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PIA Applauds NCOIL Efforts on Certificates of Insurance

The National Conference of Insurance Legislators (NCOIL), led by President George Keiser (ND), is scheduled to discuss a model law designed to "clarify limitations on...
July 6, 2011

The National Conference of Insurance Legislators (NCOIL), led by President George Keiser (ND), is scheduled to discuss a model law designed to "clarify limitations on the use of certificates of insurance" during its upcoming meeting next week. PIA supports NCOIL's efforts to help us resolve the problems our members have with some unreasonable demands to issue certificates that do not accurately reflect the underlying policy coverage and we look forward to working with the legislators to help craft an effective model.

Unfortunately, some people in the lending community, represented by the American Council of Life Insurers (ACLI), are attempting to exempt themselves from the reasonable provisions in the law that essentially codify longstanding insurance common law and practice. We do not think an entire segment of the industry should be exempted from a law that has a stated purpose of promoting a "transparent system that discourages fraud and misuse." We have been working with ACLI and others in the industry to craft compromise language that would be acceptable to all parties and we remain willing to continue these efforts, but we strongly believe an outright exemption from the model could impede our efforts to fight fraud and abuse.

The original NCOIL model effectively addresses the issues we have regarding certificates of insurance. PIA supports the original NCOIL model legislation without the ACLI amendment because it ensures that certificates will be used for their intended purpose, fostering transparency and certainty, while helping prevent their misuse. The NCOIL model has been carefully crafted to avoid unintended consequences; no change in existing law regarding insurance policies is made by this model. The model relates only to certificates of insurance. In addition, this model does not alter or impair the rights that any person has under an insurance policy. The only parties that would be adversely affected by the provisions in this model are those who would illegally demand certificates that do not accurately depict the underlying insurance coverage.

PIA commends NCOIL for its efforts to help us fight fraud in the property and casualty insurance industry and we look forward to participating in the discussion at the NCOIL summer meeting.

Learn more about certificates of insurance: ACORD and PIA National Team up on Certificate Education

July 6, 2011