OGC Op. No. 06-05-02
The Office of General Counsel issued the following opinion on May 9, 2006, representing the position of the New York State Insurance Department.
Re: Certificates of Insurance
Question Presented
May a certificate of insurance provide obligations, conditions, or coverages not contained within the underlying insurance policy?
Conclusion
No. See "Analysis" below.
Facts
The inquirer's agency has a substantial construction business clientele who request certificates of insurance naming the Department of Transportation ("DOT") as an additional insured and which in other ways modify the insurance policies in issue. The inquirer states that these clauses are required by DOT.
Analysis
A certificate of insurance is often used as proof that a policy of insurance is in effect. It is merely 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 a contract and is not required by statute or regulation and it need not be filed with the Department. However, the certificate of insurance must contain information consistent with the terms of the particular insurance policy. It is not intended to confer on a certificate holder new or additional rights beyond what the insurance policy provides. Thus, if any provision in the certificate of insurance is not contained in the policy and it imposes an obligation or liability not presently existing upon an insurer, 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 N.Y. Ins. Law § 2307(b) (McKinney Supp. 2006).
N. Y. Ins. Law § 2307(b) provides in relevant part:
Except as otherwise provided herein, no policy form shall be delivered or issued for delivery unless it has been filed with the superintendent and either he has approved it, or thirty days have elapsed and he has not disapproved it as misleading or violative of public policy.
To the extent that the certificate of insurance appears to obligate the insurer or the inquirer's agency to provide notice to additional insureds not required by the policy, the use of such certificates would be misleading. Accordingly, if the policies in issue do not contain such a notice requirement, then the certificate should not include such a requirement.
A producer is in violation of the Insurance Law if it amends, expands, or alters the terms of the policy without authorization from the insurer and, where required, approval from this Department. As stated in Circular Letter No. 15 (1997), the Department may seek disciplinary measures against producers who act in this manner. It is always prudent to review the entire policy in order to ensure that the certificate of insurance prepared by the producer actually reflects the terms of the policy.
One may view the relevant Circular Letters No. 8 (1995) and No. 15 (1997) as well as the Department's Office of General Counsel opinions at our website, http://www.ins.state.ny.us/circindx.htm.
For further information one may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.