|George E. Pataki
Gregory V. Serio
The Office of General Counsel issued the following opinion on February 19, 2003, representing the position of the New York State Insurance Department.
RE: Licensed Independent Adjuster Corporation's Advice on Questions of Law.
If an independent adjuster corporation described in N.Y. Ins. Law §§ 2101(g)(1) and 2108 (McKinney 2000) and licensed pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 26.3(g) (2000) (Regulation 25) as Independent adjuster, casualty were to provide the services of one employee who is a licensed New York State attorney to supervise local counsel who represent a self-insurer defendant in various personal injury litigation in jurisdictions other than New York State in the United States, would this activity be permissible under the Insurance Law?
No. N.Y. Ins. Law § 2108(o) (McKinney 2000) states: "No licensee shall in connection with the transaction of his business as an adjuster . . . advise any person on questions of law." In the instant matter the employee attorney is precluded by N.Y. Ins. Law § 2108(o) (McKinney 2000) from acting in the proposed capacity on behalf of the licensed independent adjuster corporation.
An independent adjuster corporation licensed, in part, for casualty claims is a wholly-owned subsidiary of a Japanese insurer which is not licensed by the New York State Insurance Department. We assume that the adjuster is adjusting claims in New York State on behalf of the Japanese insurer. It is not clear if the insurer has designated the Superintendent for receipt of lawful process, as required by N.Y. Ins. Law § 1214 (McKinney 2000). The insurer has provided insurance to a Japanese manufacturer which has covered personal injury claims in jurisdictions other than New York State in the United States. It is proposed that one employee attorney of the licensed independent adjuster corporation supervise local counsel in contexts where the manufacturer does not have insurance coverage and is the defendant in various personal injury litigation in jurisdictions other than New York State in the United States. Thus, for the purpose of this opinion, the manufacturer is a self-insurer.
The employee attorney would: (1) evaluate the complaint and direct the self-insurer manufacturer to provide documents and information to local counsel; (2) evaluate discovery, summarize what local counsel needs from the self-insurer manufacturer, and assist local counsel to be in compliance with the discovery component of the litigation; (3) participate with local counsel in settlement negotiations; and (4) if there were a trial, the employee attorney would provide reports to the self-insurer manufacturer assessing the trial. The self-insurer manufacturer would pay the licensed independent adjuster corporation for the services of the employee attorney.
N.Y. Ins. Law § 2101(g)(1) (McKinney 2000) states:
(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 . . . . (Emphasis added)
The employee attorney's proposed activity does not fit the definition of independent adjuster because there would not be investigating and adjusting claims on behalf of an insurer. The employee attorney would supervise local counsels' representation of a self-insurer defendant in various litigation on behalf of a licensed independent adjuster corporation by providing advice on questions of law. N.Y. Ins. Law § 2108(o) (McKinney 2000) states: "No licensee shall in connection with the transaction of his business as an adjuster . . . advise any person on questions of law." In the instant matter the employee attorney is precluded by N.Y. Ins. Law § 2108(o) (McKinney 2000) from acting in the proposed capacity on behalf of the licensed independent adjuster corporation.
We offer no opinion concerning whether the employee attorney may supervise local counsel in his individual capacity. Moreover, we offer no opinion on any other law or on any issue concerning the employee attorney's ethical obligations.
For further information you may contact Senior Attorney Robert Freedman at the New York City Office.