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.•Your feedback is very important to RIMS and the 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

SpeakersDeborah Tauro

Sr. Risk ManagerRegency Centers

Gloria BrosiusDirector, Risk Management

Farm Credit Council Services, Inc.

Kirk JelinekSr. Commercial Sales Executive

Wells Fargo Insurance Services USA

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.

What do we want to address?

Certificates – the facts.

Gloria BrosiusDirector, Risk Management

Farm Credit Council Services, Inc.

• What is the purpose of Certificates?• Why use them?

• 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.

What is a Certificate?

Benefits of Using Certificates

.

benefits

limitations

Certificates of Insurance provide benefits and good reasons to

continue use.

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.

Obtaining a Certificate of Insurance reinforces commitment to the contract requirements.

Benefits of Using Certificates

Issuance of a Certificate of Insurance is sometimesheld to establish long-arm jurisdiction in the forum

state.

Benefits of Using Certificates

Recent Changes- what’s all the fuss about?.

Deborah TauroSr. Risk ManagerRegency Centers

• Changes to the Certificate Form.• How can we comply with the new Acord form?

Significant Changes to the approved form.

The most significant change to the form(s) affected two areas on the Certificate:

1. The “disclaimer” text2. The “cancellation” text

Significant Changes to the approved form.

“Disclaimer” text

Significant Changes to the approved form.

Old 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.

“Cancellation Text”

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?

Kirk JelinekSr. Commercial Sales Executive

Wells Fargo Insurance Services USA

• Some do’s and don'ts when working with the new forms.• Description of the Acord forms• Guidelines for Issuance

Most agency/company agreements prohibit the issuance of a modified certificate without the express

consent of the insurer.

How can your Broker help?

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 PropertyInsurance is used whenthe insured has requestedproperty insurancecertification 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 statementfor 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

• 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.

Common Issues / Ample Solutions

Conclusion

Risk Managers should endeavor to take an active part in the construction and execution ofcompany contracts and commitments.

Relying on Certificates as informationaldocuments only, as they are intended, andinsisting on obtaining endorsements ordocumentation 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 PracticeBlueprint, September 2010 Certificate of Insurance-Notice 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.