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

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on January 3, 2006, representing the position of the New York State Insurance Department.

RE: Independent Adjuster Activities

Questions Presented:

1) May an independent insurance adjuster refer to relevant law and the policy’s terms and conditions in order to analyze the merits of a claim?

2) May an independent adjuster issue a detailed statement to a claimant advising whether the policy will provide coverage, the reason(s) therefor and the amount of coverage (if any)?

Conclusions:

1) An independent insurance adjuster may refer to relevant law and the policy’s terms and conditions in order to analyze the merits of a claim.

2) An independent adjuster may issue a detailed statement to a claimant advising whether the policy will provide coverage, the reason(s) therefor and the amount of coverage (if any).

Facts:

A licensed independent adjuster coordinates investigations and makes determinations about the applicability of coverage on casualty insurance claims. When he determines that coverage is not available, he issues a detailed disclaimer or denial letter to the claimant, which sets forth the relevant facts that are applied to the terms and conditions of the policy, as well as applicable law. The adjuster inquires as to whether these acts may be considered the practice of law.

Analysis:

N.Y. Ins. Law § 2101(g)(1) (McKinney Supp. 2006) states in relevant 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:

The Department considers the acts in which the independent adjuster engages to be within the scope of duties permitted under N.Y. Ins. Law § 2101(g)(1). Hence, the relevant law and the policy’s terms and conditions may be referred to in order to analyze the merits of a claim, and a detailed statement may be issued to a claimant advising whether the policy will provide coverage, the reason(s) therefore, and the amount of coverage (if any).

For further information you may contact Associate Attorney Sally Geisel at the New York City Office.