How the NCOIL certificates model came to fruition is a textbook case in how legislation should be proposed, deliberated and enacted. PIA National President Andrew C. Harris testified at several NCOIL meetings over the past two years, urging the legislators to act because agents are increasingly being asked to add information to certificates of insurance that may not match the underlying policy terms.

Harris brokered a compromise with lenders, who had expressed concern that the model would make it impossible for them to rely on certificates as adequate evidence of coverage. To address these concerns, NCOIL also passed a model binder law making it clear that the binder is the proper document for lenders to use as evidence of commercial property coverage, not a certificate.

The end result: A major step was taken to solve a problem that has vexed the insurance industry for decades. “This is how insurance regulation needs to be done,” Harris wrote in an op-ed for the National Underwriter. “It proves that, contrary to those who wish to dismantle state regulation and replace it with a new federal insurance regulatory bureaucracy, our state-based system is both effective and efficient, and that insurance regulation is in the capable hands of state legislators and regulators—where it belongs.”

Congress would do well to learn some things from our state insurance legislators about how to legislate effectively.