Insurance Certificates – Latest Developments

In a post in early December last year, I discussed a website portal created by the Georgia Insurance Commissioner’s Office that contained basic information about insurance certificates and examples of actions that would violate the new law on insurance certificates and the regulation subsequently issued by the Commissioner’s Office, as well as an e-mail link to report suspected violations of that law and regulation.  In that post and an article in the Spring 2014 issue of the Dec Page Quarterly magazine, I expressed surprise at one of the examples of illegal conduct contained on the website portal.  The Insurance Commissioner declared it to be illegal to include in the Description of Operations section of the ACORD 25 certificate “any information other than a brief explanation of the operations of the insured; this section is not to be used for describing the insurance policy.”   This statement was reinforced by the declaration that it was illegal to request that a summary of any provision of the insurance policy in question be included in the insurance certificate, if that summary varied in any way “from the precise and complete language of the provision” in question.

The above statements were contrary to the common practice of using the Description of Operations section to provide information about the insurance policies referred to in the certificate.  In addition, limiting the information that could be provided in that section to “a brief explanation of the operations of the insured” was contrary to the wording found on the ACORD 25 form for that section which includes references to the locations and vehicles covered by those policies.  The instructions issued by ACORD for this form also state that this box can be used for “additional comments or special conditions that may exist upon the policy” in question.

It is my understanding that IIAG representatives have been in touch with the Insurance Commissioner’s Office about the above inconsistency and that some changes will be made by that Office to the above examples of prohibited practices.  When those changes will be made and their exact nature are unknown at this time, so stay tuned for further developments.  In the meantime, I have advised my clients that it is permissible to use the Description of Operations section to describe the locations and vehicles covered by the insurance policies in question and to refer to any endorsements or other additions to those policies that may affect their coverage, copies of which documents should be attached to the certificate.  At this time, I would advise against including in that section any description of the effect of the documents that are attached to the certificate.