The Independent Insurance Agents & Brokers of America said it has adopted a policy on certificates of insurance that preserves the integrity of the forms while meeting the growing number of policyholder requests.
"The critical role that certificates of insurance play in many business transactions underscores the importance of this issue," said Bob Fulwider, chairman of the Alexandria, Va.-based association.
"The increasing complexity of transactions, volume of certificates requested and speed required for their issuance all contribute to the need for the industry to meet the growing demand more efficiently," said Mr. Fulwider.
"The [IIABA] is taking a leadership role on this issue because it affects the agency operations of our members each day," said Bob Rusbuldt, president and chief executive officer of the association. "We want to work with our carrier partners and other industry participants to enhance the certificates process while protecting the integrity of the policies sold."
The new policy addresses four main areas of concern:
o Form selection for certificates–the industry should only support the use of certificates that are approved by carriers for the policies they issue and that comply with applicable contractual, legal and regulatory requirements. Certificate forms should be reviewed and updated regularly to remain responsive to changing business needs.
o Certificates form content–the industry needs to implement business practices that support enforcement of the laws and regulations prohibiting modification of certificates or underlying insurance coverages except in cases permitted by law and approved by the carrier issuing the policy. The industry should also support the use of uniform language on any forms used to respond to policyholders' needs about insurance coverages in place so that policy requirements for notification of cancellation, nonrenewal and/or material change in risk are not altered. Carriers should be responsive to requests for customized certificates as needed.
o Preparation, maintenance and notices–the industry must support the development of automated online tools to provide appropriate parties with timely and accurate policy information. This could be done with technology in real time, enhancing responsiveness to policyholders' needs while concurrently providing safeguards against the use of certificate forms that have been withdrawn, replaced or improperly altered.
o Misrepresentation or fraud–all laws and regulations prohibiting misrepresentation and/or fraud in connection with the preparation, dissemination and/or use of certificates or other information concerning insurance policies need to be enforced. The policy recommends that information about the importance of accuracy of representations relative to insurance policies be made available to industry participants and those seeking certificates.
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