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 informal opinion on January 17, 2006, representing the position of the New York State Insurance Department.

Re: Licensed Insurance Adjuster

Question Presented

Does an "Appraiser Review Program" described below require the firm and/or its employees who perform the "appraisal" functions, to obtain an insurance Appraisers License?

Conclusion

New York State does not have an insurance appraiser license. However, in order to perform many of the activities described below, both the person doing the work and the firm for which the person is doing the work must have an insurance adjuster license pursuant to N.Y. Ins. Law § 2108(a) (McKinney’s Supp. 2006).

Facts

The inquirer’s firm is located in Fort Worth, Texas. The inquirer has established an "Appraisal Review Program" for the inquirer’s insurance clients, some of whom are located in the State of New York. The program includes the following activities: Insurers will forward to the inquirer’s office, estimates of claim payments. The inquirer’s office reviews the claims and the claim payment estimates for accuracy of parts prices, repair procedures and use of alternate parts. If the inquirer’s office finds an error, the inquirer’s office will contact the repair facility directly, discuss the issue and arrive at an agreed amount to cover the cost of the repair. A copy of the revised estimate will be provided to the repair facility and insurer. In the event that an agreement cannot be reached, the inquirer’s office would request a physical inspection of the vehicle by a licensed New York appraiser. The inquirer wanted to know if the inquirer’s company and/or the inquirer’s employees need to obtain an insurance appraisers’ license.

Analysis

New York does not have an insurance appraiser license, but does require licensing for insurance adjusting. N.Y. Ins. Law § 2108(a) (McKinney’s Supp. 2006) prohibits any person, firm, association or corporation from acting as an insurance adjuster without the appropriate license.

N.Y. Ins. Law § 2108(a)(1)-(4) (McKinney’s Supp. 2006) specifically states:

(a)(1) Adjusters shall be licensed as independent adjusters or as public adjusters.

(2) The superintendent may prescribe the types of independent adjusters' licenses according to the kind or kinds of insurance claims which the licensee is to be authorized to investigate and adjust.

(3) No adjuster shall act on behalf of an insurer unless licensed as an independent adjuster, and no adjuster shall act on behalf of an insured unless licensed as a public adjuster.

(4) No insurer, agent or other representative of an insurer shall pay any fees or other compensation to any person, firm, association or corporation for acting as an independent adjuster except to a licensed independent adjuster or to a person excepted from the licensing requirement pursuant to subsection (g) of section two thousand one hundred one of this article.

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

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. .  .

Pursuant to N.Y. Ins. Law § 2101(g)(1) (McKinney’s Supp. 2006), both the inquirer’s firm and each person who adjusts claims in the inquirer’s firm will need to be licensed as an independent adjuster. This is because the inquirer’s firm is doing, by definition, the work of an independent adjuster. The inquirer’s firm, if it finds an error in a claim, contacts the repair facility and reaches a resolution of the claim. In addition, licensing is required even though the inquirer’s office is located in Texas if any parties to the claim that the inquirer is adjusting are located in New York State.

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