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

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following informal opinion on January 13, 2003, representing the position of the New York State Insurance Department.

Re: Licensing as an independent adjuster

Questions Presented

(1) If an Internet based photography service, under the facts presented, were to provide claim related photos to a regular salaried employee of an authorized insurer, referred to as a "company adjuster" or as a "staff adjuster", must that employee of the insurer who appraises or adjusts losses based upon those claim related photos while acting as auto body repair estimator, as defined by N.Y. Ins. Law § 2101(j) (McKinney 2000), be licensed pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 26.3(f) (2000) (Regulation 25) as an independent adjuster, automobile damage or theft appraisals?

(2) If an Internet based photography service, under the facts presented, were to provide underwriting inspection photos, loss control photos, and claim related photos, must the photographers be licensed as independent adjusters?

Conclusions

(1) Yes. A company adjuster or staff adjuster who acts as an auto body repair estimator, as defined by N.Y. Ins. Law § 2101(j) (McKinney 2000), must be licensed as an independent adjuster under N.Y. Comp. Codes R. & Regs. tit. 11, § 26.3(f) (2000) (Regulation 25).

(2) No. As to underwriting inspection photos, N.Y. Comp. Codes R. & Regs. tit. 11, §§ 67.0-67.11 (1997) (Regulation 79) does not restrict providing photo inspections applicable to underwriting private passenger automobile physical damage insurance to licensees. An insurer may employ any legal entity or person registered as an inspection service with the Insurance Department's Property Bureau to provide such photo inspections. As to loss control photos, the Insurance Law and Insurance Department Regulations promulgated thereunder do not require that a photographer be licensed as an independent adjuster. As to claim related photos, under the facts presented, the Insurance Law and Insurance Department Regulations promulgated thereunder do not require that a photographer be licensed as an independent adjuster because he would only photograph the claim, not adjust the claim.

Facts

The contemplated business is in the process of beta testing (with licensed adjusters) an Internet based photography service which the inquirer would like to make available to some potential New York State insurers for use in connection with underwriting inspection photos, loss control photos, and claim related photos. It is claim related photos which prompted this inquiry to determine whether the persons taking the photos must be licensed as independent adjusters.

The extent of any contacts by photographers with insureds, claimants, or other persons associated with a loss would be restricted to: (1) seeking access to the loss, (2) a statement from the photographer that he is not adjusting the claim, and (3) a limited inquiry to describe the photos if the photos were not self-descriptive. The inquirer indicates that a photographer may make a limited inquiry to a person associated with the claim solely in the context where the photographer cannot describe the location of the loss within the entire insured property. If the "photos only" assignment were to expand into the need for a licensed independent adjuster, the inquirer and the inquirer’s associates have a longstanding relationship with a licensed independent adjuster corporation.

The inquirer provided a succinct description of the process for claims related photos:

The [company] adjuster(s) would go to the website (which is still under construction, but will be ready shortly) and upload a photograph request/assignment. The assignment would be dispatched (via email notification) to a photographer. That person would travel to wherever it is he/she has to go, take the required photo(s), type a brief description of the photo(s) and then upload them to the website. End of assignment.

Analysis

As to underwriting inspection photos, N.Y. Comp. Codes R. & Regs. tit. 11, §§ 67.0-67.11 (1997) (Regulation 79) does not restrict providing photo inspections applicable to underwriting private passenger automobile physical damage insurance to licensees. An insurer may employ any legal entity or person registered as an inspection service with the Insurance Department's Property Bureau to provide such photo inspections. As to loss control photos, the Insurance Law and Insurance Department Regulations promulgated thereunder do not require that a photographer be licensed as an independent adjuster. The focus of this inquiry is whether photographers taking claim related photos, under the facts presented, must be licensed as independent adjusters.

N.Y. Ins. Law § 2102(a)(1) (McKinney 2000) provides that no person, firm, association, or corporation may act as an insurance adjuster in this state without a license. In addition, N.Y. Ins. Law § 2108(a)(3) (McKinney 2000) requires that no adjuster, as defined by N.Y. Ins. Law § 2101(g)(1) (McKinney 2000), shall act on behalf of an insurer unless licensed as an independent adjuster.

N.Y. Ins. Law § 2101(g)(1) (McKinney 2000) defines an independent adjuster:

(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 or Lloyds underwriter, or marine underwriting office, unless acting as an auto body repair estimator as defined in subsection (j) of this section . . . . (Emphasis added)

N.Y. Ins. Law § 2101(j) (McKinney 2002) states:

(j) In this article, "auto body repair estimator" means any officer, director or regular salaried employee of an authorized insurer or of any adjustment bureau or association owned and maintained by insurers, who writes, or who directly supervises the writing of, any motor vehicle body repair estimate in this state, on behalf of such insurer in the work of diagnosing or estimating motor vehicle repair costs or procedures relative to appraising, investigating or adjusting claims for motor vehicle body repair work pursuant to an insurance contract. (Emphasis added)

Thus, an independent adjuster is defined to encompass both investigating and adjusting claims. Moreover, generally a company adjuster, who in this instance would request a photo, does not have to be licensed as an independent adjuster because he is a regular salaried employee of an authorized insurer. However, if a company adjuster acts as an auto body repair estimator he must be licensed pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 26.3(f) (2000) (Regulation 25) as an Independent adjuster, automobile damage or theft appraisals.

In making a determination as to whether or not the proposed activity constitutes investigating and adjusting claims pursuant to N.Y. Ins. Law § 2101(g)(1) (McKinney 2000), an independent adjuster's license is required where the person exercises discretionary authority in investigating and adjusting claims, rather than merely performing ministerial functions which, by definition, do not require judgment. Reviewing and processing claims, authorizing payments, issuing and signing checks, handling inquiries from insureds, evaluating the merits of a loss, and making recommendations to the insurer are all discretionary acts, while data processing is a ministerial act.

Thus, under the facts presented, a photographer taking claim related photos would not have to be licensed as an independent adjuster because the photographer would only photograph the claim, not adjust the claim.

For further information one may contact Senior Attorney Robert Freedman at the New York City Office.