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 8, 2002, representing the position of the New York State Insurance Department.

Re: Salaried Employees of Holding Co. Adjusting Claims on Behalf of Insurers

Questions Presented:

1. Is an independent adjuster license required for a salaried employee of an insurer’s holding company that adjusts claims in New York on behalf of insurers that are within the same holding company system?

2. Is an independent adjuster license required for a salaried employee of an insurer’s holding company that adjusts losses in New York equal to or less than $7,500 on behalf of insurers that are within the same holding company system?

Conclusions:

1. Yes, an independent adjuster license is required for a salaried employee of a holding company that adjusts claims in New York on behalf of insurers within the same holding company system. The holding company would also have to be licensed as an independent adjuster.

2. Yes, an independent adjuster license is required for a salaried employee of a holding company that adjusts losses in New York equal to or less than $7,500 on behalf of insurers that are within the same holding company system. The holding company would also have to be licensed as an independent adjuster.

Facts:

No specific facts were given.

Analysis:

N.Y. Ins. Law § 2102(a)(1) (McKinney 2000) 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. Furthermore, N.Y. Ins. Law Section 2108(a)(3) (McKinney 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.

N.Y. Ins. Law § 2101(g) (McKinney 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 a salaried employee applies only to an authorized insurer, not a holding company, and only relates 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 affiliated company adjusts claims on behalf of insurers in the same holding company system. The fact that regular salaried employees are doing the adjusting is inconsequential and does not change the requirement for an adjuster’s license. Moreover, an independent adjuster license is required even when an employee of one insurer adjusts claims for other insurers within the same group of companies. The associated nature of the companies is immaterial to the requirement for a license.

N.Y. Ins. Law § 2101(g)(1)(B)(McKinney 2000) provides an exemption to the requirement for an independent adjuster license for "any adjustment bureau or association owned or maintained by insurers to adjust or investigate losses . . . ." This section expressly gives an exception to two or more insurers that jointly adjust losses by owning or maintaining an adjustment bureau or association, which does not have to be licensed. However, this section does not apply here since the company in question is not an adjustment bureau or association.

The second question concerns whether an independent adjuster license is required when a salaried employee of a holding company adjusts losses equal to or less than $7,500 on behalf of insurers that are within the same holding company system. The amount of the loss is not relevant to the issue of whether an independent adjuster’s license is required, and thus, a license is required since it is the same situation as described above.

Please note that in both situations, the holding company would also have to be licensed as an independent adjuster since its own employees would be doing the adjusting.

For further information, you may contact Senior Attorney Meredith Kaufer at the New York City Office.