Bulletin, August 27, 2012, Misleading Property and Casualty Certificates of Insurance

​Last Updated: August 27, 2012

Date: August 27, 2012
To: All Property and Casualty Insurers and Agents
From: Theodore K. Nickel, Commissioner of Insurance
Subject: Misleading Property and Casualty Certificates of Insurance

​"Certificates of insurance" are typically used to provide proof of liability insurance and to summarize the terms of the policy for a third party instead of providing a complete copy of the policy. This bulletin is to clarify the use of certificates of insurance by intermediaries and insurers within the state of Wisconsin. This bulletin supersedes the Office of the Commissioner of Insurance (OCI) bulletin issued on May 5, 2008.

Section 631.20, Wis. Stat., generally requires insurers to file insurance policy forms with OCI prior to using the forms in Wisconsin. Section 628.34 (1), Wis. Stat., provides that "No person who is or should be licensed … may make or cause to be made any communication relating to an insurance contract … which contains false or misleading information, including information misleading because of incompleteness …. No intermediary may provide a misleading certificate of insurance."

Certificates of insurance which clearly and accurately state the insurance coverage provided to an insured or third party are not forms subject to filing with OCI under s. 631.20, Wis. Stat., because these certificates do not affirmatively or negatively amend, extend or alter coverage or terms of the policy. They simply summarize the coverage and terms of the policy.

Where an insurer or an agent acting on behalf of the insurer uses a certificate of insurance or other evidence of coverage which goes beyond an accurate summary of the policy, the insurer or agent may be misrepresenting the policy language as issued by the insurer and filed with OCI. Language included in the certificate that amends or extends coverage or terms of the policy, such as stating that coverage is in force when it is not or stating that a notice of policy cancellation will be given when it will not, is a misrepresentation. An insurer or agent issuing these certificates would be in violation of s. 628.34 (1), Wis. Stat., and may be subject to administrative penalties including possible license suspension or revocation.

To ensure that consumers as well as those requesting certificates of insurance are aware that the certificate does not expand or restrict coverage, an insurer or agent should include on the certificate a statement such as: "This certificate of insurance neither affirmatively nor negatively amends, extends, or alters the coverage afforded by the policies described herein." A similar statement is included on the preprinted certificate of insurance forms provided by both ACORD and ISO.

OCI encourages insurers to notify their agents of this bulletin. If you have any questions regarding the information contained in this bulletin, you may contact Ronnie Demergian at ronnie.demergian@wisconsin.gov or 608-266-7077.