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PIANY lauds two-house introduction of legislation critical to construction coverage clarity

ALBANY, N.Y. - The Professional Insurance Agents of New York State Inc., is applauding the New York State Legislature for its determination in addressing a continuing problem for construction and insurance businesses, which are being asked to produce certificates of insurance that may misrepresent coverages that are in place in order to do business.

The corresponding bills, A.9590 and S.6545, were introduced in their respective houses by Assembly Majority Leader Joseph D. Morelle, D-136, and Senate Insurance Committee Chair James L. Seward, R-51, last week. They would establish standards and prohibit: demands for certificates that include wording different from actual policies; requiring insurance producers to certify coverage; using certificates as warrantees of coverage; or requiring certificates that misstate coverage. PIANY and a coalition of other groups drafted similar legislation last session, which also was sponsored by Assemblyman Morelle and Sen. Seward. It passed both chambers of the New York State Legislature and was delivered to the governor, who vetoed it on Dec. 6. Throughout that time, PIANY has continued its campaign to get this bill passed by the legislature (again) and signed into law.

"We commend Assemblyman Morelle and Sen. Seward, who recognize the precarious position businesses in both the construction and insurance industries are in without this legislation and who are tenacious in their efforts to alleviate a burgeoning issue," said PIANY President Alan Plafker, CPIA. "We urge the Assembly and Senate not to abandon this issue and pass this critical legislation so the governor can have the opportunity to reconsider his misguided veto last session."

Despite multiple opinions issued by the Office of General Counsel in the Department of Financial Services, New York state law does not regulate the improper use of certificates of insurance, leaving both insurance agents and general contractors desperate for this type of reform. Insurance certificate fraud is widespread and rampant and the victims are the injured parties who find that work was being done on the basis of a faulty certificate and that no insurance exists to compensate them for their injuries and loss.

Support for the legislation continues to be endorsed by a host of insurance agent associations, insurance carriers and general contractors.

PIANY is a trade association representing professional, independent insurance agencies, brokerages and their employees throughout the state.