Resolutions
Resolutions
We all make resolutions this time of year … some of us with more success than others. In fact, by the time this article reaches your desk, many resolutions will have been broken already. I, personally, have resolved to lose five pounds and I’ve already broken my resolution to exercise more.
In the big scheme of things, though, five pounds is nothing compared to the weight of unrealized promises made by our leaders and lawmakers. Take for example, the commitment that most politicians make to enact legislation that will help build business and the economy by cutting outdated and costly bureaucracy. We hear it all the time, particularly in Albany. It’s been on Gov. Cuomo’s campaign agenda since he first ran for the office.
So, it’s perplexing to consider why a bill, which has been supported by multiple major industries and which passed in both houses of the Legislature (by landslides on both sides) because it would protect and help business, would fall victim to the governor’s veto late this last session. The bill regulating certificates of insurance was put on the governor’s desk for signature. It was one of the most important bills to land on his desk for years. It sat there for well over a month, and in late December, he vetoed it.
Readers of this publication are well aware of the challenges caused by Certificates of Insurance and municipalities and large real estate and holding firms that require them from our clients in the construction industries. More and more, agents are put in tough positions by their clients, who tell them they only need the certificates to get paid or to get a job they need. The agents are placed between a rock and a hard place: They want to help their clients but know that they can’t legally or with good conscience provide a document that indicates coverages are in place when they aren’t. The agent cannot change or modify the terms of the policy with a certificate of insurance. In fact, those who would have them do so should know better, as they often have lawyers and insurance experts and risk managers on staff initiating these requests by using outdated and unrealistic forms.
Municipalities and state entities are the biggest violators requesting terms that are not in the policy. They are the ones breaking law. When a catastrophe happens, the insurance agent and his or her client are left holding the bag and the people who perpetrated the injustices will be pointing fingers and screaming the loudest.
New York state law does not regulate the improper use of certificates of insurance, leaving both insurance agents and general contractors desperate for this type of reform. And, while the Department of Financial Services has issued notices about the improper use of them, I am unaware of any enforcement action they’ve taken on this issue.
Several industries, their representatives and trade associations have implored our lawmakers to address this problem for years. Continuing to let third parties require these documents as certification of coverage for anything other than stated in the policy is dangerous. I have no doubt that the governor and those advising him must realize a certificate is nothing but a piece of paper that reflects what is in an existing policy; and that insurance certificate fraud is rampant; and that the victims are injured parties who find that work was done on the basis of a faulty certificate, with no insurance exists to compensate them for their injuries and loss. So, I don’t know what the governor’s advisors told him, but I am now convinced that none of them can even spell insurance.
I believe Gov. Cuomo, who has pledged to open up our state for business and who was so vigilant in helping those affected by the recent storm Sandy has good intentions. So, in this case of the certificates legislation, I have to believe he has been misled. If the Senate and the Assembly can work together to get this done, and trade associations and even multiple industries have worked together to get this done, what could possibly be the reason to reject it?
Does anyone, save the state bureaucrats who are so set in their ways that they fight any change to their jobs, have a reason that this bill should not be signed into law? Why are certificates of insurance any different than other, similar documentation? No agent would issue an illegal auto insurance id card, for example—the enforcement would deter this from happing. Certificates are just the same and similar respect for this documentation should be enforced.
I’ve heard rumblings that some of the departments in the State of New York did not want this bill signed because they did not want to change the way they do business. Well, that’s too bad. Simply allowing a practice because change is hard is not a good enough excuse to veto a widely popular and important bill. The next time a crane collapses in New York City and someone is killed, the governor should call the family of the deceased and apologize for not signing the bill.
I know through my affiliation with PIA that an inordinate amount of hard work has gone into getting this bill passed by both the Senate and the Assembly. The legislators, including Assembly Insurance Chairman Kevin Cahill, who advocated for this reform and Assemblyman Morelle and Senator Seward, who sponsored the bill, did the right thing and should be commended for recognizing its importance.
As the new legislative season is about to begin, our trade associations have vowed to make this a priority again. They will continue to invest effort and money in explaining how necessary this bill is, but who knows if we’ll be successful getting this bill passed again. As far as I’m concerned, it’s criminal not to pass this bill into law.
Agents, builders and industry groups like PIA have resolved to continue their fight to right the certificates dilemma in New York. The governor should, too.