Guidance Concerning the Usage of Certificates of Insurance

The State of New Hampshire Insurance Department 21 South Fruit Street, Suite 14 Concord, NH 03301 Roger A. Sevigny Commissioner Alexander K. Feldvebel Deputy Commissioner BULLETIN Docket No.: INS No. 09-048-AB To: All Property and Casualty Insurers From: Roger Sevigny Date: July 29, 2009 Subject: Guidance Concerning the Usage of Certificates of Insurance NH law (RSA 417-C:2) requires at least ten (10) days notice of cancellation to the insured in the event of non-payment of premium or of a substantial increase in hazard. Insurers may increase this notice period at their discretion, but are not required to do so. It has come to the attention of the New Hampshire Insurance Department that some insurance producers are being asked to issue Certificates of Insurance or other evidence of insurance coverage that do not reflect the insurer’s ten (10) day cancellation standard. Specifically, the Department has received reports that the issuers of Certificates of Insurance are being asked to include a minimum thirty (30) day cancellation notice as part of the Certificate even though the insurer’s standard provides a ten (10) day notice and the insurer has not authorized this change to their normal business practice. In at least some of the cases where this thirty (30) day notice was not provided, the insured is not being allowed to work on certain contracts, projects or job sites. Certificates of Insurance are used to serve as proof of insurance and to summarize the terms, conditions and coverage included in the insurance policy, in lieu of providing a full copy of the policy. Certificates of Insurance issued as a summary or evidence of coverage must clearly state and accurately reflect the terms of the insurance policy and coverage provided. Issuing a Certificate of Insurance or other evidence of insurance coverage that misrepresents the policy terms, conditions or coverage is a violation of producer licensing laws and may subject the producer to license revocation. A producer issuing a Certificate of Insurance or other evidence of insurance coverage that provides 2 for a longer notice period than the insurer provides (for example, an increase of the minimum ten (10) day notice to thirty (30) days) without authority from the insurance company may also be subjecting his or her agency to an E&O exposure. Each Certificate of Insurance or other evidence of insurance coverage shall include the following statement or one substantively similar: “This certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies referenced herein.” For further questions or information on Certificates of Insurance, please contact Deborah Stone at the New Hampshire Insurance Department at 1-603-271-2261 or visit the Department’s website at www.nh.gov/insurance.