OGC Op. No. 08-05-13
The Office of General Counsel issued the following opinion on May 30, 2008, representing the position of the New York State Insurance Department.
RE: Certificates of Insurance
May a certificate of insurance provide obligations, conditions, or coverages not set forth within the underlying insurance policy?
No. A certificate of insurance may not confer new or additional rights beyond those specified in the insurance policy.
It is reported that the company, a licensed producer, issues certificates of insurance upon request. Two New York City agencies, the Department of Consumer Affairs and the Department of Transportation, demand that the certificates of insurance require 30 days notice for the insurer to cancel a commercial risk insurance policy pursuant to N.Y. Ins. Law § 3426(c) (McKinney 2007). The issue is whether the New York Insurance Law requires such a provision.
Insurance Law § 3426(c) is germane to the inquiry. That statute provides that “after a covered policy has been in effect for sixty days…or on or after the effective date if such policy is a renewal, no notice of cancellation shall become effective until fifteen days after written notice is mailed or delivered to the first-named insured and to such insured’s authorized agent or broker.”
The policy endorsement at issue here requires that written notice be mailed at least 15 days before the effective date of cancellation. Thus, the endorsement is consistent with the requirements of Insurance Law § 3426(c).
A certificate of insurance is often used as proof that a policy of insurance is in effect. It is a document used in business to summarize the essential terms, conditions, and duration of the contract of insurance that is in effect between the insured and the insurer. The certificate of insurance is not, however, the insurance contract itself, and there is no requirement in statute or regulation that it be filed with the Insurance Department. Nevertheless, the certificate of insurance must contain information consistent with the terms of the insurance policy in question; it cannot confer on a certificate holder new or additional rights beyond that which the insurance policy provides. Thus, if any provision in the certificate of insurance imposes an obligation or liability upon an insurer not required by the policy, such difference would alter, expand, or modify the rights between an insured and the insurer, and would constitute a policy form that must be filed with the Superintendent pursuant to Insurance Law § 2307(b). See, e.g., Office of General Counsel Opinion No. 06-05-02 (May 9, 2006); Opinion No. 06-11-16 (Nov. 17, 2006); Opinion No. 07-05-09 (May 17, 2007).
Thus, to the extent that the certificate of insurance here appears to obligate the insurer to provide additional days of notice not required by the policy, the certificate is inconsistent with the filed policy.
Finally, I note in closing that a producer violates the Insurance Law if the producer amends, expands, or alters the terms of a policy without authorization from the insurer and, where required, approval from this Department. As stated in the Department's Circular Letter No. 15 (1997), the Department may pursue disciplinary measures against any producer who acts in this manner. Consequently, it is prudent to review the entire policy to ensure that the certificate of insurance prepared by the producer actually reflects the terms of the policy.
For further information you may contact Associate Attorney Jeffrey A. Stonehill, at the New York City Office.