senate Bill S3084B

2013-2014 Legislative Session

Relates to the issuance of certificates of insurance

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Sponsored By

Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
Jun 21, 2013 committed to rules
Jun 11, 2013 amended on third reading 3084b
vote reconsidered - restored to third reading
Jun 11, 2013 returned to senate
recalled from assembly
May 29, 2013 referred to insurance
delivered to assembly
passed senate
May 20, 2013 amended on third reading 3084a
Mar 06, 2013 advanced to third reading
Mar 05, 2013 2nd report cal.
Mar 04, 2013 1st report cal.146
Jan 29, 2013 referred to insurance

Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S3084 - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add Art 5 §§501 - 505, Ins L
Versions Introduced in 2011-2012 Legislative Session:
S4425B

S3084 - Bill Texts

view summary

Relates to the issuance of certificates of insurance and requires the issuance of a certificate of insurance as a summary or evidence of property or casualty insurance.

view sponsor memo
BILL NUMBER:S3084

TITLE OF BILL: An act to amend the insurance law, in relation to
certificates of insurance

PURPOSE: To establish standards for the proper issuance of certificates
of insurance and to authorize the department of financial services to
impose penalties against any person who violates the provisions of this
article.

SUMMARY OF PROVISIONS: Section 1 adds a new article five to the insur-
ance law, which sets forth specific standards for the issuance of
certificates of insurance.

Section 501 provides for definitions of the terms "certificate",
"certificate of insurance", "certificate holder", "insurance producer"
"insurer". "person", and "policyholder."

Section 502 sets forth prohibited practices, including, altering or
modifying a certificate of insurance form, requesting the issuance of a
certificate of insurance that contains false or misleading information,
issuing a certificate of insurance that alters the terms or coverage
provided by the insurance policy, issuing an opinion letter or similar
document that is inconsistent with this section. However, an accompany-
ing addendum with clarifying information is permissible.

Section 503 provides for the applicability of the provisions of this
section. Section 504 provides for enforcement powers of the superinten-
dent.

Section 505 provides for rules and regulations to be adopted by the
superintendent.

Section 2 of the bill provides for a 90 day effective date.

EXISTING LAW: Under current law, an insurance producer may not add terms
or clauses to a certificate of insurance which alter, expand or other-
wise modify the terms of the actual policy, unless authorized by the
insurer which has filed an appropriate endorsement with the Department
of Financial Services. The department may take disciplinary actions
against producers that engage in this practice.

However, those parties that make the request for a certificate that
alters the terms of the policy are not regulated by the Department of
Financial Services and the department has no authority to prohibit them
from demanding improper certificates of insurance.

Additionally, existing law does not define certificates of insurance or
sets standards for forms.

JUSTIFICATION: Insurance producers are often asked by their commercial
insurance clients to provide certificates of insurance to various third
parties. A certificate of insurance is commonly used in business trans-
actions as proof that a policy of insurance is in effect. It is a simple
document that merely summarizes the essential terms, conditions, and
duration of the contract of insurance that is in effect between the
insured and the insurer. Usually, the request for a certificate is made
by a party the insured has contracted with to provide services, includ-
ing city, state, and municipal agencies, public authorities, as well as
private contractors.

A problem has existed for many years where various government agencies
have required, as a condition of doing business, that an insured supply
evidence of insurance on preprinted forms supplied by the agency. These
forms often times alter, expand or modify the terms of the subject poli-
cy. In other cases, government agencies or private contractors may
demand that terms be added to the standard ACORD certificate of insur-
ance form which do not appear in the insurance policy. For example,
requests are often made for the certificate to include "hold harmless"
agreements or other clauses that alter the language of the policy, as
well as statements that the wording of the certificate will control in
the event of any inconsistency or conflict between the certificate and
the policy.

An insurance producer that is asked to provide these types of altered
certificates may not legally do so. The Department of Financial Services
has made it clear that an insurance producer may not add terms or claus-
es to a certificate of insurance which alter, expand or otherwise modify
the terms of the actual policy unless authorized by the insurer which
has filed an appropriate endorsement with the Superintendent of Finan-
cial Services. The department may seek disciplinary measures against
producers who do this.

Insurance producers are being placed in an untenable position. If they
do not comply with the request to issue an improper certificate, their
insurance client will not be allowed to perform work for the party
asking for the certificate. Unfortunately, an insurance producer that
complies with the law and refuses to issue an improper certificate will
often lose the client, who will find another insurance producer willing
to ignore the law and issue the improper certificate.

The department has recognized this problem over the years and has issued
numerous opinions and two circular letters on this topic (Circular
Letter 8 (1995) and Circular Letter 15 (1997)). Circular letter 15 was
also issued to city, state, and municipal agencies and other public
authorizes and corporate, as well as to producers. In the circular
letter, the department acknowledges that these government agencies were
making requests for improper certificates and advised insurance produc-
ers that they may not provide them.

Despite the department's efforts, government agencies continue to insist
upon certificates of insurance that do not merely act as evidence of
insurance, but seek to modify the terms and conditions of coverage.

This bill will remedy this problem by making it a violation of law for
any person to request the issuance of a certificate of insurance that
contains any false or misleading information. The bill gives the Super-
intendent of Insurance the authority to impose penalties against those
who violate the law, including any person who requests the issuance of a
certificate that does not comport with the requirements of the bill.

LEGISLATIVE HISTORY: S.4425-B of 2011-12

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: 90 days after it shall have become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3084

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 29, 2013
                               ___________

Introduced  by  Sens.  SEWARD, FARLEY -- read twice and ordered printed,
  and when printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to certificates of insur-
  ance

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The insurance law is amended by adding a new article 5 to
read as follows:
                                ARTICLE 5
                        CERTIFICATES OF INSURANCE
SECTION 501. DEFINITIONS.
        502. PROHIBITIONS.
        503. APPLICABILITY.
        504. ENFORCEMENT.
        505. RULES AND REGULATIONS.
  S 501. DEFINITIONS. FOR PURPOSES OF THIS SECTION:
  (A) "CERTIFICATE" OR "CERTIFICATE OF INSURANCE" MEANS ANY DOCUMENT  OR
INSTRUMENT,  NO  MATTER  HOW  TITLED  OR DESCRIBED, WHICH IS PREPARED OR
ISSUED BY AN INSURER OR INSURANCE PRODUCER AS EVIDENCE  OF  PROPERTY  OR
CASUALTY INSURANCE COVERAGE. "CERTIFICATE" OR "CERTIFICATE OF INSURANCE"
SHALL  NOT  INCLUDE  A POLICY OF INSURANCE OR INSURANCE BINDER, AND DOES
NOT AMEND, EXTEND OR ALTER THE COVERAGE PROVIDED BY THE POLICY OF INSUR-
ANCE TO WHICH THE CERTIFICATE MAKES REFERENCE, AND IS SUBJECT TO ALL THE
TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICY.
  (B) "CERTIFICATE HOLDER" MEANS ANY PERSON, OTHER THAN A  POLICYHOLDER,
THAT IS IDENTIFIED ON THE CERTIFICATE AS A CERTIFICATE HOLDER.
  (C)  "INSURANCE PRODUCER" HAS THE MEANING ASCRIBED TO IT BY SUBSECTION
(K) OF SECTION TWO THOUSAND ONE HUNDRED ONE OF THIS CHAPTER.
  (D) "INSURER" MEANS ANY PERSON "DOING AN INSURANCE BUSINESS"  AS  SUCH
PHRASE  IS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED ONE OF THIS CHAP-
TER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06628-02-3

S. 3084                             2

  (E) "PERSON" MEANS ANY INDIVIDUAL, PARTNERSHIP,  CORPORATION,  ASSOCI-
ATION,  OR OTHER LEGAL ENTITY, INCLUDING ANY PUBLIC ENTITY AS DEFINED IN
PARAGRAPH FIFTY-ONE OF SUBSECTION (A) OF SECTION ONE  HUNDRED  SEVEN  OF
THIS  CHAPTER,  ANY  STATE  AUTHORITY  AS  DEFINED IN SUBDIVISION ONE OF
SECTION  TWO  OF  THE  PUBLIC  AUTHORITIES  LAW,  ANY LOCAL AUTHORITY AS
DEFINED IN SUBDIVISION TWO OF SECTION TWO OF THE PUBLIC AUTHORITIES LAW,
AND ANY INTERSTATE OR INTERNATIONAL AUTHORITY AS DEFINED IN  SUBDIVISION
THREE OF SECTION TWO OF THE PUBLIC AUTHORITIES LAW.
  (F)  "POLICYHOLDER"  MEANS A PERSON WHO HAS CONTRACTED WITH A PROPERTY
OR CASUALTY INSURER FOR INSURANCE COVERAGE.
  S 502. PROHIBITIONS. (A) NO PERSON SHALL PREPARE, ISSUE,  REQUEST,  OR
REQUIRE THE ISSUANCE OF A CERTIFICATE UNLESS THE CERTIFICATE IS:
  (1)  A  STANDARD CERTIFICATE OF INSURANCE FORM PROMULGATED AND AUTHOR-
IZED FOR USE BY THE ASSOCIATION FOR COOPERATIVE OPERATIONS RESEARCH  AND
DEVELOPMENT (ACORD) OR THE INSURANCE SERVICES OFFICE (ISO);
  (2)  A FORM PROMULGATED BY THE INSURANCE COMPANY THAT HAS UNDERWRITTEN
THE POLICY REFERENCED IN THE CERTIFICATE OF INSURANCE; OR
  (3) A FORM PREPARED, ISSUED, OR REQUESTED AS EVIDENCE OF INSURANCE  IN
CONNECTION WITH A COMMERCIAL LENDING TRANSACTION IN WHICH THE UNDERLYING
PROPERTY SERVES AS THE PRIMARY COLLATERAL SECURING THE BORROWER'S REPAY-
MENT  OF  THE  LOAN, INCLUDING, BUT NOT LIMITED TO A FORM PROMULGATED BY
THE MORTGAGE BANKERS ASSOCIATION (MBA).
  (B) NO PERSON SHALL ALTER, MODIFY, REQUEST OR REQUIRE  THE  ALTERATION
OF A CERTIFICATE OF INSURANCE FORM.
  (C) NO PERSON SHALL REQUEST OR REQUIRE THAT A CERTIFICATE OF INSURANCE
FORM  CONTAIN  ADDITIONAL TERMS, CONDITIONS, OR LANGUAGE OF ANY KIND NOT
FOUND IN THE INSURANCE POLICY TO WHICH THE CERTIFICATE  MAKES  REFERENCE
OR TO AN ENDORSEMENT TO SUCH POLICY.
  (D)  NO  PERSON  SHALL  REQUEST OR REQUIRE EITHER IN ADDITION TO OR IN
LIEU OF A CERTIFICATE OF INSURANCE, AN OPINION LETTER, WARRANTY,  STATE-
MENT,  SUPPLEMENTAL  CERTIFICATE OR ANY OTHER DOCUMENT OR CORRESPONDENCE
THAT IS INCONSISTENT WITH THE PROHIBITIONS OF THIS SECTION.  HOWEVER, AN
INSURER OR INSURANCE PRODUCER MAY PREPARE OR  ISSUE  AN  ADDENDUM  TO  A
CERTIFICATE THAT CLARIFIES AND EXPLAINS THE COVERAGE PROVIDED BY A POLI-
CY  OF  INSURANCE  AND  OTHERWISE COMPLIES WITH THE REQUIREMENTS OF THIS
SECTION, PROVIDED SUCH AUTHORITY IS  GRANTED  TO  THE  PRODUCER  BY  THE
INSURER.
  (E) NO PERSON SHALL REQUEST OR REQUIRE THAT A CERTIFICATE OF INSURANCE
CONTAIN  REFERENCES  TO  A  CONTRACT OTHER THAN THE INSURANCE POLICY, OR
WARRANT THAT THE INSURANCE POLICIES REFERENCED IN THE CERTIFICATE COMPLY
WITH THE REQUIREMENTS  OF  A  PARTICULAR  CONTRACT  PROVIDED  HOWEVER  A
CERTIFICATE  MAY  INCLUDE  A  CONTRACT TITLE OR DESCRIPTION FOR THE SOLE
PURPOSE OF IDENTIFYING THE PROJECT FOR WHICH THE CERTIFICATE WAS ISSUED,
BUT SUCH INCLUSION SHALL NOT  BE  INTERPRETED  AS  WARRANTING  THAT  THE
INSURANCE  POLICIES  REFERENCED  IN  THE  CERTIFICATE  COMPLY  WITH  THE
REQUIREMENTS OF SUCH CONTRACT.
  (F) NO PERSON SHALL REQUEST, REQUIRE, PREPARE OR ISSUE  A  CERTIFICATE
OF  INSURANCE  THAT: (I) DOES NOT ACCURATELY STATE THE TERMS OF COVERAGE
PROVIDED BY THE POLICY OR POLICIES OF INSURANCE TO WHICH THE CERTIFICATE
MAKES REFERENCE; OR (II) PURPORTS TO ALTER, AMEND, EXTEND, OR  MISREPRE-
SENT THE TERMS OF COVERAGE TO WHICH THE CERTIFICATE MAKES REFERENCE.
  S  503.  APPLICABILITY.  THE PROVISIONS OF THIS SECTION SHALL APPLY TO
ALL CERTIFICATE HOLDERS, POLICYHOLDERS, INSURERS,  INSURANCE  PRODUCERS,
OR  ANY  OTHER  PERSON  AND  TO CERTIFICATE OF INSURANCE FORMS ISSUED AS
EVIDENCE OF  INSURANCE  COVERAGES  ON  PROPERTY,  OPERATIONS,  OR  RISKS

S. 3084                             3

LOCATED IN THIS STATE, REGARDLESS OF WHERE THE CERTIFICATE HOLDER, POLI-
CYHOLDER, INSURER, OR INSURANCE PRODUCER IS LOCATED.
  S  504.  ENFORCEMENT.    THE SUPERINTENDENT SHALL HAVE THE POWER UNDER
SECTION FOUR HUNDRED THREE OF THE FINANCIAL SERVICES LAW TO EXAMINE  AND
INVESTIGATE THE ACTIVITIES OF ANY PERSON THAT THE SUPERINTENDENT REASON-
ABLY BELIEVES HAS BEEN OR IS ENGAGED IN AN ACT OR PRACTICE PROHIBITED BY
THIS  ARTICLE.  THE  SUPERINTENDENT  SHALL HAVE THE POWER TO ENFORCE THE
PROVISIONS OF THIS SECTION AND IMPOSE ANY AUTHORIZED PENALTY  OR  REMEDY
AS  PROVIDED  UNDER SECTION FOUR HUNDRED EIGHT OF THE FINANCIAL SERVICES
LAW AGAINST ANY PERSON WHO VIOLATES THIS ARTICLE.
  S 505. RULES AND REGULATIONS. THE SUPERINTENDENT MAY  ADOPT  RULES  OR
REGULATIONS  AS  HE  OR  SHE  CONSIDERS  APPROPRIATE  TO  CARRY  OUT THE
PROVISIONS OF THIS ARTICLE.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

Co-Sponsors

S3084A - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add Art 5 §§501 - 505, Ins L
Versions Introduced in 2011-2012 Legislative Session:
S4425B

S3084A - Bill Texts

view summary

Relates to the issuance of certificates of insurance and requires the issuance of a certificate of insurance as a summary or evidence of property or casualty insurance.

view sponsor memo
BILL NUMBER:S3084A

TITLE OF BILL: An act to amend the insurance law, in relation to
certificates of insurance

PURPOSE:

To establish standards for the proper issuance of certificates of
insurance and to authorize the department of financial services to
impose penalties against any person who violates the provisions of
this article.

SUMMARY OF PROVISIONS:

Section 1 adds a new article five to the insurance law, which sets
forth specific standards for the issuance of certificates of
insurance.

Section 501 provides for definitions of the terms "certificate",
"certificate of insurance", "certificate holder", "insurance
producer", "insurer", "person", and "policyholder".

Section 502 sets forth prohibited practices, including, altering or
modifying a certificate of insurance form, requesting the issuance of
a certificate of insurance that contains false or misleading
information, issuing a certificate of insurance that alters the terms
or coverage provided by the insurance policy, issuing an opinion
letter or similar document that is inconsistent with this section.
However, an accompanying addendum with clarifying information is
permissible.

Section 503 provides for the applicability of the provisions of this
section.

Section 504 provides for enforcement powers of the superintendent.

Section 505 provides for rules and regulations to be adopted by the
superintendent.

Section 2 of the bill provides for a 90 day effective date.

EXISTING LAW:

Under current law, an insurance producer may not add terms or clauses
to a certificate of insurance which alter, expand or otherwise modify
the terms of the actual policy, unless authorized by the insurer which
has filed an appropriate endorsement with the Department of Financial
Services. The department may take disciplinary actions against
producers that engage in this practice.

However, those parties that make the request for a certificate that
alters the terms of the policy are not regulated by the Department of
Financial Services and the department has no authority to prohibit
them from demanding improper certificates of insurance.

Additionally, existing law does not define certificates of insurance
or sets standards for forms.


JUSTIFICATION:

Insurance producers are often asked by their commercial insurance
clients to provide certificates of insurance to various third parties.
A certificate of insurance is commonly used in business transactions
as proof that a policy of insurance is in effect. It is a simple
document that merely summarizes the essential terms, conditions, and
duration of the contract of insurance that is in effect between the
insured and the insurer. Usually, the request for a certificate is
made by a party the insured has contracted with to provide services,
including city, state, and municipal agencies, public authorities, as
well as private contractors.

A problem has existed for many years where various government agencies
have required, as a condition of doing business, that an insured
supply evidence of insurance on preprinted forms supplied by the
agency. These forms often times alter, expand or modify the terms of
the subject policy. In other cases, government agencies or private
contractors may demand that terms be added to the standard ACORD
certificate of insurance form which do not appear in the insurance
policy . For example, requests are often made for the certificate to
include "hold harmless" agreements or other clauses that alter the
language of the policy, as well as statements that the wording of the
certificate will control in the event of any inconsistency or conflict
between the certificate and the policy.

An insurance producer that is asked to provide these types of altered
certificates may not legally do so. The Department of Financial
Services has made it clear that an insurance producer may not add
terms or clauses to a certificate of insurance which alter, expand or
otherwise modify the terms of the actual policy unless authorized by
the insurer which has filed an appropriate endorsement with the
Superintendent of Financial Services. The department may seek
disciplinary measures against producers who do this.

Insurance producers are being placed in an untenable position. If they
do not comply with the request to issue an improper certificate, their
insurance client will not be allowed to perform work for the party
asking for the certificate. Unfortunately, an insurance producer that
complies with the law and refuses to issue an improper certificate
will often lose the client, who will, find another insurance producer
willing to ignore the law and issue the improper certificate.

The department has recognized this problem over the years and has
issued numerous opinions and two circular letters on this topic
(Circular Letter 8 (1995) and Circular Letter 15 (1997)). Circular
letter 15 was also issued to city, state, and municipal agencies and
other public authorizes and corporate, as well as to producers. In the
circular letter, the department acknowledges that these government
agencies were mating requests for improper certificates and advised
insurance producers that they may not provide them.

Despite the department's efforts, government agencies continue to
insist upon certificates of insurance that do not merely act as
evidence of insurance, but seek to modify the terms and conditions of
coverage.


This bill will remedy this problem by making it a violation of law for
any person to request the issuance of a certificate of insurance that
contains any false or misleading information. The bill gives the
Superintendent of Insurance the authority to impose penalties against
those who violate the law, including any person who requests the
issuance of a certificate that does not comport with the requirements
of the bill.

LEGISLATIVE HISTORY:

S.4425-B of 2011-12

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

90 days after it shall have become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3084--A
    Cal. No. 146

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 29, 2013
                               ___________

Introduced  by  Sens.  SEWARD,  FARLEY, LARKIN -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Insur-
  ance  --  reported favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted, retaining its place in the order of third reading

AN ACT to amend the insurance law, in relation to certificates of insur-
  ance

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new article  5  to
read as follows:
                                ARTICLE 5
                        CERTIFICATES OF INSURANCE
SECTION 501. DEFINITIONS.
        502. PROHIBITIONS.
        503. APPLICABILITY.
        504. ENFORCEMENT.
        505. RULES AND REGULATIONS.
  S 501. DEFINITIONS. FOR PURPOSES OF THIS SECTION:
  (A)  "CERTIFICATE" OR "CERTIFICATE OF INSURANCE" MEANS ANY DOCUMENT OR
INSTRUMENT, NO MATTER HOW TITLED OR  DESCRIBED,  WHICH  IS  PREPARED  OR
ISSUED  BY  AN  INSURER OR INSURANCE PRODUCER AS EVIDENCE OF PROPERTY OR
CASUALTY INSURANCE COVERAGE. "CERTIFICATE" OR "CERTIFICATE OF INSURANCE"
SHALL NOT INCLUDE A POLICY OF INSURANCE OR INSURANCE  BINDER,  AND  DOES
NOT AMEND, EXTEND OR ALTER THE COVERAGE PROVIDED BY THE POLICY OF INSUR-
ANCE TO WHICH THE CERTIFICATE MAKES REFERENCE, AND IS SUBJECT TO ALL THE
TERMS,  EXCLUSIONS  AND  CONDITIONS  OF  SUCH POLICY.   A CERTIFICATE OF
INSURANCE SHALL NOT CONFER TO ANY PERSON NEW OR ADDITIONAL RIGHTS BEYOND
WHAT THE REFERENCED POLICY OF INSURANCE EXPRESSLY PROVIDES.
  (B) "CERTIFICATE HOLDER" MEANS ANY PERSON, OTHER THAN A  POLICYHOLDER,
THAT IS IDENTIFIED ON THE CERTIFICATE AS A CERTIFICATE HOLDER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06628-08-3

S. 3084--A                          2

  (C)  "INSURANCE PRODUCER" HAS THE MEANING ASCRIBED TO IT BY SUBSECTION
(K) OF SECTION TWO THOUSAND ONE HUNDRED ONE OF THIS CHAPTER.
  (D)  "INSURER"  MEANS ANY PERSON "DOING AN INSURANCE BUSINESS" AS SUCH
PHRASE IS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED ONE OF THIS  CHAP-
TER.
  (E)  "PERSON"  MEANS ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, ASSOCI-
ATION, OR OTHER LEGAL ENTITY, INCLUDING ANY PUBLIC ENTITY AS DEFINED  IN
PARAGRAPH  FIFTY-ONE  OF  SUBSECTION (A) OF SECTION ONE HUNDRED SEVEN OF
THIS CHAPTER, ANY STATE AUTHORITY  AS  DEFINED  IN  SUBDIVISION  ONE  OF
SECTION  TWO  OF  THE  PUBLIC  AUTHORITIES  LAW,  ANY LOCAL AUTHORITY AS
DEFINED IN SUBDIVISION TWO OF SECTION TWO OF THE PUBLIC AUTHORITIES LAW,
AND ANY INTERSTATE OR INTERNATIONAL AUTHORITY AS DEFINED IN  SUBDIVISION
THREE OF SECTION TWO OF THE PUBLIC AUTHORITIES LAW.
  (F)  "POLICYHOLDER"  MEANS A PERSON WHO HAS CONTRACTED WITH A PROPERTY
OR CASUALTY INSURER FOR INSURANCE COVERAGE.
  S 502. PROHIBITIONS. (A) NO PERSON SHALL PREPARE, ISSUE,  REQUEST,  OR
REQUIRE THE ISSUANCE OF A CERTIFICATE UNLESS THE CERTIFICATE IS:
  (1)  A  STANDARD CERTIFICATE OF INSURANCE FORM PROMULGATED AND AUTHOR-
IZED FOR USE BY THE ASSOCIATION FOR COOPERATIVE OPERATIONS RESEARCH  AND
DEVELOPMENT (ACORD) OR THE INSURANCE SERVICES OFFICE (ISO);
  (2)  A FORM PROMULGATED BY THE INSURANCE COMPANY THAT HAS UNDERWRITTEN
THE POLICY REFERENCED IN THE CERTIFICATE OF INSURANCE; OR
  (3) A FORM PREPARED, ISSUED, OR REQUESTED AS EVIDENCE OF INSURANCE  IN
CONNECTION WITH A COMMERCIAL LENDING TRANSACTION IN WHICH THE UNDERLYING
PROPERTY SERVES AS THE PRIMARY COLLATERAL SECURING THE BORROWER'S REPAY-
MENT  OF  THE  LOAN, INCLUDING, BUT NOT LIMITED TO A FORM PROMULGATED BY
THE MORTGAGE BANKERS ASSOCIATION (MBA).
  (B) NO PERSON SHALL ALTER, MODIFY, REQUEST OR REQUIRE  THE  ALTERATION
OF A CERTIFICATE OF INSURANCE FORM.
  (C) NO PERSON SHALL REQUEST OR REQUIRE THAT A CERTIFICATE OF INSURANCE
FORM  CONTAIN  ADDITIONAL TERMS, CONDITIONS, OR LANGUAGE OF ANY KIND NOT
FOUND IN THE INSURANCE POLICY TO WHICH THE CERTIFICATE  MAKES  REFERENCE
OR TO AN ENDORSEMENT TO SUCH POLICY.
  (D)  NO  PERSON  SHALL  REQUEST OR REQUIRE EITHER IN ADDITION TO OR IN
LIEU OF A CERTIFICATE OF INSURANCE, AN OPINION LETTER, WARRANTY,  STATE-
MENT,  SUPPLEMENTAL  CERTIFICATE OR ANY OTHER DOCUMENT OR CORRESPONDENCE
THAT IS INCONSISTENT WITH THE PROHIBITIONS OF THIS SECTION.  HOWEVER, AN
INSURER OR INSURANCE PRODUCER MAY PREPARE OR  ISSUE  AN  ADDENDUM  TO  A
CERTIFICATE THAT CLARIFIES AND EXPLAINS THE COVERAGE PROVIDED BY A POLI-
CY  OF  INSURANCE  AND  OTHERWISE COMPLIES WITH THE REQUIREMENTS OF THIS
SECTION, PROVIDED SUCH AUTHORITY IS  GRANTED  TO  THE  PRODUCER  BY  THE
INSURER.
  (E) NO PERSON SHALL REQUEST OR REQUIRE THAT A CERTIFICATE OF INSURANCE
CONTAIN  REFERENCES  TO  A  CONTRACT OTHER THAN THE INSURANCE POLICY, OR
WARRANT THAT THE INSURANCE POLICIES REFERENCED IN THE CERTIFICATE COMPLY
WITH THE REQUIREMENTS  OF  A  PARTICULAR  CONTRACT  PROVIDED  HOWEVER  A
CERTIFICATE  MAY  INCLUDE  A  CONTRACT TITLE OR DESCRIPTION FOR THE SOLE
PURPOSE OF IDENTIFYING THE PROJECT FOR WHICH THE CERTIFICATE WAS ISSUED,
BUT SUCH INCLUSION SHALL NOT  BE  INTERPRETED  AS  WARRANTING  THAT  THE
INSURANCE  POLICIES  REFERENCED  IN  THE  CERTIFICATE  COMPLY  WITH  THE
REQUIREMENTS OF SUCH CONTRACT.
  (F) NO PERSON SHALL REQUEST, REQUIRE, PREPARE OR ISSUE  A  CERTIFICATE
OF  INSURANCE  THAT: (I) DOES NOT ACCURATELY STATE THE TERMS OF COVERAGE
PROVIDED BY THE POLICY OR POLICIES OF INSURANCE TO WHICH THE CERTIFICATE
MAKES REFERENCE; (II) PURPORTS TO ALTER, AMEND, EXTEND, OR  MISREPRESENT
THE TERMS OF COVERAGE TO WHICH THE CERTIFICATE MAKES REFERENCE; OR (III)

S. 3084--A                          3

PURPORTS  TO  CONFER  TO ANY PERSON NEW OR ADDITIONAL RIGHTS BEYOND WHAT
THE REFERENCED POLICY OF INSURANCE EXPRESSLY PROVIDES.
  S  503.  APPLICABILITY.  THE PROVISIONS OF THIS SECTION SHALL APPLY TO
ALL CERTIFICATE HOLDERS, POLICYHOLDERS, INSURERS,  INSURANCE  PRODUCERS,
OR  ANY  OTHER  PERSON  AND  TO CERTIFICATE OF INSURANCE FORMS ISSUED AS
EVIDENCE OF  INSURANCE  COVERAGES  ON  PROPERTY,  OPERATIONS,  OR  RISKS
LOCATED IN THIS STATE, REGARDLESS OF WHERE THE CERTIFICATE HOLDER, POLI-
CYHOLDER, INSURER, OR INSURANCE PRODUCER IS LOCATED.
  S  504.  ENFORCEMENT.    THE SUPERINTENDENT SHALL HAVE THE POWER UNDER
SECTION FOUR HUNDRED THREE OF THE FINANCIAL SERVICES LAW TO EXAMINE  AND
INVESTIGATE THE ACTIVITIES OF ANY PERSON THAT THE SUPERINTENDENT REASON-
ABLY BELIEVES HAS BEEN OR IS ENGAGED IN AN ACT OR PRACTICE PROHIBITED BY
THIS  ARTICLE.  THE  SUPERINTENDENT  SHALL HAVE THE POWER TO ENFORCE THE
PROVISIONS OF THIS SECTION AND IMPOSE ANY AUTHORIZED PENALTY  OR  REMEDY
AS  PROVIDED  UNDER SECTION FOUR HUNDRED EIGHT OF THE FINANCIAL SERVICES
LAW AGAINST ANY PERSON WHO VIOLATES THIS ARTICLE.
  S 505. RULES AND REGULATIONS. THE SUPERINTENDENT MAY  ADOPT  RULES  OR
REGULATIONS  AS  HE  OR  SHE  CONSIDERS  APPROPRIATE  TO  CARRY  OUT THE
PROVISIONS OF THIS ARTICLE.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

Co-Sponsors

S3084B (ACTIVE) - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add Art 5 §§501 - 505, Ins L
Versions Introduced in 2011-2012 Legislative Session:
S4425B

S3084B (ACTIVE) - Bill Texts

view summary

Relates to the issuance of certificates of insurance and requires the issuance of a certificate of insurance as a summary or evidence of property or casualty insurance.

view sponsor memo
BILL NUMBER:S3084B

TITLE OF BILL: An act to amend the insurance law, in relation to
certificates of insurance

PURPOSE:

To establish standards for the proper issuance of certificates of
insurance and to authorize the department of financial services and
other entities to impose penalties against any person who violates the
provisions of this article.

SUMMARY OF PROVISIONS:

Section 1 adds a new article five to the insurance law, which sets
forth specific standards for the issuance of certificates of
insurance.

Section 501 provides for definitions of the terms "certificate",
"certificate of insurance", "certificate holder", "insurance
producer", "insurer", "person", and "policyholder."

Section 502 sets forth prohibited practices, including, altering or
modifying a certificate of insurance form, knowingly requesting the
issuance of a certificate of insurance that contains false or
misleading information, issuing a certificate of insurance that alters
the terms or coverage provided by the insurance policy, issuing an
opinion letter or similar document that is inconsistent with this
section. However, an accompanying addendum, with clarifying
information is permissible.

Section 503 provides for the applicability of the provisions of this
section.

Section 504 provides for enforcement powers of the superintendent, the
NYS inspector general, and other appropriate entities.

Section 505 provides for rules and regulations to be adopted by the
superintendent.

Section 2 of the bill provides for a 90 day effective date.

EXISTING LAW:

Under current law, an insurance producer may not add terms or clauses
to a certificate of insurance which alter, expand or otherwise modify
the terms of the actual policy, unless authorized by the insurer which
has filed an appropriate endorsement with the Department of Financial
Services. The department may take disciplinary actions against
producers that engage in this practice.

However, those parties that make the request for a certificate that
alters the terms of the policy are not regulated by the Department of
Financial Services and the department has no authority to prohibit
them from demanding improper certificates of insurance.


Additionally, existing law does not define certificates of insurance
or sets standards for forms.

JUSTIFICATION:

Insurance producers are often asked by their commercial insurance
clients to provide certificates of insurance to various third parties.
A certificate of insurance is commonly used in business transactions
as proof that a policy of insurance is in effect. It is a simple
document . that merely summarizes the essential terms, conditions, and
duration of the contract of insurance that is in effect between the
insured and the insurer. Usually, the request for a certificate is
made by a party the insured has contracted with to provide services,
including city, state, and municipal agencies, public authorities, as
well as private contractors.

A problem has existed for many years where various government agencies
have required, as a condition of doing business, that an insured
supply evidence of insurance on preprinted forms supplied by the
agency, These forms often times alter, expand or modify the tellus of
the subject policy. In other cases, government agencies or private
contractors may demand that terms be added to the standard ACORD
certificate of insurance form which do not appear in the insurance
policy.For example, requests are often made for the certificate to
include "hold harmless" agreements or other clauses that alter the
language of the policy, as well as statements that the wording of the
certificate will control in the event of any inconsistency or conflict
between the certificate and the policy.

An insurance producer that is asked to provide these types of altered
certificates may not legally do. so. The Department of Financial
Services has made it clear that an insurance producer may not add
terms or clauses to a certificate of insurance which alter, expand or
otherwise modify the terms of the actual policy unless authorized by
the insurer which has filed an appropriate endorsement with the
Superintendent of Financial Services. The department may seek
disciplinary measures against producers who do this.

Insurance producers are being placed in an untenable position. If they
do not comply with the request to issue an improper certificate, their
insurance client will not be allowed to perform work for the party
asking for the certificate. Unfortunately, an insurance producer that
complies with the law and refuses to issue an improper. Certificate
will often lose the client, who will find another insurance producer
willing to ignore the law and issue the improper certificate.

The department has recognized this problem over the years and has
issued numerous opinions and two circular letters on this topic
(Circular Letter 8 (1995) and Circular Letter 15 (1997)). Circular
letter 1.5 was also issued to city, state, and municipal agencies and
other public authorizes and corporate, as well. as to producers. In
the circular letter, the department acknowledges that these government
agencies were making requests for improper certificates and advised
insurance producer that they may not provide them. Despite the
department's efforts, government agencies continue to insist upon
certificates of insurance that do not merely act as evidence of
insurance, but seek to modify the terms and conditions of coverage.


This bill will remedy this problem by making it a violation of law for
any person to request the issuance of a certificate of insurance that
contains any false or misleading information.

LEGISLATIVE HISTORY:

S.4425-B of 2011-12

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

90 days after it shall have become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3084--B
    Cal. No. 146

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 29, 2013
                               ___________

Introduced  by  Sens.  SEWARD,  FARLEY, LARKIN -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Insur-
  ance  --  reported favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted, retaining its place in the order of third reading -- passed
  by  Senate and delivered to the Assembly, recalled, vote reconsidered,
  restored to third reading, amended and  ordered  reprinted,  retaining
  its place in the order of third reading

AN ACT to amend the insurance law, in relation to certificates of insur-
  ance

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new article  5  to
read as follows:
                                ARTICLE 5
                        CERTIFICATES OF INSURANCE
SECTION 501. DEFINITIONS.
        502. PROHIBITIONS.
        503. APPLICABILITY.
        504. ENFORCEMENT.
        505. RULES AND REGULATIONS.
  S 501. DEFINITIONS. FOR PURPOSES OF THIS SECTION:
  (A)  "CERTIFICATE" OR "CERTIFICATE OF INSURANCE" MEANS ANY DOCUMENT OR
INSTRUMENT, NO MATTER HOW TITLED OR  DESCRIBED,  WHICH  IS  PREPARED  OR
ISSUED  BY  AN  INSURER OR INSURANCE PRODUCER AS EVIDENCE OF PROPERTY OR
CASUALTY INSURANCE COVERAGE. "CERTIFICATE" OR "CERTIFICATE OF INSURANCE"
SHALL NOT INCLUDE A POLICY OF INSURANCE OR INSURANCE  BINDER,  AND  DOES
NOT AMEND, EXTEND OR ALTER THE COVERAGE PROVIDED BY THE POLICY OF INSUR-
ANCE TO WHICH THE CERTIFICATE MAKES REFERENCE, AND IS SUBJECT TO ALL THE
TERMS,  EXCLUSIONS  AND  CONDITIONS  OF  SUCH POLICY.   A CERTIFICATE OF

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06628-15-3

S. 3084--B                          2

INSURANCE SHALL NOT CONFER TO ANY PERSON NEW OR ADDITIONAL RIGHTS BEYOND
WHAT THE REFERENCED POLICY OF INSURANCE EXPRESSLY PROVIDES.
  (B)  "CERTIFICATE HOLDER" MEANS ANY PERSON, OTHER THAN A POLICYHOLDER,
THAT IS IDENTIFIED ON THE CERTIFICATE AS A CERTIFICATE HOLDER.
  (C) "INSURANCE PRODUCER" HAS THE MEANING ASCRIBED TO IT BY  SUBSECTION
(K) OF SECTION TWO THOUSAND ONE HUNDRED ONE OF THIS CHAPTER.
  (D)  "INSURER"  MEANS ANY PERSON "DOING AN INSURANCE BUSINESS" AS SUCH
PHRASE IS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED ONE OF THIS  CHAP-
TER.
  (E)  "PERSON"  MEANS ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, ASSOCI-
ATION, OR OTHER LEGAL ENTITY, BUT SHALL  NOT  INCLUDE  ANY  GOVERNMENTAL
ENTITY, AS THAT TERM IS DEFINED IN THIS SECTION.
  (F)  "GOVERNMENTAL ENTITY" MEANS ANY PUBLIC ENTITY AS DEFINED IN PARA-
GRAPH FIFTY-ONE OF SUBSECTION (A) OF SECTION ONE HUNDRED SEVEN  OF  THIS
CHAPTER,  ANY  STATE  AUTHORITY AS DEFINED IN SUBDIVISION ONE OF SECTION
TWO OF THE PUBLIC AUTHORITIES LAW, ANY LOCAL  AUTHORITY  AS  DEFINED  IN
SUBDIVISION  TWO  OF  SECTION TWO OF THE PUBLIC AUTHORITIES LAW, AND ANY
INTERSTATE OR INTERNATIONAL AUTHORITY AS DEFINED IN SUBDIVISION THREE OF
SECTION TWO OF THE PUBLIC AUTHORITIES LAW.
  (G) "POLICYHOLDER" MEANS A PERSON WHO HAS CONTRACTED WITH  A  PROPERTY
OR CASUALTY INSURER FOR INSURANCE COVERAGE.
  S  502.  PROHIBITIONS.  (A)  NO  PERSON  OR  GOVERNMENTAL ENTITY SHALL
PREPARE, ISSUE, KNOWINGLY REQUEST, OR REQUIRE THE ISSUANCE OF A  CERTIF-
ICATE UNLESS THE CERTIFICATE IS:
  (1)  A  STANDARD CERTIFICATE OF INSURANCE FORM PROMULGATED AND AUTHOR-
IZED FOR USE BY THE ASSOCIATION FOR COOPERATIVE OPERATIONS RESEARCH  AND
DEVELOPMENT (ACORD) OR THE INSURANCE SERVICES OFFICE (ISO);
  (2)  A FORM PROMULGATED BY THE INSURANCE COMPANY THAT HAS UNDERWRITTEN
THE POLICY REFERENCED IN THE CERTIFICATE OF INSURANCE; OR
  (3) A FORM PREPARED, ISSUED, OR REQUESTED AS EVIDENCE OF INSURANCE  IN
CONNECTION WITH A COMMERCIAL LENDING TRANSACTION IN WHICH THE UNDERLYING
PROPERTY SERVES AS THE PRIMARY COLLATERAL SECURING THE BORROWER'S REPAY-
MENT  OF  THE  LOAN, INCLUDING, BUT NOT LIMITED TO A FORM PROMULGATED BY
THE MORTGAGE BANKERS ASSOCIATION (MBA).
  (B) NO PERSON OR GOVERNMENTAL ENTITY SHALL  ALTER,  MODIFY,  KNOWINGLY
REQUEST, OR REQUIRE THE ALTERATION OF A CERTIFICATE OF INSURANCE FORM.
  (C)  NO  PERSON  OR  GOVERNMENTAL  ENTITY  SHALL  KNOWINGLY REQUEST OR
REQUIRE THAT A CERTIFICATE OF INSURANCE FORM CONTAIN  ADDITIONAL  TERMS,
CONDITIONS, OR LANGUAGE OF ANY KIND NOT FOUND IN THE INSURANCE POLICY TO
WHICH THE CERTIFICATE MAKES REFERENCE OR TO AN ENDORSEMENT TO SUCH POLI-
CY.
  (D)  NO  PERSON  OR  GOVERNMENTAL  ENTITY  SHALL  KNOWINGLY REQUEST OR
REQUIRE EITHER IN ADDITION TO OR IN LIEU OF A CERTIFICATE OF  INSURANCE,
AN  OPINION LETTER, WARRANTY, STATEMENT, SUPPLEMENTAL CERTIFICATE OR ANY
OTHER DOCUMENT OR CORRESPONDENCE THAT IS INCONSISTENT WITH THE  PROHIBI-
TIONS  OF  THIS SECTION.   HOWEVER, AN INSURER OR INSURANCE PRODUCER MAY
PREPARE OR ISSUE  AN  ADDENDUM  TO  A  CERTIFICATE  THAT  CLARIFIES  AND
EXPLAINS  THE  COVERAGE  PROVIDED BY A POLICY OF INSURANCE AND OTHERWISE
COMPLIES WITH THE REQUIREMENTS OF THIS SECTION, PROVIDED SUCH  AUTHORITY
IS GRANTED TO THE PRODUCER BY THE INSURER.
  (E)  NO  PERSON  OR  GOVERNMENTAL  ENTITY  SHALL  KNOWINGLY REQUEST OR
REQUIRE THAT A CERTIFICATE OF INSURANCE CONTAIN REFERENCES TO A CONTRACT
OTHER THAN THE INSURANCE POLICY, OR WARRANT THAT THE INSURANCE  POLICIES
REFERENCED  IN THE CERTIFICATE COMPLY WITH THE REQUIREMENTS OF A PARTIC-
ULAR CONTRACT PROVIDED HOWEVER A  CERTIFICATE  MAY  INCLUDE  A  CONTRACT
TITLE OR DESCRIPTION FOR THE SOLE PURPOSE OF IDENTIFYING THE PROJECT FOR

S. 3084--B                          3

WHICH THE CERTIFICATE WAS ISSUED, BUT SUCH INCLUSION SHALL NOT BE INTER-
PRETED  AS  WARRANTING  THAT  THE  INSURANCE  POLICIES REFERENCED IN THE
CERTIFICATE COMPLY WITH THE REQUIREMENTS OF SUCH CONTRACT.
  (F)  NO  PERSON  OR  GOVERNMENTAL  ENTITY  SHALL  KNOWINGLY REQUEST OR
REQUIRE, PREPARE OR ISSUE A CERTIFICATE OF INSURANCE THAT: (I) DOES  NOT
ACCURATELY  STATE  THE TERMS OF COVERAGE PROVIDED BY THE POLICY OR POLI-
CIES OF  INSURANCE  TO  WHICH  THE  CERTIFICATE  MAKES  REFERENCE;  (II)
PURPORTS  TO ALTER, AMEND, EXTEND, OR MISREPRESENT THE TERMS OF COVERAGE
TO WHICH THE CERTIFICATE MAKES REFERENCE; OR (III) PURPORTS TO CONFER TO
ANY PERSON NEW OR ADDITIONAL RIGHTS BEYOND WHAT THE REFERENCED POLICY OF
INSURANCE EXPRESSLY PROVIDES.
  S 503. APPLICABILITY. THE PROVISIONS OF THIS SECTION  SHALL  APPLY  TO
ALL  CERTIFICATE  HOLDERS, POLICYHOLDERS, INSURERS, INSURANCE PRODUCERS,
OR ANY OTHER PERSON AND TO CERTIFICATE  OF  INSURANCE  FORMS  ISSUED  AS
EVIDENCE  OF  INSURANCE  COVERAGES  ON  PROPERTY,  OPERATIONS,  OR RISKS
LOCATED IN THIS STATE, REGARDLESS OF WHERE THE CERTIFICATE HOLDER, POLI-
CYHOLDER, INSURER, OR INSURANCE PRODUCER IS LOCATED.
  S 504. ENFORCEMENT. (A) THE SUPERINTENDENT SHALL HAVE THE POWER  UNDER
SECTION  FOUR HUNDRED THREE OF THE FINANCIAL SERVICES LAW TO EXAMINE AND
INVESTIGATE THE ACTIVITIES OF ANY PERSON THAT THE SUPERINTENDENT REASON-
ABLY BELIEVES HAS BEEN OR IS ENGAGED IN AN ACT OR PRACTICE PROHIBITED BY
THIS ARTICLE. THE SUPERINTENDENT SHALL HAVE THE  POWER  TO  ENFORCE  THE
PROVISIONS  OF  THIS SECTION AND IMPOSE ANY AUTHORIZED PENALTY OR REMEDY
AS PROVIDED UNDER SECTION FOUR HUNDRED EIGHT OF THE  FINANCIAL  SERVICES
LAW AGAINST ANY PERSON WHO VIOLATES THIS ARTICLE.
  (B)  THE  OFFICE  OF  THE STATE INSPECTOR GENERAL SHALL HAVE THE POWER
PURSUANT TO SECTION FIFTY-THREE OF THE EXECUTIVE LAW TO INVESTIGATE  ANY
GOVERNMENTAL  ENTITY  THAT  IS CONSIDERED A COVERED AGENCY UNDER SECTION
FIFTY-ONE OF THE EXECUTIVE LAW THAT HAS BEEN OR IS ENGAGED IN AN ACT  OR
PRACTICE  PROHIBITED  BY  THIS  ARTICLE.  IF  A  GOVERNMENTAL ENTITY NOT
CONSIDERED A COVERED AGENCY UNDER SECTION FIFTY-ONE OF THE EXECUTIVE LAW
HAS BEEN OR IS ENGAGED IN AN ACT OR PRACTICE PROHIBITED BY THIS ARTICLE,
THAT ENTITY'S INSPECTOR GENERAL, OTHER COMPLIANCE OR  INTERNAL  INVESTI-
GATIVE UNIT OR OTHER OFFICIAL OR ENTITY WITH PROPER AUTHORITY SHALL HAVE
THE POWER TO INVESTIGATE SUCH ENTITY.
  S  505.  RULES  AND REGULATIONS. THE SUPERINTENDENT MAY ADOPT RULES OR
REGULATIONS AS  HE  OR  SHE  CONSIDERS  APPROPRIATE  TO  CARRY  OUT  THE
PROVISIONS OF THIS ARTICLE.
  S  2.  This  act shall take effect on the ninetieth day after it shall
have become a law.

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