As of December 14th, 2015 the New York State Department of Financial Services has informed us that insurance producers (Agents & Brokers) may not list individual additional insureds on a certificate of insurance when the policy provides automatic or blanket additional insured coverage. The department of finance New York also stated that anybody requiring a certificate of that nature would be violating the law.
The Independent Insurance Agents & Brokers of New York (the IIABNY) has asked the DFS to clarify their meaning of the certificates of insurance law that took effect last summer. Several IIABNY members have asked if the new law allows them to list additional insureds when the policy does not mention those entities specifically by name. Lots of certificate holders ask to have additional insureds listed on certificates.
This is Section 502 of the new law, which the IIABNY has found to be open to interpretation:
“(b) No person or governmental entity shall wilfully require the inclusion of terms, conditions or language of any kind, including warranties or guarantees, that the insurance policy provides coverage or otherwise sets forth terms and conditions in a certificate of insurance, if the insurance policy referenced by such certificate of insurance does not expressly include such terms, conditions, or language…. [Emphasis added]
(c) A certificate of insurance shall not amend, extend, or alter the coverage provided by the insurance policy to which the certificate of insurance makes reference. A certificate of insurance shall further not confer to any person any rights beyond those expressly provided by the policy of insurance referenced therein.”
According to the IIABNY, the word “expressly” in provision (b) may be the one open to the most interpretation. Via an email sent to the IIABNY on December 10th by DFS attorney:
“An insurance agent may not issue a certificate of insurance that lists the names of specific additional insureds when the policy referenced provides automatic coverage for additional insureds through a blanket or automatic additional insured endorsement. In addition, an entity may not require the insurance agent to list the names of specific additional insureds on the certificate of insurance in such a situation.”
Metropolitan Risk Advisory and the IIABNY suggest one of two responses when a member receives requests like this:
- Inform anyone making the request that New York law forbids issuing the certificate as requested. Provide a copy of the relevant policy provision or endorsement.
- Ask the insurer to endorse the policy by adding additional insureds individually by name.
Seems like this will be rife with future problems as the folks who issue permits like square peg and square hole. They don’t want to be forced to think. If it’s not exactly as they want it they will reject the permit which will force the Agent /Brokers to request specific endorsements which will continue to drive up costs unnecessarily for everyone. Seem like the only thing Albany can get right is graft. They score very well as it relates to indictments and convictions.
For more information on this matter, contact a Risk Advisor today via the link provided or by calling (914)-357-8444.
