NAIC Agrees to Changes in Public Adjuster Licensing Model Act

August 6, 2004

Discussions between insurance industry representatives and the National Association of Insurance Commissioners (NAIC) have led to the elimination of a reportedly burdensome provision that was part of the NAIC’s proposed Public Adjuster Licensing Model Act.

During a conference call meeting this week of the subgroup working on the proposed model act, the Property Casualty Insurers Association of America (PCI) and other industry representatives successfully argued their case that insurance companies should not be required to check the licensing of public adjusters or to make checks out to both an adjuster and an insured.

“We were able to convince the subgroup that there is no contractual relationship between public adjusters and the insurance company,” Mike Koziol, assistant vice president and counsel for PCI,” said. According to Koziol, since the only contract that exists is between the public adjuster and the insured, the insurance company should not be burdened with checking to see if the public adjuster is properly licensed. It was also agreed that requiring a company to make checks out in the names of both the insured and a public adjuster was also inappropriate.

“Public adjusters contract with, and work on behalf of the insured – not the insurance company – and we are glad to see this will be spelled out if a final model act is adopted by the NAIC,” Koziol added.

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