Ohio Brings Certificates of Insurance Closer to Home

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Ohio recently passed House Bill 259, a law that aims to ensure that certificates of insurance accurately reflect the policies they represent. In the past, certificates that did not accurately reflect the insurance policy caused coverage disputes. The new measure attempts to cure this defect and gives the Ohio insurance regulator more jurisdiction to ensure that the certificate accurately reflects the policy — with one stated aim to protect agents and policyholders against insurance fraud. In passing this law, Ohio joins 24 other states with similar language.

Among other things, the act clarifies that a certificate of insurance is not an insurance policy and, therefore, cannot amend, extend, or alter any coverage afforded by the underlying policy. Furthermore, it cannot add any rights beyond what is laid out in the policy, and the certificate of insurance cannot contain any language that is “unfair, misleading, or deceptive, or violates public policy.” The language also cannot violate any law or rule laid down by the insurance regulator. Finally, the act clarifies that the certificate is not a guarantee that the underlying policy is in compliance with applicable law.

The act is scheduled to become effective on March 23, 2016.