§ 2108 — Adjusters; licensing and duties

New York § 2108

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 21: Agents, Brokers, Adjusters, Consultants and Intermediaries

Text

§ 2108. Adjusters; licensing and duties. (a) (1) Adjusters shall be\nlicensed as independent adjusters or as public adjusters.\n (2) The superintendent may prescribe the types of independent\nadjusters' licenses according to the kind or kinds of insurance claims\nwhich the licensee is to be authorized to investigate and adjust.\n (3) No adjuster shall act on behalf of an insurer unless licensed as\nan independent adjuster, and no adjuster shall act on behalf of an\ninsured unless licensed as a public adjuster.\n (4) No insurer, agent or other representative of an insurer shall pay\nany fees or other compensation to any person, firm, association or\ncorporation for acting as an independent adjuster except to a licensed\nindependent adjuster or to a person excepted from the licensing\nrequirement pursuant to subsection (g) of section two thousand one\nhundred one of this article.\n (b) The holder of a license under this section may act as an adjuster\nwithout any other or additional license.\n (c) (1) The superintendent may issue an independent adjuster's license\nor a public adjuster's license to any person, firm, association or\ncorporation, hereinafter designated as licensee, who, or which, is\ntrustworthy and competent to act as an adjuster in such manner as to\nsafeguard the interests of the people of this state and who, or which,\nhas complied with the prerequisites herein prescribed.\n (2) A license issued to a corporation may name as sub-licensees only\nthe officers and directors of such corporation, and a license issued to\na firm or association may name as sub-licensees only the individual\nmembers of such firm or association. Each sub-licensee named as such in\nthe license issued to a firm, association or corporation must be\nqualified to obtain a license as an independent adjuster or as a public\nadjuster, as the case may be, and for each such sub-licensee a fee must\nbe paid at the times and at the rate hereinafter specified. Each such\nsub-licensee shall be authorized, pursuant to such license, to act as an\nindependent adjuster or as a public adjuster, as the case may be, only\non behalf of the licensee.\n (3) Every individual applicant for a license under this section and\nevery proposed sub-licensee shall be eighteen years of age or over at\nthe time of the issuance of such license.\n (d) (1) Before any such license or any renewal thereof shall be issued\nby the superintendent there shall be filed in his office a written\napplication therefor. Such application shall be in the form or forms and\nsupplements and contain information the superintendent prescribes.\n (2) Each person or individual signing such application shall, with\nsuch application, submit to the superintendent fingerprints of his two\nhands recorded in such manner as may be specified by the superintendent\nor his authorized representative. Before approving such application it\nshall be the duty of the superintendent or his authorized representative\nto compare such fingerprints with fingerprints filed with the division\nof criminal justice services. Such fingerprints may also be submitted to\nthe federal bureau of investigation for a national criminal history\nrecord check.\n (3) Except in the case of an application for a license to act as an\nindependent adjuster, such application shall be approved, as to each\nperson or individual so signing the same, by not less than five\nreputable citizens of the community in which such applicant resides or\ntransacts business, each of whom shall certify that he or she has\npersonally known the person or individual for a period of at least five\nyears prior to the filing of such application, that he or she has read\nsuch application and believes each of the statements made therein to be\ntrue, that such person is honest, of good character and competent, and\nnot related or connected to the person so certifying by blood or\nmarriage. The certificate of approval shall be subscribed by such\nreputable citizens and affirmed by them as true under the penalties of\nperjury.\n (e) (1) The superintendent shall, in order to determine the\ntrustworthiness and competency to act as a public adjuster of each\nindividual applicant for such license, and of each proposed\nsub-licensee, except in the case of a renewal license, require every\nsuch individual to take and pass, to the satisfaction of the\nsuperintendent, a personal written examination. No individual shall be\ndeemed qualified to take the examination without having demonstrated by\nevidence satisfactory to the superintendent that (A) the applicant\npossesses a minimum of one year experience in the insurance business,\nwith involvement in sales, underwriting or claims or other experience\nconsidered sufficient by the superintendent, or (B) the applicant\nsuccessfully completed forty hours of formal training in a course,\nprogram of instruction or seminars approved by the superintendent.\n (2) The superintendent may, in his discretion and on such terms as he\nprescribes, dispense with such examination in the case of any individual\napplicant or proposed sub-licensee who shall previously have held a\npublic adjuster's license issued subsequent to January first, nineteen\nhundred thirty-six.\n (f) (1) The superintendent shall, in order to determine the\ntrustworthiness and competency to act as an independent adjuster of each\nindividual applicant for such license, and of each proposed\nsub-licensee, except in the case of a renewal license, require every\nsuch individual to take and pass, to the satisfaction of the\nsuperintendent, a personal written examination. The superintendent may\nprescribe the types of written examinations according to the kind or\nkinds of insurance claims which the applicant is to be licensed to\ninvestigate and adjust.\n (2) Any person who at any time served with the armed forces of the\nUnited States, and who immediately prior to entering such military\nservice had been continuously engaged in bona fide operation in this\nstate as an independent adjuster for a period of five years, may within\none year after the termination of such military service file with the\nsuperintendent an application in such form as he prescribes, and upon\nthe payment of the requisite license fee may be licensed by the\nsuperintendent as an independent adjuster without being required to take\nand pass such examination.\n (3) The superintendent may also, in the superintendent's discretion\nand on such terms the superintendent prescribes, dispense with such\nexamination in the case of any individual applicant or proposed\nsub-licensee who shall previously have held an independent adjuster's\nlicense provided the applicant applies within two years following the\ndate of termination of such license.\n (g) The superintendent may, in his discretion require an applicant for\na license under this section to present evidence, in such form as he\nprescribes, that such applicant has been employed, for a period which he\ndeems reasonable, by an insurer, an independent adjuster or a public\nadjuster, in the performance of duties which in his opinion would\nprovide the applicant with a satisfactory preliminary training for the\nduties and responsibilities which would devolve upon him as a licensee\nunder this section.\n (h) (1) Any person who has had at least five years experience in\nadjusting claims as an employee of an authorized insurer and has made\napplication for a license as an independent adjuster, or any person\nholding a valid estimator's license issued by the commissioner of motor\nvehicles and has made application for a license as an independent\nadjuster within ninety days of the expiration of the estimator's\nlicense, may file with the superintendent, in such form as the\nsuperintendent prescribes, a written application for a temporary permit\nto adjust claims, during the pendency of the application for a license\nas an independent adjuster, as:\n (i) an employee of a licensed independent adjuster; or\n (ii) in the case of an auto body repair estimator, an employee of an\nauthorized insurer or any adjustment bureau or association owned and\nmaintained by insurers to adjust or investigate motor vehicle body\ndamage losses.\n (2) Notwithstanding the requirement of subsection (f) of this section\nthat each individual applicant for an independent adjuster's license or\nsub-license shall take and pass a personal written examination in order\nto satisfy the superintendent as to trustworthiness and competency, the\nsuperintendent may in the superintendent's discretion, if satisfied that\nthe person applying for such temporary permit has in all other respects\nmet the requirements of this section with respect to the licensing of\nindependent adjusters and is qualified by training and experience to\nadjust claims as an employee of a licensed independent adjuster,\nauthorized insurer, or any adjustment bureau or association owned and\nmaintained by insurers to adjust or investigate motor vehicle body\ndamage losses, issue such temporary permit to be effective for such\nperiod of time as the superintendent may specify therein but, in no\nevent, for a period in excess of one hundred twenty days. The\nsuperintendent may summarily suspend or revoke any temporary permit\nissued pursuant to this subsection upon ten days' notice in writing to\nthe permittee of the superintendent's intention to do so, which notice\nshall be given in accordance with the applicable provisions of\nsubsections (a) and (d) of section three hundred four of the financial\nservices law.\n (i) (1) At the time of application for every adjuster's license and\nfor every renewal thereof, there shall be paid to the superintendent by\neach individual applicant and by each proposed sub-licensee a fee of\nfifty dollars for each year or fraction of a year in which a license\nshall be valid; except that amounts paid to the commissioner of motor\nvehicles pursuant to subdivision five of section three hundred\nninety-eight-d of the vehicle and traffic law, by any person who held an\nauto body repair estimator license prior to January first, nineteen\nhundred ninety-six shall be considered by the superintendent.\n (2) No license fee shall be required of any person who served as a\nmember of the armed forces of the United States at any time and who (A)\nshall have been discharged, under conditions other than dishonorable, or\n(B) has a qualifying condition, as defined in section one of the\nveterans' services law, and has received a discharge other than bad\nconduct or dishonorable from such service, or (C) is a discharged LGBT\nveteran, as defined in section one of the veterans' services law, and\nhas received a discharge other than bad conduct or dishonorable from\nsuch service, in a current licensing period, for the duration of such\nperiod.\n (3) A license fee of fifty dollars for each year or fraction of a year\nin which a license shall be valid for an independent adjuster's license\nshall cover any one or more of the various types of independent\nadjusters' licenses issued by the department.\n (4) Every individual applying to take any written examination shall at\nthe time of applying therefor pay to the superintendent, or at the\ndiscretion of the superintendent, directly to any organization that is\nunder contract to provide examination services, an examination fee of an\namount which is the actual documented administrative cost of conducting\nsaid qualifying examination as certified by the superintendent from time\nto time. An examination fee represents an administrative expense and is\nnot refundable. If, however, the applicant or a proposed sub-licensee\nshould withdraw his or its application or the superintendent should deny\nhis or its application before the license applied for is issued, the\nsuperintendent may refund the fee paid by the applicant for the license\napplied for, excepting any examination fees required pursuant to this\nsubsection.\n (j) (1) Every adjuster's license issued pursuant to this section shall\nbe for a term expiring on the thirty-first day of December of even\nnumbered years, and may be renewed for the ensuing two calendar years\nupon the filing of an application in conformity with subsection (d)\nhereof. In the case of a license issued to a new applicant, the\nsuperintendent may issue a license for a term of more than two years,\nprovided however, such term shall not exceed thirty months.\n (2) If an application for a renewal license shall have been filed with\nthe superintendent by December thirty-first of the year of expiration,\nthe license sought to be renewed shall continue in full force and effect\neither until the issuance by the superintendent of the renewal license\napplied for or until five days after the superintendent shall have\nrefused to issue such renewal license and shall have given notice of\nsuch refusal to the applicant and to all proposed sub-licensees named in\nsuch application.\n (3) If such refusal is based on any grounds other than failure to pass\na written examination and if the applicant or any proposed sub-licensee\nshall within thirty days after such notice is given notify the\nsuperintendent of his or its request for a hearing on such refusal, the\nsuperintendent shall within a reasonable time after receipt of such\nnotice grant such a hearing, and he may, in his discretion, reinstate\nsuch license.\n (k) Any firm, association or corporation licensed as an adjuster under\nthis section may at any time make an application to the superintendent\nfor the issuance of a supplemental license authorizing additional\nofficers or directors of such corporation or additional members of such\nfirm or association, as the case may be, to act as sub-licensees, and,\nif the requirements of this section are fully complied with as to each\nof such proposed sub-licensees, the superintendent may thereupon issue\nto such licensee a supplemental license naming such additional person,\nor persons, as sub-licensees.\n (l) (1) No adjuster's license or renewal license, other than an\nindependent adjuster's license, shall be issued to any applicant unless\nthere shall be on file with the superintendent of financial services a\nbond, executed by such applicant and by approved sureties, in the penal\nsum of one thousand dollars conditioned on the faithful performance by\nsuch licensee and by all sub-licensees named in such license, of their\nduties as such adjusters.\n (2) Such bond shall be approved as to form by the attorney general and\nas to sufficiency of security by the superintendent.\n (3) Such bond shall be made to the state of New York and shall\nspecifically authorize recovery by the state of the penal sum provided\ntherein in case the adjuster or any sub-licensee shall have been guilty\nof fraudulent or dishonest practices in connection with the transaction\nof his or its business as such adjuster or shall have been convicted\nunder any of the sections contained in article one hundred fifty of the\npenal law.\n (m) If an application for a license under this section be rejected by\nthe superintendent, he shall forthwith give notice to the applicant, or\nto the licensee, as the case may be.\n (n) Notwithstanding the provisions of this section, the\nsuperintendent, in order to facilitate the settlement of claims under\ninsurance contracts involving widespread property losses arising out of\na conflagration or catastrophe common to all such losses, may issue a\ntemporary permit for a term not exceeding one hundred twenty days to any\nperson, whether he be a resident of this state or a non-resident, to act\nas an independent adjuster on behalf of an authorized insurer or\ninsurers, provided any such insurer shall execute and file in the office\nof the superintendent a written application for the permit in the form\nprescribed by the superintendent, which application shall contain such\ninformation as he may require and shall certify that the person named\ntherein to be designated in the temporary permit is qualified by\nexperience and training to adjust claims arising under insurance\ncontracts issued by any insurer. The superintendent may in his\ndiscretion renew such permit for an additional term or terms as may be\nnecessary to adjust such claims.\n (o) No licensee shall in connection with the transaction of his\nbusiness as an adjuster make any misrepresentation of facts or advise\nany person on questions of law.\n (p) No adjuster shall have any right to compensation from any insured\nfor or on account of services rendered to such insured as a public\nadjuster unless such right to compensation is based upon a written\nmemorandum, signed by the party to be charged, and specifying or clearly\ndefining the amount or extent of such compensation. The superintendent\nshall establish and prescribe regulations:\n (1) to provide for a standard form and terms of said written\nmemorandum for compensation, including the maximum amount to be charged;\n (2) to provide for compliance with article ten-A of the personal\nproperty law relating to door to door sales; however, for the purpose of\nthis section, "door to door sale" in addition to the definition thereof\ncontained in subdivision one of section four hundred twenty-six of the\npersonal property law, shall include any contract entered into by a\npublic adjuster to adjust losses;\n (3) to provide for maintenance of appropriate books and records to be\nmaintained by public adjusters which shall be kept subject to inspection\nand examination by the superintendent; and\n (4) to provide for such other regulations that are deemed necessary by\nthe superintendent for the proper and adequate supervision of public\nadjusters.\n (q) The superintendent may issue a replacement for a currently in\nforce license which has been lost or destroyed. Before such replacement\nlicense shall be issued, there shall be on file in the office of the\nsuperintendent a written application for such replacement license,\naffirming under penalty of perjury that the original license has been\nlost or destroyed, together with a fee of fifteen dollars.\n (r) (1) The following continuing education requirements shall apply to\nresident and non-resident persons licensed as public adjusters.\n (2) Resident and non-resident persons licensed as public adjusters and\nany person previously so licensed whose license was not in effect on the\neffective date of this subsection and who has subsequently been\nrelicensed pursuant to the provisions of this article, shall biennially\nsatisfactorily complete such courses or programs as may be approved by\nthe superintendent, as follows:\n (A) Any person holding a license as a public adjuster shall, during\neach full biennial licensing period, satisfactorily complete courses or\nprograms of instruction or attend seminars as may be approved by the\nsuperintendent equivalent to fifteen credit hours of instruction.\n (B) During the same calendar year biennial licensing period, a\nlicensee may use accumulated continuing education credits to meet the\nrequirements of similar classes of licenses including those authorized\nby subsection (b) of section two thousand one hundred three, section two\nthousand one hundred four, section two thousand one hundred seven of\nthis article with respect to general insurance consultants, and section\ntwo thousand one hundred eight of this article with respect to public\nadjusters.\n (C) Excess credit hours accumulated during any biennial licensing\nperiod shall not carry forward to the next biennial licensing period for\nthat same class of license.\n (3) (A) The courses or programs of instruction successfully completed,\nwhich shall be deemed to meet the superintendent's standards for\ncontinuing education shall be:\n (i) Courses, programs of instruction or seminars, approved as to\nmethod and content by the superintendent, covering portions of the\nprincipal branches of insurance related to the kinds of insurance\ncovered by the public adjusting license, and given by a degree\nconferring college or university whose curriculum is registered with the\nstate education department at the time the person takes the course,\nwhether such course be given as part of such curriculum or separately,\nor by any other institution, association, trade association or insurer,\nwhich maintains equivalent standards of instruction and which shall have\nbeen approved for such purpose by the superintendent.\n (ii) Continuing education as required by the state in which a\nnon-resident licensee resides and maintains an office, provided the\nsuperintendent deems them equivalent to New York continuing education\nrequirements. If the state in which the non-resident licensee resides\nand maintains an office has no continuing education requirements, or the\nsuperintendent does not deem them equivalent, the licensee must satisfy\nNew York continuing education requirements.\n (B) The number of credit hours assigned to each of the courses or\nprograms of instruction set forth in paragraph one of this subsection\nshall be determined by the superintendent.\n (4) A person who teaches any approved course of instruction or who\nlectures at any approved seminar, and who is subject to these continuing\neducation requirements shall be granted the same number of credit hours\nas would be granted to a person taking and successfully completing such\ncourse, seminar or program, provided that such credit hours shall be\ncredited only once per approved course during any biennial licensing\nperiod.\n (5) Every person subject to these continuing education requirements\nshall furnish, in a form satisfactory to the superintendent, written\ncertification attesting to the course or programs of instruction taken\nand successfully completed by such person, and executed by the\nsponsoring organization or its authorizing representative.\n (6) (A) Any person failing to meet applicable continuing education\nrequirements shall not be eligible to renew the license.\n (B) Any person whose license was not renewed shall not be eligible to\nbecome relicensed during the next biennial licensing period until that\nperson has demonstrated to the satisfaction of the superintendent that\ncontinuing education requirements for the last biennial licensing period\nwere met.\n (C) Any person whose license was not renewed pursuant to subparagraph\n(A) of this paragraph, who accumulates sufficient credit hours for the\nprior licensing period to qualify for relicensing in the biennial period\nfollowing such non-renewal, may not apply those same credit hours toward\nthe continuing education requirements for the current biennial licensing\nperiod.\n (7) (A) Any entity eligible to provide continuing education courses,\nprograms of instruction, or seminars shall file for approval by the\nsuperintendent on a biennial basis, to conform with its areas of\ninstruction, a provider organization application and a course submission\napplication for each course, program, and seminar.\n (B) The provider organization application shall include the names of\nall instructors to be used during the contract period, and instructors\nmay be added during the period by notifying the superintendent and\npaying the appropriate filing fee.\n (C) The completed applications shall be returned in a timely manner,\nas specified by the superintendent with a non-refundable filing fee of\ntwo hundred dollars per organization, fifty dollars per course, program,\nand seminar, and fifty dollars per instructor.\n (D) Approval of the application shall be at the discretion of the\nsuperintendent.\n (8) Each licensee shall pay a biennial fee of ten dollars per license,\nfor continuing education certificate filing and recording charges, to\nthe superintendent, or, at the direction of the superintendent, directly\nto an organization under contract to provide continuing education\nadministrative services.\n (s) (1) Every public adjuster shall have an affirmative duty to act on\nbehalf and in the best interests of the insured when negotiating for or\neffecting the settlement of an insurance claim for the insured or\notherwise acting as a public adjuster.\n (2) (A) No public adjuster shall receive any compensation, either\ndirectly or indirectly, for a referral of the insured to an individual\nor entity for services, work or repairs, relating to any insurance claim\nfor which the public adjuster represents the insured or has negotiated\nor effected a settlement, unless the compensation is prominently and\nclearly disclosed to the insured in the written memorandum described in\nsubsection (p) of this section. Any such compensation received shall be\ndeemed to be compensation from the insured and, in combination with any\nother compensation received from the insured, shall not exceed the\nmaximum amount that the adjuster may charge in accordance with the\nregulations required pursuant to subsection (p) of this section.\n (B) No public adjuster who has a financial or ownership interest in\nthe individual or entity that performs the services, work, or repairs,\nshall refer the insured to the individual or entity unless the financial\nor ownership interest is prominently and clearly disclosed to the\ninsured in the written memorandum described in subsection (p) of this\nsection. If a public adjuster refers an insured to an individual who is\nrelated to the individual by blood or affinity to the second degree of\nconsanguinity, or to an entity owned or controlled by such an\nindividual, for services, work, or repairs, relating to any insurance\nclaim for which the public adjuster represents the insured or has\nnegotiated or effected a settlement, then the public adjuster shall\ndisclose the relationship to the insured in the written memorandum\ndescribed in subsection (p) of this section.\n