DFS Opinion: Do Not List Additional Insureds on Certificate When There’s Automatic Coverage
The New York State Department of Financial Services has told IIABNY that insurance producers may not list individual additional insureds on a certificate of insurance when the policy provides automatic or blanket additional insured coverage. The department also said that anyone requiring such a certificate would violate the law.
IIABNY had asked the DFS to clarify the meaning of the certificates of insurance law that took effect last summer. Several IIABNY members have asked whether the law allows them to list additional insureds when the policy does not mention those entities by name. Many certificate holders ask to have additional insureds listed on certificates.
The issue centers on the interpretation of these two provisions in Section 502 of the law:
“(b) No person or governmental entity shall willfully require the inclusion of terms, conditions or language of any kind, including warranties or guarantees, that the insurance policy provides coverage or otherwise sets forth terms and conditions in a certificate of insurance, if the insurance policy referenced by such certificate of insurance does not expressly include such terms, conditions, or language…. [Emphasis added]
(c) A certificate of insurance shall not amend, extend, or alter the coverage provided by the insurance policy to which the certificate of insurance makes reference. A certificate of insurance shall further not confer to any person any rights beyond those expressly provided by the policy of insurance referenced therein.
”The word “expressly” in subsection (b) may have been the key word. According to an email sent to IIABNY on Dec. 10th by a DFS attorney:
“An insurance agent may not issue a certificate of insurance that lists the names of specific additional insureds when the policy referenced provides automatic coverage for additional insureds through a blanket or automatic additional insured endorsement. In addition, an entity may not require the insurance agent to list the names of specific additional insureds on the certificate of insurance in such a situation.
”IIABNY suggests one of two responses when a member receives requests like this.
- Inform the requestor that New York law forbids issuing the certificate as requested. Provide a copy of the relevant policy provision or endorsement.
- Ask the insurer to endorse the policy by adding the additional insureds individually by name.
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