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WidespreadmisunderstandingregardingtheproperuseofcerticatesofinsurancehasledtonewchangesrelatingtotheirusethatwillbecomeeffectiveJuly12012accordingtoVirginiax19sBureauofInsurance.TheBureaureportedthatsomeprivateandpublicentitiesrequestedinsurersandproducerstoissuecerticatesinconsistentwiththeunderlyinginsurancepolicyorcontractaviolationofthestatex19sinsurancecodeaswellassubjectinginsurersandproducerstopossibledisciplinaryaction.EarlierthisyearduringtheVirginiaActsofAssemblyanacttoamendthecoderelatingtounfairinsurancetradepracticesregardingcerticatesofinsurancewasapproved.AccordingtoJoeHudginsvicepresidentofeducationandtechnicalaffairsfortheIndependentInsuranceAgentsofVirginiamanyoftheassociationx19smembersreceivedmultiplerequestsgeneratedoutoftheconstructionbusiness.Oneexampleincludedamemberagentwhoreceivedarequesttoaddlanguagetothecerticateindicatingtherewerenoexclusions.Whiletheinsuredwantedcertainoperationstobecoveredandmeantthatnoneoftheoperationswereexcludedplacingthephrasex1ctherex19snoexclusionsonthepolicythatapplytoconstructionx1dwouldmeanthepolicyvirtuallyhadnone.Anotherexampleinvolvedacontractorwhodemandedcompletedoperationscoveragebeaddedtoacommercialautopolicythreateningtoholdbackpaymentifitwasnx19t.Inanotherinstanceacerticateholderaskedthatanadditionalinsuredendorsementbeaddedtoaworkersx19compensationpolicydespiteitbeingillegaltodosoinVirginia.x1cTheleveragetheyhaveifanagentdoesnx19tputsomethingonthecerticatethatx19sfalseormisleadingistheirinsuredwonx19tgetthecontractortheyx19llgetkickedoffthejobortheywonx19tgetpaidforworkalreadydone.Soitx19sbecomeahugeproblemx1dsaidHudginsofthebillheandBobBradshawpresidentandCEOoftheassociationhelpedwrite.x1cWhatcanhappenobviouslyifIputsomethingonacerticatethatx19snotcoveredandIgiveittoyoueventhoughthatcerticateisnotacontractsomethinghappensyoucangotocourtandrelyonthatcerticateandpossiblythejudgemighttelltheinsurancecompanyx18heyyouragentsaiditx19scoveredx13payitx19andtheinsurancecompanythensuestheagenttheagentisbarebecausethatx19sanintentionalactandEOdoesnx19tcoverthemx1dHudginssaid.HudginsandBradshawapproachedVirginiaSenatorJohnWatkinsandDelegateTomRusttohavethebillintroducedtotheVirginiaGeneralAssemblywhereitpassedunanimously.Asaresultsection38.2-518CerticatesofInsurancewasaddedtotheinsurancecode.ThenewsectionprovidesadetaileddenitionofwhatacerticateofinsuranceisandappliestoallcerticatesissuedinthestateofVirginia.x1cAmending38.2-515givestheBureauofInsurancetheauthoritytoenforcethelaw.Thepenaltiesareinthecodeanditcouldbemonetarypenaltiesorlosingyourlicensenotjustasaninsuranceagentoraninsurancecompanybutacerticateholdersayacontractoriftheyknowinglydemandsomethingthattheyknowisfalseormisleadingtheycanbeprosecutedx1dHudginssaid.x1cThelawgivestheBureauofInsurancetheauthoritytopoliceittheauthoritytoenforceit.Thelawisspecic.Itsaysx18anypersonx19notjustaninsuranceagentoraninsurancecompany.Itdeneswhatacerticateofinsuranceisandwhatitisnx19t.x1dInadditionthenewlycreatedsectionoutlinesthetermsofusetoincludeB.Nopersonshallissueordeliveranycerticateofinsurancethatattemptstoconferanyrightsuponathirdpartybeyondwhatthereferencedpolicyofinsuranceexpresslyprovides.C.Nocerticateofinsurancemayrepresentaninsurerx19sobligationtogivenoticeofcancellationornonrenewaltoathirdpartyunlessthegivingofsuchnoticeisrequiredbythepolicy.D.Nopersonshallissueordeliveracerticateofinsuranceunlessitcontainsasubstantiallysimilarstatementtothefollowingx1cThiscerticateofinsuranceisissuedasamatterofinformationonly.Itconfersnorightsuponthethirdpartyrequestingthecerticatebeyondwhatthereferencedpolicyofinsuranceexpresslyprovides.Thiscerticateofinsurancedoesnotextendamendoralterthecoveragetermsexclusionsorconditionsaffordbythepolicyreferencedinthiscerticateofinsurance.x1dIfacerticateofinsuranceisrequiredbyastateorfederalagencyandaccuratelyreectsthecoverageprovidedbytheunderlyingpoliciesnosuchpage13APublicationofIndependentInsuranceAgentsofWVcontinuedonpage14VIRGINIATOENFORCECERTIFICATEOFINSURANCEUSAGE