In Virginia, those who request false certificates of insurance and insurance agents who comply will come under a new law to take effect on July 1st, to punish this practices and make it easier for state insurance regulators to deal with it.
As reported by IFAwebnews.com, the law “defines and clarifies what a certificate is; prohibits any person from issuing or demanding the issuance of a certificate that includes false or misleading information; affirms that certificates are not insurance policies and cannot be used to alter, revise, or modify and insurance policy; and most importantly, authorizes the Bureau of Insurance to enforce the act.”
The bill was introduced as a response to hundreds of agent complaints to the Independent Insurance Agents of Virginia (IIAV) who had been pressured to falsify certificates.
Similar efforts are being undertaken in more than half the states in the country. The National Association of Insurance Commissioners and the National Council of Insurance Legislators are formulating model laws for states to consider.
“Simply put, this legislation is broad in scope and will address egregious efforts by third-party certificate holders to coerce agents in committing fraud at the worst and misrepresentation of insurance policies at the very least,” John Watson, IIAV board chairman, said in a statement.
Last year, the Virginia State Corporation Commission Bureau of Insurance issued an administrative letter indicating it could not regulate certificates of insurance, leaving insurance agents in a precarious position.