Georgia Passes Bill Regulating Insurance Certificates

Georgia Gov. Nathan Deal is expected to sign into law a bill requiring that certificate of insurance forms be filed with and approved by the state insurance commissioner.

Agent groups and insurance companies have had longstanding problems with certificates that are often used to falsely show proof of coverage or amend the coverage to include provisions outside the terms of the certificate holders’ policy.

In January, Insurance Commissioner Ralph Hudgens issued a directive restating that certificates are for information purposes only and confer no rights on the certificate holders outside the terms of their policies. The directive also reminded agents and policyholders that the intentional misuse of certificate is against the law.

Following Hudgens’ action, the Independent Insurance Agents of Georgia and Professional Agents of Georgia created a joint task force to help turn the directive into legislation. “This legislation is very important to our members,” said Gould Hagle, lobbyist for the Independent Insurance Agents of Georgia. “Its passage is the culmination of a full year’s work.”

The bill (HB66) was sponsored by Rep. Maxwell Howard and approved by both the Georgia House of Representatives and Senate, before being sent to Gov. Deal for his signature.

The bill clarifies that a certificate is a synopsis of coverage as it exists on the date the certificate is issued and is only intended for informational purposes. The bill also spells out that a certificate is not an insurance contract or a document that alters coverage.

If signed as expected by Deal, the bill would make two substantive changes to current law. In addition to requiring that certificate forms to be filed with and approved by the insurance commissioner, the new law places certificate holders under the regulatory authority of the commissioner so that any violations would be covered under the state’s insurance code.