A recent edition of IA News & Views asked this question. My first thought was why bother, since under Georgia law an insurance certificate is “not a policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance makes reference” and does “not confer to a certificate holder new or additional rights beyond what the referenced policy of insurance expressly provides.” However, a review of the materials on the IIABA website page that is devoted to issues involving insurance certificates convinced me otherwise.
It turns out that the language of some insurance policies may be interpreted to provide coverage based on the contents of an insurance certificate issued by an agent regarding the policy. If that is the case, then the failure of the agent to give a copy of the insurance certificate to the insurance company could be a basis for the insurance company to escape responsibility for providing coverage, leaving the agent with that liability exposure. To make sure an agent or agency does not fall into any such traps for the unwary, I agree with the conclusion expressed on IIABA’s website page that copies of all insurance certificates issued should be sent to the insurance company involved regardless of what that company has said about the subject, unless the company is willing to indemnify and hold harmless an agent or agency for any claims that may arise based on the issuance of an insurance certificate.
In addition to the above practical reason for providing a copy of all insurance certificates issued to the insurance company involved, a regulation adopted by the Georgia Insurance Commissioner’s Office could be interpreted to require that to be done. That regulation, 120-2-103-.06, requires an insurance company to “provide to their producers written instructions clearly outlining the insurer’s procedures and each party’s responsibilities for issuing and servicing certificates”, which procedures are to include a method to “monitor certificates to ensure they have been issued in compliance with the insurer’s procedures, applicable statute and this regulation.” Another part of the regulation permits copies of certificates to be provided “electronically.”
How can an insurance company fulfill the above obligation without requiring the submission to it of copies of the insurance certificates issued by its “producers”, i.e., agencies and agents? I would be interested to know what, if anything, insurance companies licensed in Georgia have done in response to the above regulation. If any of my readers could send me a copy of any such written instructions they have received, I would appreciate it.