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Tuesday, 31 May 2011 17:49

Certificates of Insurance Bill Passes Legislature, Heads to Governor in Texas

The Texas Legislature May 31 passed a measure that requires regulation and approval of property and casualty certificate of insurance forms provided to insureds as proof of coverage.

Insurance agents traditionally have been asked to provide the certificates to insureds and interested parties. As a result agents are often brought into disputes over policy terms and coverages because of language contained in the certificates.

Under Senate Bill 425 only approved certificate of insurance forms may be issued to an insured. It prohibits a property/casualty insurer and agents issuing certificates of insurance or other documents intended to be used as proof of coverage “if the certificate or document alters, amends, or extends the coverage or terms and conditions provided by the insurance policy referenced on the certificate or document.”

Penalties may be determined by the Texas Department of Insurance for noncompliance, and TDI may collect a fee of up $100 for the filing of a new or amended certificate of insurance form.

The legislation was backed by agents’ groups, including the Independent Insurance Agents of Texas.

Other states, including Georgia, have been working on similar bills to regulate insurance certificates within their respective states this year as well.

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