The Office of General Counsel issued the following opinion on June 3, 2003, representing the position of the New York State Insurance Department.
Re: Claims Adjustment From Outside New York By Non-Licensee
Question Presented:
Must a person who adjusts a claim for an insurer from outside this state, which claim arose from an automobile policy covering a motor vehicle registered in New York, be licensed as an independent adjuster in New York?
Conclusion:
A person who adjusts a claim for an insurer from outside this state, which claim arose from an automobile policy covering a motor vehicle registered in New York, must be licensed as an independent adjuster in New York unless:
1) the adjuster is excepted from the definition of "independent adjuster," which includes, among other things, a regularly salaried employee of the insurer, pursuant to N.Y. Ins. Law § 2101(g)(1) (McKinney 2000), or
2) all of the adjustment activities are conducted, and transacted with persons who are located, outside New York.
Facts:
A claim attorney for a New York authorized insurer is located in the Florida office of the insurer. The inquiry posed refers to claims "brought by New York insureds under a New York policy which are being handled in Florida because the insured has moved to Florida and is treating with Florida medical providers." The inquiry also refers to claims involving "a Florida insured who is injured while visiting New York and their Florida PIP [Personal Injury Protection] policy is providing benefits in accordance with New York law." The inquirer stated that employees of the insurer handle the claims adjusting, but did not make clear whether they are employees of the actual insurer of the policy being adjusted, or one of the insurers affiliated or subsidiary companies.
Analysis:
N.Y. Ins. Law § 2102(a)(1) (McKinney 2000) states:
No person, firm, association or corporation shall act as an insurance agent, insurance broker, reinsurance intermediary or 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.
N.Y. Ins. Law § 2108(a)(1) (McKinney 2000) states: "Adjusters shall be licensed as independent adjusters or as public adjusters."
N.Y. Ins. Law § 2101(g)(1) defines the term "independent adjuster" and describes those who are excepted from such definitions, as follows:
(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;
(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.
Those who are excepted from the definition of "independent adjuster," which includes, among other things, regularly salaried employees of an insurer, do not have to be licensed as claims adjusters in New York. Please note, however, that this Department has taken the position that the licensing exemption for an authorized insurer only applies to the adjustment of a claim that is the obligation of that particular authorized insurer. Thus, the exception is not applicable to the situation where an employee of one insurer adjusts claims for another insurer within the same group of companies (i.e., an affiliate or subsidiary company).
Apart from the exceptions above-described, an adjusters license is also not required when all of the adjustment activities are conducted, and transacted with persons who are located, outside New York because the adjuster licensing provisions are concerned only with the act of adjusting claims within this state. Bear in mind, however, that the act of adjusting claims within this state includes transactions by mail, phone, or electronic transmission from one located outside New York to one located in New York.
For further information you may contact Associate Attorney Sally Geisel at the New York City Office.