1.What is a Certificate of Insurance, and what is it NOT?
A Certificate of Insurance is:
· A synopsis of coverage
· A snapshot of coverage as it exists at the time the cert is issued
· Provided for information purposes
A Certificate of Insurance is not:
· A contract with the certificate holder
· A document conferring rights on the certificate holder, a party with which neither the agent nor the
company has a business relationship of any kind
· A document which alters coverage in any way
2. What does Georgia Regulation say about Certificates of Insurance?
In its 2011 session, the legislature passed H.B 66, authored by Representative Howard Maxwell. The law, codified at O.C.G.A. 33-24-19.1, addressed agents’ longstanding problems with certificates of insurance by setting forth clearly what a certificate is and is not; by putting certificate holders under the regulatory authority of the Commissioner of Insurance; and by requiring that certificate forms be approved by the Insurance Department.
It is important to point out that these provisions in the 2011 law did not make substantive changes in the law. They merely said plainly and in one place what was already the case. A Directive issued in 1988 and an updated Directive issued in 2011 addressed the issue and stated that coverage could not be altered by a certificate. (The Directives have been superseded by the revisions to the law and by the Department’s regulation and have been withdrawn.)
3. Is there a required format for Certificates of Insurance in the state of Georgia?
Certificates of Insurance must be issued on the form approved by the Department of Insurance. The Georgia certificates law made the two substantive changes mentioned above as well as making it illegal to issue any certificate on a form unless the form is approved by the Department. ISO and ACORD forms are deemed to be approved and require no specific action by the Department. This provision was designed to stop cert holders from creating their own forms which purport to amend coverage or create a guarantee of some sort to the cert holder.
4. What are Agents required to do in the State of Georgia if someone insists that the regulations regarding Certificates of Insurance not be followed?
The second substantive change put cert holders under the regulatory authority of the Insurance Commissioner. In the past, it was illegal for agents and companies to issue improper certificates, but it was not illegal for certificate holders to ask for one. The law filled that gap and provided enforcement mechanisms.
The law took effect on July 1, 2011. It was self-executing and its provisions have been in effect since that time.
5. How can I get a copy of the Regulation and subsequent orders?
After the law took effect, the Insurance Department began working on a regulation to aid in the implementation of the law. On May 2, 2013, the Insurance Commissioner issued an order adopting the regulation which took effect on May 22, 2013.
6. What will happen if someone requires that a Certificate of Insurance be issued outside the requirements of Georgia Regulation?
If they refuse to allow compliance, they should be reported to the Georgia Department of Insurance. Complaints against someone who may be violating the Georgia Certificate Law or Regulation are to be emailed to email@example.com and include the following information:
- Name and contact information of organization being asked to violate the regulation (e.g. email address and phone number);
- Name of the entity acting in violation of the law;
- The specific details regarding that violation;
- Dates of the violations; and
- Documents (if any) which provide evidence that an entity may be operating in violation of the law
The above email address for complaints is directed to the person in the Department who is assigned to the task of processing complaints and issuing warning letters to cert holder and others violating the law.
7. Does the Georgia regulation apply to Georgia agents whose insureds (from Georgia or elsewhere) are doing work outside of Georgia?
Georgia’s law and regulation apply to “all certificate holders, policyholders, insurers, insurance producers, and certificate of insurance forms issued as evidence of insurance coverages on property, operations or risks located in this state, regardless of where the certificate holder, policyholder, insurer or insurance producer is located.” Note the italicized words: coverages on property, operations or risks located in this state.
That is the key. Where are the property, operations, and risk located? If the property, or the operation, or the risk is in Georgia, then Georgia rules apply and the Georgia Department of Insurance has jurisdiction. Otherwise, the applicable rules are the rules of the state where the property, operations, or risk is located.
Keep in mind the same principles about certificates of insurance are the same in all states. Details vary, but a certificate can’t be used to expand or modify coverage whether the risk is in Georgia or Maine or Hawaii. Many states have passed laws, adopted regulations, or issued bulletins or directives that state what can and can’t be done with certificates in those states. Chances are that if what you are being asked to do violates Georgia law it also violates the law of the state where the risk is sited. Refer to the information guide provided by the IIAG.
‘* Information provided by the IIAG