Insurance policy renewal in an affiliate and the use and contents of certificates of insurance

Under the bill, an insurer is not required to comply with those renewal requirements if the insurer renews a property or casualty insurance policy in an affiliate and certain other requirements are satisfied, including that the affiliate is authorized to write the type of policy being renewed, that all of the stock of, interest in, or control of the affiliate is held by one or more persons in the same insurance holding company system that includes the insurer, and that the insurer, at least 60 days before the renewal date, sends the policyholder notice of the renewal in the affiliate. The notice must provide the affiliate's name, contact information, and A.M.

Best or similar rating if lower than the insurer's rating and must specify that there will be no interruption of coverage, that, except for the rates, the terms and conditions will be substantially the same as the current policy's terms and conditions, and that the premiums will be determined according to the affiliate's rating plan.

The bill specifies that a certificate of insurance or other document used for evidence of insurance (certificate of insurance) is subject to certain restrictions with regard to its use and the information it contains. Under current law, an insurer, the insurer's agent or employee, and other certain specified persons are prohibited from providing any false or misleading information relating to an insurance contract.

Current law prohibits an insurance intermediary, such as a person who negotiates for insurance on behalf of an insurer, from providing a misleading certificate of insurance. Current law also provides that a person who prepares, makes, or subscribes to a false or fraudulent document, such as a certificate of insurance, knowing that the document may be presented or used in support of an insurance claim is guilty of a Class A misdemeanor if the value of the claim does not exceed $2,500 and a Class I felony if the value of the claim exceeds $2,500.

The bill specifies that a certificate of insurance may not warrant that the certificate fulfills an insurance or indemnity requirement in a specific contract.

Under the bill, no person may issue or require a certificate of insurance that contains false, misleading, deceptive, or unfairly discriminatory information or that otherwise violates public policy or law. Similarly, no person may prepare, issue, request, or require a certificate of insurance that purports to alter, amend, or extend insurance coverage.