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 opinion on June 9, 2004 representing the position of the New York State Insurance Department.

Re: Public Adjusters

Questions Presented

1. May a public adjuster adjust automobile property claims?

2. May a public adjuster adjust an automobile property liability claim?

3. May a public adjuster also work as an independent adjuster?

Conclusions

1. No, N.Y. Ins. Law § 2101(g)(2) (McKinney’s 2000), which defines "public adjuster", does not include automobile property claims within the scope of permissible activities of a public adjuster.

2. No, N.Y. Ins. Law § 2101(g)(2) (McKinney’s 2000), which defines "public adjuster", does not include automobile property liability claims within the scope of permissible activities of a public adjuster.

3. The Insurance Law does not prohibit an individual from being licensed as both a public adjuster and an independent adjuster; however, care should be taken to avoid situations that constitute a conflict of interest because the underlying actions of such situations may demonstrate untrustworthiness within the meaning of N.Y. Ins. Law § 2110(a)(4)(C) (Ch. 687 of the Laws of 2003) that would result in disciplinary action against the licensee.

Facts

The inquirer states that the inquirer is a public adjuster who is considering starting a public adjuster business. The inquirer wants to know if the New York Insurance Law prohibits a public adjuster from adjusting automobile property claims, specifically, whether a public adjuster may negotiate the loss with an automobile repair shop, and, if this is allowed, may a public adjuster represent insureds on liability claims. The inquirer also asked whether a public adjuster may work as an independent adjuster.

Analysis

N.Y. Ins. Law § 2101(g)(2) (McKinney’s 2000) states in pertinent part:

"Public adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts or aids in any manner on behalf of an insured in negotiating for, or effecting, the settlement of a claim or claims for loss or damage to property of the insured in this state caused by, or resulting from, any of the risks as enumerated in paragraphs four, five, six, seven, eight, nine and ten and subparagraphs (B) and (C) of paragraph twenty of subsection (a) of section one thousand one hundred thirteen of this chapter, not including loss or damage to persons under subparagraph (B) of paragraph twenty of subsection (a) of such section or who, or which, advertises for, or solicits employment as an adjuster of such claims, and shall also include any person who, for money, commission or any other thing of value, solicits, investigates, or adjusts such claims on behalf of any such public adjuster…1

The above definition of public adjuster does not include adjusting automobile property claims; negotiating loss with an automobile repair shop; or representing insureds on liability claims; therefore, it is not within the scope of a public adjuster’s license to do so. Previously, the Department has opined that ". . . any individual who adjusts claims outside the scope of the statute may well be practicing law without a license. Moreover, if a licensee of the Department were found guilty of such a violation the Department would consider taking appropriate disciplinary action, which might result in license revocation." (Office of General Counsel Opinion, September 10, 1996, citing Gross v. Reliance Ins. Co. of New York, 462 N.Y.S.2d 776, 778 (Sup. 1983) ("…negotiation, adjustment and collection of claims or demands based upon an insurance loss constitutes the practice of law and, but for certain exceptions authorized by statute, should be conducted by attorneys at law and if not, would constitute the unlawful practice of law.")

The Insurance Law does not prohibit an individual from being licensed as both a public adjuster and an independent adjuster; however, care should be taken to avoid situations that constitute a conflict of interest because the underlying actions of such situations may demonstrate untrustworthiness within the meaning of N.Y. Ins. Law § 2110(a)(4)(C) (Ch. 687 of the Laws of 2003) that would result in disciplinary action against the licensee.

For further information one may contact Senior Attorney Susan Dess at the New York City Office.


1 N.Y. Ins. Law § 1113(a)(4) (McKinney’s Supp. 2004) defines "[f]ire insurance"; N.Y. Ins. Law § 1113(a)(5) (McKinney’s Supp. 2004) defines "[m]iscellaneous property insurance"; N.Y. Ins. Law § 1113(a)(6) (McKinney’s Supp. 2004) defines "[w]ater damage insurance"; N.Y. Ins. Law § 1113(a)(7) (McKinney’s Supp. 2004) defines "[b]urglary and theft insurance"; N.Y. Ins. Law § 1113(a)(8) (McKinney’s Supp. 2004) defines "[g]lass insurance"; N.Y. Ins. Law § 1113(a)(9) (McKinney’s Supp. 2004) defines "[b]oiler and machinery insurance"; N.Y. Ins. Law § 1113(a)(10) (McKinney’s Supp. 2004) defines "[e]levator insurance"; and N.Y. Ins. Law § 1113(a)(20)(B) (McKinney’s Supp. 2004) and N.Y. Ins. Law § 1113(20)(C) (McKinney’s Supp. 2004) define certain types of "[m]arine and inland marine insurance".