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Regular Session, 2010
HOUSE BILL NO. 447
BY REPRESENTATIVE PEARSON
INSURANCE/POLICIES: Provides relative to certificates of insurance
AN ACT1
To amend and reenact R.S. 22:881.1, relative to certificates of insurance; to define such2
certificates and otherwise provide with respect to their issuance and effect; to3
provide for the responsibilities of the commissioner of insurance relative to such4
certificates, including approval of forms and enforcement; to provide for prohibitions5
and penalties; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:881.1 is hereby amended and reenacted to read as follows: 8
ยง881.1. Certificates of insurance9
A. For the purposes of this Section:10
(1) "Certificate of insurance", as used by property and casualty insurers, shall11
mean any document issued by or on behalf of an insurer to a third party who has not12
contracted with the insurer to purchase an insurance policy and is provided for13
informational purposes only to advise a third party of the existence and limits of14
insurance coverage issued to the named insured.15
(1) "Certificate" or "certificate of insurance" means any document,16
instrument, or record, including an electronic record, no matter how titled or17
described, which is prepared by an insurer or insurance producer and issued for the18
benefit of a third person not a party to the subject insurance contract, as evidence of19 HLS 10RS-979 ENGROSSED
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property and casualty insurance coverage. "Certificate" or "certificate of insurance"1
shall not mean an insurance binder.2
(2) "Certificate holder" means any person, other than a policyholder, that is3
designated on a certificate of insurance as a "certificate holder" or any person, other4
than a policyholder, for whose benefit a certificate of insurance has been prepared5
by an insurer or insurance producer at the request of the policyholder.6
(3) "Electronic record" shall have the meaning defined in R.S. 9:2602(7). 7
(4) "Insurance" shall have the meaning defined in R.S. 22:46(9).8
(2) (5) "Insurance producer" shall have the same definition as set forth in9
R.S. 22:1542.10
(6) "Insurer" means an insurer as defined in R.S. 22:46(10) and any other11
person engaged in the business of making property and casualty insurance contracts,12
including but not limited to self-insurers, syndicates, risk purchasing groups, and13
similar risk transfer entities. "Insurer" shall not mean any person self-insured for14
purposes of workers' compensation, including any group self-insurance fund15
authorized pursuant to R.S. 23:1195 et seq., any interlocal risk management agency16
authorized pursuant to R.S. 33:1341 et seq., or any self-insured employer authorized17
pursuant to R.S. 23:1168 et seq.18
(7) "Person" means any individual, company, insurer, organization,19
reciprocal or inter-insurance exchange, business, partnership, corporation, limited20
liability company, association, trust, or other legal entity, including any government21
or governmental subdivision or agency.22
(8) "Policyholder" means a person who has contracted with a property or23
casualty insurer for insurance coverage.24
(9) "Record" shall have the meaning defined in R.S. 9:2602(13).25
(10) "Self-insurer" means any individual business or group of businesses26
which have created a risk purchasing group, risk retention plan, syndicate, or other27
form of self-insurance covering property or casualty risk exposures. "Self-insurer"28
shall not mean any person self-insured for purposes of workers' compensation,29 HLS 10RS-979 ENGROSSED
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including any group self-insurance fund authorized pursuant to R.S. 23:1195 et seq.,1
any interlocal risk management agency authorized pursuant to R.S. 33:1341 et seq.,2
or any self-insured employer authorized pursuant to R.S. 23:1168 et seq.3
B. No property or casualty insurer or insurance producer may issue a4
certificate of insurance or any other type of document purporting to be a certificate5
of insurance that will affirmatively or negatively alter, amend, or extend the6
coverage provided by the referenced insurance policy. A certificate of insurance7
shall also not convey any contractual rights to the certificate holder.8
C. Any insurer or insurance producer acting on behalf of the insurer issuing9
a certificate of insurance shall be authorized to use only the standard ACORD or ISO10
Form "Certificate of Insurance" or other form filed with and approved by the11
commissioner of insurance. No person, wherever located, may prepare, issue, or12
request the issuance of a certificate of insurance for risks located in this state unless13
the form has been filed with and approved by the commissioner of insurance. No14
person, wherever located, may alter or modify an approved certificate of insurance15
form unless the alteration or modification has been approved by the commissioner16
of insurance.17
D. The commissioner of insurance shall disapprove a form filed under this18
Section or withdraw approval of a form if the form that:19
(1) Is unfair, misleading, or deceptive, or violates public policy.20
(2) Violates any state statute or regulation validly promulgated by the21
commissioner of insurance.22
(3) Requires certification of insurance coverages that are not available.23
E. The commissioner of insurance shall approve certificate of insurance24
forms filed under this Section that are provided to a person who has an insurable25
interest in the property insured by the policy, whether or not it contains wording that26
it is for information only or similar language, but otherwise complies with this27
Section. Further, such a form shall not be considered a violation of Subsection D of28 HLS 10RS-979 ENGROSSED
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this Section, and a lender may require use of an approved form that meets its lending1
requirements.2
F.(1) The commissioner of insurance shall approve or disapprove certificate3
of insurance forms filed pursuant to this Section in writing within forty-five days of4
receipt of the form.5
(2) Standard certificate of insurance forms promulgated by the Association6
for Cooperative Operations Research and Development (ACORD), the American7
Association of Insurance Services (AAIS), or the Insurance Services Office (ISO)8
shall be filed, but are deemed approved by the commissioner of insurance, provided9
these forms comply with the provisions of this Section.10
G. No person shall demand or request the issuance of a certificate of11
insurance from an insurer, insurance producer, or policyholder that contains any false12
or misleading information concerning the policy of insurance to which the certificate13
makes reference.14
H. No person may prepare, issue, or request, either in addition to or in lieu15
of a certificate of insurance, an opinion letter or other document or correspondence,16
instrument, or record, including an electronic record, that is inconsistent with this17
Section; however, an insurer or insurance producer may prepare or issue an18
addendum that clarifies, explains, summarizes, or provides a statement of the19
coverages provided by a policy of insurance and otherwise complies with the20
requirements of this Section.21
I. The provisions of this Section shall apply to all certificate holders,22
policyholders, insurers, insurance producers, and certificate of insurance forms23
issued as a statement or evidence of insurance coverages on property, operations, or24
risks located in this state, regardless of where the certificate holder, policyholder,25
insurer, or insurance producer is located.26
J. A certificate of insurance is not a policy of insurance and does not27
affirmatively or negatively amend, extend, or alter the coverage afforded by the28
policy to which the certificate of insurance makes reference. A certificate of29 HLS 10RS-979 ENGROSSED
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insurance shall not confer to a certificate holder new or additional rights beyond1
what the referenced policy or any validly executed endorsements of insurance2
provides.3
K. No certificate of insurance shall contain references to legal or insurance4
requirements contained in any contracts other than the underlying contracts of5
insurance, including construction or service contracts.6
L. A person shall only have a legal right to notice of cancellation,7
nonrenewal, or any material change, or any similar notice concerning a policy of8
insurance if the person is named within the policy or any endorsement and the policy9
or endorsement, law, or regulation of this state requires notice to be provided. The10
terms and conditions of the notice, including the required timing of the notice, are11
governed by the policy of insurance in accordance with the laws and regulations of12
this state and cannot be altered by a certificate of insurance.13
M. Any certificate of insurance and any attached addendum prepared, issued,14
or requested in violation of this Section shall be null and void and of no force and15
effect.16
N. Any person who wilfully violates this Section may be fined not more than17
one thousand dollars per violation.18
O. The commissioner of insurance shall have the power to examine and19
investigate any complaint or allegation of specific violations by any person who has20
allegedly engaged in an act or practice prohibited by this Section and to enforce the21
provisions of this Section.22
D.P. Pursuant to the Administrative Procedure Act, the commissioner of23
insurance may adopt reasonable rules and regulations as are necessary or proper to24
carry out the purposes of this Section. 25
Section 2. The provisions of this Act amending Subsections A and C of this Section26
and the provisions of this Act enacting Subsections D and E of this Section shall become27
effective on August 15, 2010.28 HLS 10RS-979 ENGROSSED
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Section 3. Except as otherwise provided in Section 2 of this Act, the provisions of1
this Act shall become effective on January 1, 2011.2
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HB No. 447
Abstract: Provides relative to certificates of insurance, including their issuance and effect;
provides for the responsibilities of the commissioner of insurance relative to such
certificates, including approval of forms and enforcement; and provides for
prohibitions and penalties.
Proposed law provides relative to certificates of insurance as follows:
(1)Present law defines a certificate of insurance, as used by property and casualty
insurers, as a document issued on or behalf of an insurer to a third party who has not
contracted with the insurer to purchase an insurance policy, and is provided for
informational purposes only to advise a third party of the existence and limits of
insurance coverage issued to the named insured.
Proposed law instead defines a certificate of insurance as any document, instrument,
or record, including an electronic record, which is prepared or issued by an insurer
or insurance producer as evidence of property and casualty insurance coverage, for
the benefit of a third party who has not contracted with the insurer to purchase an
insurance policy. Specifically excludes an insurance binder from such definition.
(2)Retains definition of "insurance producer" from present law and additionally
provides for definitions of "certificate holder", "electronic record", "insurance",
"insurer", "person", "policyholder", "record", and "self-insurer". Excludes certain
type of self-insurer from the definition of "insurer" and "self-insurer".
(3)Present law prohibits any property or casualty insurer or insurance producer from
issuing a certificate of insurance or any other type of document purporting to be a
certificate of insurance that will affirmatively or negatively alter, amend, or extend
the coverage provided by the referenced insurance policy. Also specifies that a
certificate of insurance shall not convey any contractual rights to the certificate
holder.
Proposed law retains present law.
(4)Present law provides that any insurer or insurance producer acting on behalf of the
insurer issuing a certificate of insurance shall be authorized to use only the standard
ACORD or ISO Form "Certificate of Insurance" or other form filed with and
approved by the commissioner of insurance.
Proposed law instead prohibits any person from preparing, issuing, or requesting the
issuance of a certificate of insurance for risks located in this state unless the form has
been filed with and approved by the commissioner of insurance. Also prohibits
alteration or modification of an approved certificate of insurance form unless the
alteration or modification has been approved by the commissioner of insurance.
Requires the commissioner to approve or disapprove certificates of insurance filed
pursuant to proposed law in writing within 45 days of receipt of the form; however, HLS 10RS-979 ENGROSSED
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provides that standard certificate of insurance forms promulgated by the Association
for Cooperative Operations Research and Development (ACORD), the American
Association of Insurance Services (AAIS), or the Insurance Services Office (ISO)
shall be filed, but are deemed approved by the commissioner of insurance, provided
these forms comply with proposed law.
Additionally requires the commissioner to disapprove a form filed or withdraw
approval of a form that:
(a)Is unfair, misleading, or deceptive, or violates public policy.
(b)Violates any law, including any present law or regulation promulgated by the
commissioner of insurance.
(c)Requires certification of insurance coverages that are not available.
(5)Requires the commissioner of insurance to approve filed certificate of insurance
forms that are provided to a person who has an insurable interest in the property
insured by the policy, whether or not it contains wording that it is for information
only or similar language, but otherwise complies with proposed law. Further
provides that such a form shall not be considered a violation of (4) above and a
lender may require use of an approved form that meets its lending requirements.
(6)Prohibits any person from demanding or requesting the issuance of a certificate of
insurance from an insurer, insurance producer, or policyholder that contains any false
or misleading information concerning the policy of insurance to which the certificate
makes reference. Further prohibits any person from preparing, issuing, or
requesting, either in addition to or in lieu of a certificate of insurance, an opinion
letter or other document or correspondence, instrument, or record, including an
electronic record, that is inconsistent with proposed law; however, allows an insurer
or insurance producer to prepare or issue an addendum to a certificate that clarifies,
explains, summarizes, or provides a statement of the coverages provided by a policy
of insurance and otherwise complies with the requirements of proposed law.
(7)Provides that proposed law shall apply to all certificate holders, policyholders,
insurers, insurance producers, and certificate of insurance forms issued as a
statement or evidence of insurance coverages on property, operations, or risks
located in this state, regardless of where any such entity is located.
(8)Provides that a certificate of insurance 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. Specifies that a
certificate of insurance shall not confer to a certificate holder new or additional rights
beyond what the referenced policy or any endorsements of insurance provides.
(9)Provides that no certificate of insurance shall contain references to legal or insurance
requirements contained in any contracts other than the underlying contracts of
insurance, including construction or service contracts.
(10)Provides that a person shall only have a legal right to notice of cancellation,
nonrenewal, or any material change, or any similar notice concerning a policy of
insurance if the person is named within the policy or any endorsement and the policy
or endorsement, law, or regulation of this state requires notice to be provided.
Specifies that the terms and conditions of the notice, including the required timing
of the notice, are governed by the policy of insurance in accordance with the laws
and regulations of this state and cannot be altered by a certificate of insurance. HLS 10RS-979 ENGROSSED
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(11)Provides that any certificate of insurance and any attached addendum prepared,
issued, or requested in violation of proposed law shall be null and void and of no
force and effect.
(12)Authorizes a fine of not more than $1,000 per violation on any certificate holder,
policyholder, insurer, or insurance producer who wilfully violates proposed law.
(13)Authorizes the commissioner to examine and investigate any complaint or allegation
of specific violations by any person who has allegedly engaged in an act or practice
prohibited by proposed law. Further authorizes the commissioner to enforce the
provisions of proposed law.
(14)Present law authorizes the commissioner, pursuant to the Administrative Procedure
Act, to adopt reasonable and necessary rules to carry out the purposes of proposed
law.
Proposed law retains present law.
(15)Proposed law provides that its provisions relative to definitions and to filing and
approval of certificates of insurance become effective on Aug. 15, 2010; makes all
other provisions of proposed law effective Jan. 1, 2011.
(Amends R.S. 22:881.1)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original
bill.
1. Changed the definitions of "certificate of insurance" and "certificate holder".
2. Changed the definitions of "insurer" and "self-insurer" to exclude certain types
of self-insurers.
3. Added requirement that the commissioner approve or disapprove certificate of
insurance forms within 45 days of receipt; also provided that certain standard
types of forms of certificates of insurance be filed with the commissioner but are
deemed approved if they comply with proposed law.
4. Added requirement relative to the commissioner approving filed certificate of
insurance forms that are provided to a person who has an insurable interest in the
property insured by the policy. Also authorized a lender to require use of an
approved form that meets its lending requirements.
5. Deleted requirement that the following statutory language be stated on each
certificate: "This certificate of insurance is issued as a matter of information only
and confers no rights upon the certificate holder. This certificate does not
amend, extend, or alter the coverage afforded by the policies referenced herein."
6. Deleted prohibition against any person knowingly preparing a certificate of
insurance that contains any false or misleading information or that purports to
affirmatively or negatively alter, amend, or extend the coverage provided by the
policy of insurance to which the certificate makes reference.
7. Deleted authorization for a policyholder to prepare or issue an addendum to a
certificate. HLS 10RS-979 ENGROSSED
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8. Deleted provision that the insurance afforded by the referenced policy of
insurance is subject to all the terms, exclusions, and conditions of the policy
itself.
9. Deleted provision that any certificate of insurance and any attached addendum
prepared, issued, or requested in violation of proposed law shall not be
discoverable or admissible as evidence in any private civil action or
administrative proceeding.
10.Authorized rather than imposes penalty for violation of proposed law and
requires that such violation be willful.
11.Limited the authority of the commissioner to examine and investigate to upon
any complaint or allegation of specific violations and deletes his authority to
impose any authorized penalty or remedy against any person who violates
proposed law.
12.Made certain provisions of proposed law effective Aug. 15, 2010, and all other
provisions effective Jan. 1, 2011.