H.F. _____ Section 1. NEW SECTION . 515.115 Certificates of insurance 1 —— penalty. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Certificate of insurance” means a document or 5 instrument, regardless of how the document or instrument is 6 titled or described, that is prepared or issued by an insurer 7 or insurance producer as evidence of property and casualty 8 insurance coverage. “Certificate of insurance” does not include 9 a policy of insurance, insurance binder, policy endorsement, or 10 automobile insurance identification or information card. 11 b. “Insurance producer” means a person required to be 12 licensed pursuant to chapter 522B to sell, solicit, or 13 negotiate property and casualty insurance. 14 c. “Insurer” means a property and casualty insurance company 15 regulated under this chapter. 16 d. “Person” means the same as defined in section 4.1. 17 2. a. The commissioner of insurance shall prohibit the use 18 of a certificate of insurance form if the form is either of the 19 following: 20 (1) Unfair, misleading, or deceptive, or violates public 21 policy. 22 (2) Violates any law, including any rule adopted by the 23 commissioner of insurance pursuant to chapter 17A. 24 b. A certificate of insurance is not a policy of insurance 25 and does not affirmatively or negatively amend, extend, 26 or alter the coverage afforded by the policy to which the 27 certificate of insurance makes reference. A certificate of 28 insurance shall not confer on any person new or additional 29 rights beyond what the referenced policy of insurance expressly 30 provides. 31 3. a. A person shall not do any of the following: 32 (1) Prepare, issue, request, or require the issuance of a 33 certificate of insurance that contains any false or misleading 34 information concerning the policy of insurance to which the 35 -1- LSB 1704YC (3) 87 av/nh 1/ 4

H.F. _____ certificate of insurance makes reference. 1 (2) Prepare, issue, request, or require the issuance of 2 a certificate of insurance that purports to affirmatively or 3 negatively amend, extend, or alter the coverage provided by the 4 policy of insurance to which the certificate of insurance makes 5 reference. 6 b. A certificate of insurance shall not warrant that the 7 policy of insurance referenced in the certificate of insurance 8 complies with the insurance or indemnification requirements 9 of a contract and the inclusion of a contract number or 10 description within a certificate of insurance shall not be 11 interpreted as warranting compliance with such requirements. 12 4. A person is entitled to notice of cancellation, 13 nonrenewal, or material change concerning a policy of insurance 14 or to any similar notice concerning a policy of insurance 15 only if the person has such rights to notice under the terms 16 of the policy of insurance or any endorsement to the policy 17 of insurance. The terms and conditions of a person’s right 18 to notice are governed by the policy of insurance or the 19 endorsement and shall not be altered by a certificate of 20 insurance. 21 5. a. The provisions of this section are applicable to all 22 certificates of insurance issued in connection with property, 23 operations, or risks located in this state, regardless of 24 where the policyholder, insurer, insurance producer, or person 25 requesting or requiring the issuance of a certificate of 26 insurance is located. 27 b. A certificate of insurance or any other document or 28 correspondence prepared, issued, requested, or required in 29 violation of this section is null and void. 30 6. The commissioner of insurance may do all of the 31 following: 32 a. Examine and investigate the activities of any person that 33 the commissioner reasonably believes has been or is engaged in 34 an act or practice prohibited under this section. 35 -2- LSB 1704YC (3) 87 av/nh 2/ 4

H.F. _____ b. Enforce the provisions of this section, including the 1 authority to issue orders to cease and desist, and to impose a 2 penalty in an amount of five hundred dollars per violation to 3 be collected in the name of the state for deposit as provided 4 in section 505.7. 5 c. Adopt rules pursuant to chapter 17A to administer this 6 section. 7 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 8 immediate importance, takes effect upon enactment. 9 Sec. 3. APPLICABILITY. This Act applies to certificates of 10 insurance prepared, issued, requested, or required beginning 11 ninety days after the effective date of this Act. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill relates to certificates of insurance and includes 16 penalties and effective date and applicability provisions. 17 The bill provides that a “certificate of insurance” is a 18 document or instrument, regardless of how it is described, that 19 is prepared or issued by an insurer or insurance producer as 20 evidence of property and casualty insurance. The commissioner 21 of insurance is directed to prohibit the use of a certificate 22 of insurance that is unfair, misleading, or deceptive, or that 23 violates any law or a rule adopted by the commissioner. 24 A certificate of insurance is not a policy of insurance and 25 cannot affirmatively or negatively amend, extend, or alter 26 coverage or confer additional rights to be provided by an 27 insurance policy. 28 The bill prohibits a person from preparing, issuing, 29 requesting, or requiring the issuance of a certificate of 30 insurance that contains false or misleading information 31 about the policy of insurance or purports to affirmatively or 32 negatively amend, extend, or alter the policy’s coverage. A 33 certificate of insurance shall not warrant that the policy 34 of insurance referenced in the certificate complies with the 35 -3- LSB 1704YC (3) 87 av/nh 3/ 4

H.F. _____ insurance or indemnification requirements of a contract and the 1 inclusion of a contract number or description in a certificate 2 of insurance shall not be interpreted as warranting such 3 compliance. 4 A person is entitled to notice of cancellation, nonrenewal, 5 or material changes in an insurance policy or any other similar 6 notice concerning the policy only if the person has such rights 7 under the terms of the policy or the policy endorsement. These 8 rights cannot be altered by a certificate of insurance. 9 The provisions of the bill are applicable to all 10 certificates of insurance issued in connection with property, 11 operations, or risks located in this state, regardless of 12 where the policyholder, insurer, insurance producer, or person 13 requesting or requiring the issuance of a certificate of 14 insurance is located. A certificate of insurance or any other 15 document or correspondence prepared, issued, requested, or 16 required in violation of the bill’s provisions is null and 17 void. 18 The commissioner of insurance may examine and investigate 19 the activities of any person the commissioner reasonably 20 believes has been or is engaged in an act or practice 21 prohibited under the bill; enforce the provisions of the bill 22 including issuance of cease and desist orders and imposition of 23 a penalty of $500 per violation; and adopt rules pursuant to 24 Code chapter 17A to administer the bill. 25 The bill takes effect upon enactment and is applicable 26 to certificates of insurance prepared, issued, requested, or 27 required beginning 90 days after the effective date of the 28 bill. 29 -4- LSB 1704YC (3) 87 av/nh 4/ 4