New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on April 14, 2000 representing the position of the New York State Insurance Department.

Licensing of Reinsurers as Independent Adjusters

Question Presented:

Is an independent adjuster’s license required when an authorized insurer reinsures another insurer and adjusts claims in this state on behalf of the other insurer?

Conclusion:

Yes, an independent adjuster’s license is required when an authorized insurer reinsures another insurer and adjusts claims in this state on behalf of the other insurer.

Facts:

A representative of several insurance companies requested clarification regarding the definition of independent adjuster in a reinsurance context on a 100% indemnity coinsurance basis.

Analysis:

N.Y. Ins. Law Section 2101(g)(McKinney 1985 & Supp. 1999-2000) states in pertinent part:

(g) In this article, "adjuster" means any "independent adjuster" or "public adjuster" as defined below:

(1) The term "independent adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigating and adjusting claims arising under insurance contracts issued by such insurer and who performs such duties required by such insurer as are incidental to such claims and also includes any person who for compensation or anything of value investigates and adjusts claims on behalf of any independent adjuster, except that such term shall not include:

(A) any officer, director, or regular salaried employee of an authorized insurer, or any manager thereof, individual or corporate, or the manager, agent or general agent of any department thereof, individual or corporate, or attorney in fact of any reciprocal insurer of Lloyds underwriter, or marine underwriting office, unless acting as an auto body repair estimator as defined in subsection (j) of this section;

The licensing exemption for an officer, director, or employee of an authorized insurer outlined above only applies to the adjustment of a claim that is the obligation of that particular authorized insurer. Thus, the exemption is not applicable to situations where an authorized insurer adjusts claims on behalf of other authorized insurers. The fact that the insurer is reinsuring the business that it is adjusting does not change the requirement for an adjuster’s license.

N.Y. Ins. Law Section 2102(a)(1) (McKinney 1985) prohibits any person, firm, association or corporation from acting as an insurance agent, insurance broker, reinsurance intermediary or insurance adjuster in New York without the appropriate license. In addition, N.Y. Ins. Law Section 2108(a)(3) (McKinney 1985 & Supp. 1999-2000) requires that no adjuster shall act on the behalf of an insurer or on behalf of an insured unless he or she is licensed as an independent adjuster.

The exemption to the requirement of N.Y. Ins. Law Section 2101(g) (McKinney 1985 & Supp. 1999-2000) is not applicable the present inquiry, and thus, an independent adjuster license is required.

For further information, you may contact Attorney Meredith Katz of the Department’s New York Office.