2013 -- H 5607

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LC01163

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE -- CERTIFICATES OF INSURANCE MODEL ACT

     Introduced By: Representatives Kennedy, Keable, and Marshall

     Date Introduced: February 27, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

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by adding thereto the following chapter:

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     CHAPTER 77

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CERTIFICATES OF INSURANCE MODEL ACT

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     27-77-1. Short title. -- This chapter shall be known and may be cited as the "Certificates

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of Insurance Model Act."

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     27-77-2. Definitions. -- For purposes of this chapter:

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     (1) "Certificate of insurance" means a document or instrument, regardless of how titled or

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described, that is prepared or issued by an insurer or insurance producer as evidence of property

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or casualty insurance coverage. The term does not include a policy of insurance, insurance binder,

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policy endorsement, or automobile insurance identification or information card.

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     (2) "Insurance producer" means a person required to be licensed under the laws of this

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state to sell, solicit, or negotiate property or casualty insurance.

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     (3) "Insurer" means any organization that issues property or casualty insurance.

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     (4) "Person" means any individual, partnership, corporation, association, or other legal

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entity, including any government or governmental subdivision or agency.

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     27-77-3. Certificate forms. -- (a) A person may not prepare, issue, or request or require

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the issuance of a certificate of insurance on property, operations, or risks located in this state

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unless the certificate of insurance form has been filed with the commissioner by or on behalf of

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an insurer.

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     (b) The commissioner of insurance shall prohibit the use of a certificate of insurance form

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if the form:

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     (1) Is unfair, misleading, or deceptive, or violates public policy; or

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     (2) Violates any law, including any regulation promulgated by the commissioner of

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insurance.

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     (c) The current edition of standard certificate of insurance forms promulgated and filed

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with the commissioner by the Association for Cooperative Operations Research and Development

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(ACORD), the American Association of Insurance Services (AAIS), the Insurance Services

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Office (ISO) are not required to be filed by individual insurers. Additionally, certificate of

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insurance forms whose specific content and wording are established by Federal law or regulation,

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or any law or regulation of this state, are not required to be filed by individual insurers.

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     (d) A certificate of insurance is not a policy of insurance and does not affirmatively or

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negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of

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insurance makes reference. A certificate of insurance shall not confer to any person new or

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additional rights beyond what the referenced policy of insurance expressly provides.

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     27-77-4. Limitations on use. -- (a) A person may not:

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     (1) Alter or modify a certificate of insurance form filed with the commissioner;

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     (2) Prepare, issue, or request or require the issuance of a certificate of insurance that

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contains any false or misleading information concerning the policy of insurance to which the

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certificate of insurance makes reference; or

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     (3) Prepare, issue, or request or require the issuance of a certificate of insurance that

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purports to affirmatively or negatively alter, amend, or extend the coverage provided by the

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policy of insurance to which the certificate of insurance makes reference.

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     (b) A certificate of insurance may not warrant that the policy of insurance referenced in

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the certificate comply with the insurance or indemnification requirements of a contract and the

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inclusion of a contract number or description within a certificate of insurance may not be

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interpreted as doing such.

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     27-77-5. Notice requirements. -- A person is entitled to notice of cancellation,

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nonrenewal, or any material change, and to any similar notice concerning a policy of insurance

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only if the person has such notice rights under the terms of the policy of insurance or any

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endorsement to the policy. The terms and conditions of the notice are governed by the policy of

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insurance or endorsement and may not be altered by a certificate of insurance.

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     27-77-6. Applicability. -- (a) The provisions of this chapter shall apply to all certificates

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of insurance issued in connection with property, operations, or risks located in this state,

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regardless of where the policyholder, insurer, insurance producer, or person requesting or

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requiring the issuance of a certificate of insurance is located.

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     (b) A certificate of insurance or any other document or correspondence prepared, issued,

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requested, or required in violation of this chapter shall be null and void.

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     27-77-7. Enforcement and penalties. -- (a) The commissioner of insurance shall have

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the power to examine and investigate the activities of any person that the commissioner

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reasonably believes has been or is engaged in an act or practice prohibited by this chapter.

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     (b) The commissioner of insurance shall have the power to enforce the provisions of this

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chapter, including the authority to issue orders to cease and desist and to levy a civil penalty not

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exceeding one thousand dollars ($1,000) per violation against any person who violates this

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chapter.

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     (c) The commissioner of insurance may adopt reasonable rules and regulations as are

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necessary or proper to carry out the provisions of this chapter.

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     SECTION 2. This act shall take effect ninety (90) days after passage.

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LC01163

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- CERTIFICATES OF INSURANCE MODEL ACT

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     This act would enact the Certificates of Insurance Model Act.

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     This act would take effect ninety (90) days after passage.

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LC01163

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