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 August 31, 2001, representing the position of the New York State Insurance Department.

RE: Corporate Independent Adjuster’s Licensing Requirements.

Question Presented:

Is a non-resident corporation exempt from the independent adjuster’s licensing requirements when it collects premiums and adjusts accident and health claims on behalf of a group health client, an exempt insurer, that has three New York participants?

Conclusion:

No. A person that investigates and adjusts claims in New York on behalf of an exempt insurer that has three New York participants must be licensed as an independent adjuster in accordance with the provisions of N.Y. Ins. Law §§ 2101(g)(1) and 2102(a)(1) (McKinney 2000), in connection with the claims of those participants.

Facts:

The inquirer stated that it is currently negotiating a contract with a group health client, an exempt insurer that is domiciled in another state, but has three New York participants. The inquirer further stated that its company, a non-resident corporation, would provide third party administration services such as collecting premiums and adjusting accident and health claims on behalf of the group health client. The inquirer questioned whether its company is exempt from the independent adjuster’s licensing requirements since the group health client only has three New York participants.

Analysis:

N.Y. Ins. Law § 2101(g)(1) (McKinney 2000) defines the term "independent adjuster" in relevant part as follows:

(g)(1) [A]ny 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 . . .

N.Y. Ins. Law § 2101(g)(1) (McKinney 2000) exempts from the definition of an independent adjuster:

(A) [A]ny 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 or Lloyds underwriter, or marine underwriting office, unless acting as an auto body repair estimator as defined in subsection (j) of this section;

(B) any adjustment bureau or association owned and maintained by insurers to adjust or investigate losses, or any regular salaried employee or manager thereof who devotes substantially all of his time to the business of such bureau or association, unless acting as an auto body repair estimator as defined in subsection (j) of this section;

(C) any licensed agent of an authorized insurer who adjusts losses for such insurer solely under policies issued through his or its agency, provided the agent receives no compensation for such services in excess of fifty dollars per loss adjusted;

(D) any licensed attorney at law of this state;

(E) any average adjuster or adjuster of maritime losses;

(F) any agent or other representative of an insurer authorized to issue life and annuity contracts, provided he receives no compensation for such services.

Moreover, N.Y. Ins. Law § 2102(a)(1) (McKinney 2000) provides in pertinent part that:

(a)(1) No person, firm, association or corporation shall act as an. . . insurance adjuster in this state without having authority to do so by virtue of a license issued and in force pursuant to the provisions of this chapter.

Based upon the limited facts provided, none of the above exemptions are applicable to the inquirer’s situation. Additionally, no exemption exists in the Insurance Law for an independent adjuster that investigates and adjusts claims in New York on behalf of an exempt insurer that only has three New York participants. Although the exempt insurer may be exempt from the licensing requirements of the Insurance Law, there is no comparable exemption for an independent adjuster that investigates and adjusts claims on behalf of such insurer. Nor does the physical location of the inquirer’s corporation matter, since adjusting in New York would include communication with the New York participants by mail, telephone, the internet, etc.

Accordingly, a person that investigates and adjusts claims in New York on behalf of an exempt insurer that has three New York participants must be licensed as an independent adjuster in accordance with the provisions of N.Y. Ins. Law §§ 2101(g)(1) and 2102(a)(1) (McKinney 2000) in connection with the claims of those participants.

For further information, you may contact Attorney Pascale Joasil at the New York City office.