Bir 2307 Certificate

[Auriville Cha]

I]t has come to our attention that some licensed producers may complete these certificates of insurance forms on behalf of their clients and add terms or clauses that the public entity requires but which are not contained in the insurance policy.

A Certificate of Insurance is often used as proof that a policy ofinsurance is in effect. It is merely a document used in business to summarize informationabout the insurance coverage. It is usually a brief summary of the essential terms,conditions and duration of the contract of insurance that is in effect between the insuredand the insurer. The Certificate of Insurance is not a contract and is not required bystatute or regulation. However, the Certificate of Insurance must contain the sameinformation as the insurance policy. It is not intended to confer to a certificate holdernew or additional rights beyond what the insurance policy provides. Thus, if any provisionin the Certificate of Insurance is not contained in the policy and it imposes anobligation or liability not presently existing upon an insurer, such difference wouldalter, expand or modify the rights between an insured and the insurer and would constitutea policy form which must be filed with the Superintendent pursuant to N.Y. Ins. Law 2307. Therefore, licensed producers may not add terms or clauses to a Certificate ofInsurance that alter, expand, or otherwise modify the terms of the actual policy. Asstated in Circular Letter No. 15 (1997), the Department may seek disciplinary measuresagainst producers who act in this manner.

Except as otherwise provided herein, no policy form shall be delivered or issued for delivery unless it has been filed with the superintendent and either he has approved it, or thirty days have elapsed and he has not disapproved it as misleading or violative of public policy.

If a Certificate of Insurance amends, expands or otherwise alters theterms of the applicable insurance policy, it constitutes an endorsement that is a policyform, which subject to certain exceptions, must be filed with the Superintendent ofInsurance pursuant to section 2307(b).

The inquirer states that, "For the party requesting the insurancecertificate, that party must really obtain and review the entire policy in order to ensurethat the certificate of insurance prepared by the producer actually reflects all of theterms of the policy. How else will one ever know if the producer has issued a properinsurance certificate?" A producer is in violation of the Insurance Law if he amends,expands or alters the terms of the policy without authorization from the insurer and,where required, approval from this Department. However, it is always prudent to review theentire policy in order to ensure that the Certificate of Insurance prepared by theproducer actually reflects the terms of the policy.

"Board" means the board of directors or executive board, of an association, except that in the case of a horizontal property regime created pursuant to the Horizontal Property Act ( 55.1-2000 et seq.), "board" means the council of co-owners.

"Rules and regulations" means restrictions or limitations adopted by the board or authorized committee addressing the use, operation, appearance, or design of a portion of the common interest community.

Unless exempt pursuant to 55.1-2317, any contract for the resale of a unit in a common interest community shall disclose (i) that the unit is located in a common interest community; (ii) that the seller or the seller's agent is required to obtain from the association a resale certificate and provide it to the purchaser or the purchaser's agent; (iii) the purchaser's right to cancel the contract pursuant to 55.1-2312; (iv) that the purchaser or the purchaser's agent may request an updated resale certificate pursuant to 55.1-2311; and (v) that the purchaser's right to receive the resale certificate and the right to cancel the contract are waived conclusively if not exercised before settlement. If the contract does not contain the disclosures required by this section, the purchaser's sole remedy is to cancel the contract prior to settlement.

A. The seller or the seller's agent shall obtain the resale certificate from the association and provide such resale certificate to the purchaser or the purchaser's agent. This requirement shall not be waived or changed by agreement.

B. Unless exempt pursuant to 55.1-2317, the association, the association's managing agent, or any third party preparing the resale certificate on behalf of the association shall deliver such resale certificate within 14 days after a written request by a seller or seller's agent. If no resale certificate is delivered within 14 days after such request, the resale certificate shall be deemed unavailable.

C. The association, association's managing agent, or any third party preparing the resale certificate on behalf of the association shall deliver the resale certificate to the seller, or to such person as the seller may direct, either printed or in a generally accepted electronic format as the seller may request.

D. The information contained in the resale certificate shall be current as of a date specified on the resale certificate. The seller or purchaser may request an updated resale certificate as provided in 55.1-2311.

A. The association shall include the completed resale certificate form, developed by the common interest community board pursuant to subdivision 3 of 54.1-2350, with supporting documentation set out in the following order:

13. A statement of any unsatisfied judgments against the association and the nature and status of any pending actions in which the association is a party and that could have a material impact on the association, the owners, or the unit being sold;

14. A statement describing any insurance coverage provided by the association for the benefit of the owners, including fidelity coverage, and any insurance coverage recommended or required to be obtained by the owners;

15. A statement as to whether the board has given or received written notice that any existing uses, occupancies, alterations, or improvements in or to the unit being sold or to the limited elements assigned thereto violate any provision of the governing documents or rules and regulations together with copies of any notices provided;

16. A statement as to whether the board has received written notice from a governmental agency of any violation of environmental, health, or building codes with respect to the unit being sold, the limited elements assigned thereto, or any other portion of the common interest community that has not been cured;

19. A statement of the remaining term of any leasehold estate affecting a common area or common element, as those terms are defined in 55.1-1800, 55.1-1900, and 55.1-2100, in the common interest community and the provisions governing any extension or renewal of such leasehold;

21. A statement setting forth any restriction, limitation, or prohibition on the right of an owner to display the flag of the United States, including reasonable restrictions as to the size, time, place, and manner of placement or display of such flag;

27. In a cooperative, a statement setting forth whether the cooperative association is aware of any statute, regulation, or rule applicable to the cooperative that would affect an owner's ability to deduct real estate taxes and interest paid by the cooperative association for federal income tax purposes;

30. Certification that the association has filed with the Common Interest Community Board the annual report required by law, which certification shall indicate the filing number assigned by the Common Interest Community Board and the expiration date of such filing.

A. If a resale certificate was issued more than 30 days but less than 12 months before settlement, the seller or the purchaser, upon proof of being the contract purchaser of the unit, may request an updated resale certificate. The updated resale certificate shall be delivered to the person requesting it, or as such person may direct, in the format requested. The updated resale certificate shall be delivered within 10 days after the written request.

C. A settlement agent or other third party authorized by the seller or purchaser may request a financial update and the association shall provide such information within three business days after the written request.

A. If delivery of the resale certificate to the purchaser or purchaser's agent, whether or not complete pursuant to 55.1-2310, or a notice that the resale certificate is unavailable, occurs before the contract is ratified, the purchaser may cancel the contract within a time period agreed upon by all parties in the ratified real estate contract. If no time period is specified in the ratified real estate contract, the purchaser shall have three days from the date of ratification to cancel the contract.

B. If delivery of the resale certificate to the purchaser or purchaser's agent, whether or not complete pursuant to 55.1-2310, or a notice that such resale certificate is unavailable, occurs after the contract is ratified, the purchaser may cancel the contract within a time period agreed upon by all parties to the real estate contract. If no time period is specified in the ratified real estate contract, the purchaser shall have three days from receipt of the resale certificate or notice that the resale certificate is unavailable to cancel the contract.

C. If the resale certificate or notice that the resale certificate is unavailable has not been delivered to the purchaser, the purchaser or purchaser's agent may cancel the contract at any time prior to settlement.

D. Written notice of cancellation shall be provided to the seller in accordance with the terms of the contract. The purchaser shall have the burden to demonstrate delivery of the notice of cancellation.

A. A seller providing a resale certificate pursuant to 55.1-2310 or 55.1-2311 shall not be liable to the purchaser for any erroneous information provided by the association and included in the certificate or for the failure or delay of the association to provide the resale certificate in a timely manner.

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