led by President Carroll Leavell (NM), will hold its summer meeting in Burlington, Vermont July 12-15 and PIA National will be there to work with the legislators on a variety of issues affecting independent agents including certificates of insurance, producer licensing and natural catastrophes.

PIA National President-Elect Andrew Harris has been working with the legislators and other interested parties to help bring about a resolution to the problem agents have with demands for improper certificates and Mr. Harris will attend the summer meeting to continue these efforts. On July 13, as well as during special sessions on July 14 and 15, the Property and Casualty Committee, led by Chairman Steve Riggs (KY), will consider a proposed substitute version of a Certificates of Insurance Model Act that was offered by the P&C industry as an alternative to an original draft set aside by the Committee on a May 11 conference call. The substitute model was proposed by AIA, IIABA, NAMIC, PIA and PCI and, much like the original version, aims to clarify limits on certificates and to help prevent fraud and misuse. The substitute model bans changes to certificate forms and asserts that certificates are not insurance policies and can not provide different coverage than the policy does.

Read PIA National President-Elect Andrew Harris' Certificates article: NCOIL and NAIC Should Work Together to Modernize Regulation (PIA Connection November/December 2011)

Read the entire article on VA's regulations on certificates: Virginia Begins Enforcing Proper Usage of Certs (Insurance Journal 7/2/12)

The legislators will also consider an insurance binder law model, sponsored for discussion by Rep. Matt Lehman (IN) that attempts to address some lender concerns that certificates need to be more than “for information-only,” among other things. The binder model is based on New York law and would make it clear that binders remain in effect until the policy is issued. PIA National submitted comments to the legislators on these issues and we plan to continue working them to help resolve these longstanding problems. We commend the legislators for their diligent attention to these matters.

Natural Catastrophes – On July 13, the NCOIL P&C Committee will consider a proposed Resolution Supporting State Control over Natural Catastrophe Policy, sponsored by Rep. Greg Wren (AL). The resolution highlights NCOIL building code and other natural catastrophe efforts, supports state rights to establish catastrophe mechanisms and, among other things, opposes federal backstops that could intrude on state regulation and private markets. PIA supports state regulation of insurance and we commend Representative Wren for highlighting this critical issue at NCOIL. PIA National’s Natural Catastrophe Working Group is made up of agents from all over the country and is led by Chairman Jim Beathard (TX). The PIA Nat Cat Working Group has long advocated for state based solutions to help bring private markets back to distressed catastrophe prone areas while recognizing the critical role of the federal government in helping states prepare for and recover from natural catastrophes.

Producer Licensing – On July 12, the NCOIL State-Federal Relations Committee, led by Chairman Keith Faber (OH), will consider a proposed Resolution Urging Producer Licensing Modernization, sponsored for discussion by NCOIL President Carroll Leavell (NM). The resolution builds on long-standing NCOIL support for producer licensing reform by endorsing regulatory uniformity, encouraging states to continue their ongoing state modernization efforts to help forestall federal regulatory intrusion, and urges state legislators and regulators to work together to eliminate unnecessary non-resident licensing barriers. PIA supports this resolution and has long advocated for state based solutions to our licensing inefficiencies.

Legal Funding, Travel Insurance Model Acts – On July 13, NCOIL legislators will consider a proposed Consumer Legal Funding Model Act, sponsored by Rep. Charlie Curtiss (TN). The model is based on Tennessee legislation that would mandate various contract disclosures for legal financing and gives consumers the right of rescission. The model would also prohibit funding providers from paying referral fees to attorneys, medical providers, and others; establish a process for distribution of proceeds; require payment to the funding provider based on predetermined times and amounts; and prevent funding providers from assessing fees more than three (3) years after the consumer receives his/her money from the funding company.

The legislators will also consider a proposed Limited Lines Travel Insurance Model Act, sponsored for discussion by Rep. Robert Damron (KY). The model would set forth licensing and other requirements for limited lines travel insurance producers. Under the model, marketing materials must clearly identify a travel insurance producer and the producer must keep a register of travel companies/retailers who offer travel insurance on the producer’s behalf. Producers would have to comply with state insurance laws including and fingerprinting for background checks.