“The critical role that certificates of insurance play in many business transactions underscores the importance of this issue,” says Bob Fulwider, Big “I” chairman. “The increasing complexity of transactions, volume of certificates requested, and speed required for their issuance all contribute to the need for the industry to meeting the growing demand more efficiently.”
The policy addresses four main areas of concern: form selection; content; preparation, maintenance and notices; and misrepresentation or fraud.“The Big ‘I’ is taking a leadership role on this issue because it affects the agency operations of our members each day, “ says Bob Rusbuldt, Big “I” president & CEO.
“We want to work with our carrier partners and other industry participants to enhance the certificates process while protecting the integrity of the policies sold.”On form selection for certificates, there is often undue pressure exerted on those preparing certificates to use forms that are improper for the requests made (such as seeking confirmation of coverage that is not available or in place), or that have been withdrawn or replaced.
The policy says that the industry should only support the use of certificates that are approved by carriers for the policies they issue, and that comply with applicable contractual and legal/regulatory requirements. Certificate forms should be reviewed and updated regularly to remain responsive to changing business needs.On certificates form content, agents and brokers frequently receive requests for deletions, additions or other changes to forms, including customization of certificates to meet the specific or unique needs or desires of an insured or other party.
The policy calls on the industry to implement business practices that support enforcement of the laws/regulations prohibiting modification of certificates or underlying insurance coverages except in cases permitted by law and approved by the carrier issuing the policy. The industry also should support the use of uniform language on any forms used to respond to policyholders’ needs about insurance coverages in place so that policy requirements for notification of cancellation, nonrenewal and/or material change in risk are not altered.
Carriers should be responsive to requests for customized certificates as and when needed.When preparation, maintenance and notices are largely manual processes, it is quite time consuming and costly, particularly for agents and brokers with a significant number of insureds that have construction policies in force. The policy statement calls on the industry to support the development of automated online tools to provide appropriate parties with timely and accurate policy information. This could be done in real-time, enhancing responsiveness to policyholders’ needs, while concurrently providing safeguards against the use of certificate forms that have been withdrawn, replaced or improperly altered.
On misrepresentation or fraud, when insureds cannot obtain the desired certificates, some have prepared their own form or revised a form provided to them. This kind of activity often involves misrepresentation and/or fraud, and as such, is illegal. The policy statement urges the enforcement of all laws/regulations prohibiting misrepresentation and/or fraud in connection with the preparation, dissemination and/or use of certificates or other information concerning insurance policies. It also recommends that information about the importance of accuracy of representations relative to insurance policies be made available to industry participants and those seeking certificates.
“The Big ‘I’ looks forward to engaging in a constructive