NOTICE – Signature of Officers on Insurance Policies, Effect of Change in Officers

Insurance policy forms filed with the Department typically include signatures of insurance company officers. In the past, a change of insurance company officers could require the insurer to submit new policy forms with the new officers’ names and signatures. With the new officers’ signatures in the policy form, all new contracts would contain correct officers on the date of contract inception.

This process of refiling policy forms can involve considerable time and expense for insurers, with little added benefit to consumers. There is a binding contract with the insurer even if the policy is signed by officers that are no longer serving in those positions, because the policy and application, along with payment of premium, constitute a binding contract. Additionally, an agent’s countersignature on an insurance policy or application binds the insurer to the contract.

Fifty years ago, it may have been difficult to identify the officers of an insurer. Today, an insurer’s website or the Department of Insurance “Company Lookup” from its website at allow consumers to quickly identify company officers and company contact information.

For these reasons, the Department has decided to eliminate the requirement that policies be refiled when the only reason for refiling is a change in company officers. If officers whose signatures appear on insurance policies cease to be such officers before the policies are sold, the officers’ signatures will nevertheless be valid and sufficient for all purposes to the same extent as if those officers had remained in office until the contracts’ inception.

Any insurer that decides to save money and time by following this new procedure cannot later attempt to avoid its obligations by claiming any contractual defect related to proper officer signatures.

For fire and lightning policies, the Department has legal authority to make this variance from the 1943 Standard Fire Insurance Policy of the State of New York (“Standard Fire Policy”) based on Neb. Rev. Stat. § 44-501(11), as amended in 2003. In the 2003 legislative session, LB 216 was introduced specifically to overrule Volquardson v. Hartford Ins. Co., 264 Neb. 337, 647 N.W.2d 599 (2002) (finding where § 44-501(6) and (11) were in conflict, (6) controlled) and restore the Department’s right to approve fire and lightning policies that vary from the Standard Fire Policy and from the provisions described at § 44-501(1)-(10). LB 216 added an introductory clause to § 44-501(11): “Notwithstanding any other provision of this section, the Director of Insurance may approve any form of policy with variations in terms and conditions from the standard policy provided for in this section.”

Any questions concerning this notice may be directed to Laura Arp, Counsel, at 402-471-2201.