This bill proposes to amend current statutes by adding a new section, 20-443.03, to define and regulate certificates of insurance. The bill clarifies that a certificate of insurance is not an insurance policy and does not alter the coverage provided by an insurance policy or confer additional rights beyond what is explicitly stated in the policy. It prohibits the preparation, issuance, or requirement of certificates that contain false or misleading information, alter coverage, or misrepresent compliance with contractual insurance requirements. Additionally, it establishes that only policyholders are entitled to notice of changes in policy terms unless otherwise specified in the policy.

Furthermore, the bill grants the Director of the Department of Financial Institutions the authority to investigate violations of these regulations and impose civil penalties of up to $1,000 per violation. It also allows the Director to adopt rules for implementation and specifies that the regulations apply to certificates issued for property and casualty risks in Arizona, regardless of the location of the involved parties. Any certificate issued in violation of these provisions would be deemed void. The act will apply to contracts entered into after its effective date.

Statutes affected:
Introduced Version: 20-443.03
House Engrossed Version: 20-443.03