Risk Insider: Carolyn Snow

It’s Time for the Certificate of Insurance To Die

By: | February 17, 2016

Carolyn Snow is director of risk management at Humana and served as president of RIMS in 2014. She can be reached at [email protected]

As a novice underwriter, one of my responsibilities was approving requests for certificates of insurance.  At that time, insurance companies actually underwrote the request and issued the COI.

Finally the carriers figured out it was a waste of time and money since virtually nothing adverse ever happened. Then they told the agents/brokers the COI was their job.

I naïvely hoped COIs would also go away over the course of my career, but the opposite has occurred.

Over time the occasional certificate has turned into a glut of paperwork.  Requests for Proposals contain massive amounts of conditions driven by consultants who make their living by coming up with unnecessary requests.

It’s time for the certificate of insurance to die and I am in favor of a violent death.

Companies have sprung up to check certificates and if it says Smith Inc. instead of Smith Incorporated it must be done again. Don’t get me started on requests for additional insured status.

Most years RIMS has a session on certificates and people flock to it by the hundreds.  Over time it has been one of the most popular sessions.

COIs float around offices like dust in a desert.  People request them, people issue them, people get them and people file them.

At least a couple of times a week I get an envelope that floated around the company for days and finally gets to me. I, of course, give it to someone else.

Brokers have departments dedicated to certificates and even with the best automated systems they still take time.  The request generally comes from a business area which really does not understand what they need or how to complete the request form, so someone must help get the information together.

Once done and sent to the original requester they frequently discover they really needed something else or the consultant does not like the size of the font and it all starts again.

Where is the voice screaming – Stop the Insanity!

The value of the certificate is far outweighed by the waste of time and money and inefficiencies of the systems.  The whole process could be handled by simply putting an attestation in the agreement that certain levels of insurance will be maintained and in event of loss involving the agreement, the insurance must be produced.

All those paper certificates should be shredded and used for a ticker tape parade in Time Square.  I have always wanted one, but I am pretty confident I am not going to be on a Super Bowl winning team at this point in my life.

Since there is an entire industry built around the process, no doubt some will disagree. If you do, don’t write, call or text me.  My mind is made up and totally closed on the subject.

Emails will be deleted, texts will be ignored, phone calls will be disconnected and snail mail will go in the shredder for the parade.

It’s time for the certificate of insurance to die and I am in favor of a violent death.  In fact, I confess to committing the murder.

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The R&I Editorial Team can be reached at [email protected]