Transcript Document

Welcome to RIMS 2012 Annual
Conference & Exhibition
This is Session INS 100
Certificates of Insurance From the Risk
Management Perspective
Sponsored by RIMS Member & Chapter Services Committee
Welcome to Certificates of
Insurance from the Risk
Management Perspective
•Please Silence Cell Phone/Blackberry & Pagers
•Familiarize your self with the Emergency Exits
• The session is being recorded, press may be present.
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Speaker(s). Please complete the session evaluation
form and return it to the door Monitor.
Moderator
Hal D. Larson
Vice President, Risk Manager
Muscatine Foods Corporation
Speakers
Deborah Tauro
Sr. Risk Manager
Regency Centers
Gloria Brosius
Director, Risk Management
Farm Credit Council Services, Inc.
Kirk Jelinek
Sr. Commercial Sales Executive
Wells Fargo Insurance Services USA
What do we want to address?
Changes the ACORD Certificate forms, beginning in 2009, have
caused quite a stir in the Risk Management industry.
• What is a Certificate?
• Why are they used- why do we rely on them?
• What were the changes that are causing such a stir –
why did they occur?
• How can we use the current forms to satisfy our
Lenders, mortgage holders, or contracted parties?
• How can our Brokers help with this process.
Certificates – the facts.
• What is the purpose of Certificates?
• Why use them?
Gloria Brosius
Director, Risk Management
Farm Credit Council Services, Inc.
What is a Certificate?
• A Certificate of Insurance is merely
evidence of the policies issued and
in force at the time the Certificate
of Insurance is issued.
• Summarized informational
reflection of an insurance policy(s)
and it conveys no rights or
privileges.
• Is a “snapshot” in time.
Benefits of Using Certificates
.
Certificates of Insurance provide
benefits and good reasons to
continue use.
limitations
benefits
Benefits of Using Certificates
A Certificate of Insurance makes it easier to identify
insurers, policy numbers, etc., in the event of a claim
or other insurance-related issues.
Benefits of Using Certificates
Obtaining a Certificate of Insurance reinforces
commitment to the contract requirements.
Benefits of Using Certificates
Issuance of a Certificate of Insurance is sometimes
held to establish long-arm jurisdiction in the forum
state.
Recent Changes- what’s all the fuss
about?.
• Changes to the Certificate Form.
• How can we comply with the new Acord form?
Deborah Tauro
Sr. Risk Manager
Regency Centers
Significant Changes to the approved form.
The most significant change
to the form(s) affected two
areas on the Certificate:
1. The “disclaimer” text
2. The “cancellation” text
Significant Changes to the approved form.
“Disclaimer” text
Significant Changes to the approved form.
Old Text
“Cancellation Text”
New Text
Should any of the above described
policies be cancelled before the
expiration date thereof, the issuing
insurer will endeavor to mail ___
days written notice to the certificate
holder named to the left, but failure
to do so will impose no obligation or
liability of any kind upon the
insurer, or its agents or
representatives.
Should any of the above
described policies be cancelled
before the expiration date of the
policy thereof, notice will be
delivered in accordance with the
policy provisions.
How can Risk Managers cope and be in compliance?
Modify new contracts to
contractually require the opposite
contract party to directly provide
notice of cancellation or material
coverage changes.
How can Risk Managers cope and be in compliance?
Asking your broker to issue an outdated ACORD form
or altering the terms on the currently approved form
is an illegal practice.
How can Risk Managers cope and be in Compliance?
Certificate of Insurance references to a contract
or contract language does not afford or amend
any policy coverage.
From a Broker Perspective- where
do we go from here?
• Some do’s and don'ts when working with the new forms.
• Description of the Acord forms
• Guidelines for Issuance
Kirk Jelinek
Sr. Commercial Sales Executive
Wells Fargo Insurance Services USA
How can your Broker help?
Most agency/company agreements prohibit the
issuance of a modified certificate without the express
consent of the insurer.
How can Risk Managers and Brokers cope and be in compliance?
Ensure that the language used is the
same language afforded in the underlying
policy with no deviations.
How can Risk Managers and Brokers cope and be in compliance?
Ensure that current loan and mortgage
agreements reflect insurance
requirements that are currently
available in the marketplace.
Definition and Use of Certificates
ACORD 24
The Certificate of Property
Insurance is used when
the insured has requested
property insurance
certification to a third
party.
Definition and Use of Certificates
ACORD 25
The Certificate of
Liability Insurance is
used for most casualty
situations in which the
insured has requested
certification for a third
party.
Definition and Use of Certificates
ACORD 27
Provides a coverage statement
for mortgagees and loss payees
Who provide mortgages or loans
on residential property, personal
property, or small commercial
properties and are named in the
policy.
Definition and Use of Certificates
ACORD 28
Provides a coverage statement
for mortgagees, additional
insureds, and loss payees who
provide mortgages or loans on
real property or business
personal property insured under
a Commercial Lines Policy and
are named in the policy
Common Issues / Ample Solutions
• Additional Insured - Blanket additional insured
– The “-” policy includes a blanket automatic
additional insured endorsement [provision] that
provides additional insured status to the
certificate holder only when there is a written
contract between the named insured and the
certificate holder that requires such status.
Common Issues / Ample Solutions
• Additional Insured
– Endorsement (qualified) ….amended to include as
an insured the person or organization shown in
the schedule, but only with respect to liability
arising out of ongoing operations performed for
that insured.
Common Issues / Ample Solutions
• Primary and Non-Contributory
– Some carriers can provide an endorsement with “Primary
and Non-Contributory” wording.
• Cancellation
– Should any of the above described policies be cancelled
before the expiration date thereof, notice will be delivered
in accordance with policy provisions.
– Some carriers can provide an endorsement amending the
number of days for the notice.
Common Issues / Ample Solutions
• Waiver of Subrogation
– If SUBROGATION IS WAIVED, subject to the terms and
conditions of the policy, certain policies may require an
endorsement. A statement on this certificate does not
confer rights to the certificate holder in lieu of such
endorsement.
– The “-” policy includes a blanket automatic waiver of
subrogation endorsement that provides that this feature
only when there is a written contract between the named
insured and the certificate holder that requires it.
Conclusion
Risk Managers should endeavor to take an
active part in the construction and execution of
company contracts and commitments.
Relying on Certificates as informational
documents only, as they are intended, and
insisting on obtaining endorsements or
documentation in the policy will be the new
norm.
Questions?
We will take questions with the time remaining.
Our speakers will be available for a limited time at the
conclusion for personal or unanswered questions.
Resources
www.ACORD.org
www.irmi.com/online
www.willis.com - Willis, Construction Practice
Blueprint, September 2010 Certificate of InsuranceNotice of Cancellation Change – By Michael Campo,
October 2010 courtesy of Lockton Companies, LLC
Thank you for attending our session.
Please complete and turn in your program
and speaker evaluations.