Agent Resources

Certificates of Insurance Act FAQs

What does the law do?

The “Certificates of Insurance Act” ensures that businesses are protected and insurance coverages stated in the certificate can be found in the policy and, if not, there will be consequences. The act makes it expressly clear that agents and businesses who violate the law will be subject to penalties, fines and possible actions taken against their insurance licenses, including losing their licenses altogether.

The act ensures that certificates will be used for their intended purpose and helps prevent their misuse in the marketplace. The only parties adversely affected are those who would demand or issue an improper or misleading certificate of insurance that does not accurately depict the underlying insurance coverage.

Isn’t this activity already illegal?

Yes, but it is qualified in many ways. First, the Ohio Department of Insurance (ODI) issued a bulletin* in 2009 stating that it is an unfair and deceptive act for an agent to misrepresent the terms or benefits of an insurance policy. However, ODI has not pursued these types of actions against agents and it refers to a deceptive act instead of using an express reference to certificates in the code.

Second, the illegal activity only applied to the agent, not the business making an unfair demand. So under the bulletin, a business could pressure an agent to provide falsified information on a certificate and that was not an illegal act. The only illegal act that occurred was if the agent would have acquiesced to the client’s unfair request. The new law makes it expressly illegal for both the business and the agent.

Third, there was no section in the Ohio Revised Code that acknowledged or recognized certificates of insurance. Ohio, like over 25 other states, now has a body of law that addresses the use and effect of certificates of insurance.

*This bulletin was rescinded following the enactment of the Certificate of Insurance Act.

Why will this be effective?

We now have an express statute on certificates of insurance. We expect ODI to increase their oversight and regulation of unfair certificate demands and issuance. This new law empowers regulators to more effectively monitor activities surrounding certificates of insurance.

Twenty‐five states have enacted laws similar to Ohio’s “Certificate of Insurance Act.” We have been told by our colleagues in those states that unfair requests for certificates of insurance decreased significantly after the passage of the law and with a proactive education effort by the agent community to the business community.

Unfair requests are only part of the problem. How does this law address all the other issues with certificates of insurance?

This is an important first step in addressing the many issues with certificates of insurance; however, it is not a solution to all the problems that exist. To enact this legislation, OIA had to work with many stakeholders on developing a bill that all parties were comfortable with. In the process, OIA educated members of the Ohio Legislature on certificates of insurance.

If we see there are additional legislative solutions necessary and available to address the certificates problem, we have already established a foundation of knowledge in the Legislature on this complex and insurance‐ specific public policy issue.

When did the law Take effect?

March 23, 2016.

Where do I report questionable activity?

The “Certificates of Insurance Act” provides the ODI with stronger regulatory oversight over certificates of insurance. Questionable activity surrounding certificates of insurance should be reported to ODI’s Division of Fraud and Enforcement at (800) 686‐1527.

How will we know if the law is effective?

It will primarily be anecdotal evidence at first. We will gather feedback from members in small and large group settings, analyze the amount of contacts we receive on certificates of insurance issues, the actions taken by ODI and another member survey at the appropriate time.

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