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

Andrew M. Cuomo
Governor

James J. Wrynn
Superintendent

OGC Op. No. 11-06-01

The Office of General Counsel issued the following opinion on June 15, 2011 representing the position of the New York State Insurance Department.

Re: Independent adjuster license and examination requirement

Question Presented:

If a licensed attorney wants to become a sub-licensee for a corporation that wishes to be licensed as an independent adjuster in New York State, must the attorney take and pass a personal written exam and otherwise qualify as an independent adjuster?

Conclusion:

Yes. If the licensed attorney wants to be a sub-licensee of the corporation, the attorney must qualify as an independent adjuster, which includes taking and passing a personal written examination pursuant to Insurance Law § 2108(f)(1).

Facts:

The inquirer refers to the Insurance Law § 2101(g)(1)(H) exception from independent adjuster licensing for an attorney duly licensed to practice in New York State (hereinafter, "licensed attorney"). We assume that the inquirer proposes that the licensed attorney would be the only sub-licensee designated by the corporation. The inquirer then asks whether the licensed attorney would be exempt from taking the "exam". We further assume that the inquirer is asking whether the corporate independent adjuster may be licensed through the attorney, without the attorney complying with other licensing requirements, which include the attorney taking and passing a personal written examination.

Analysis:

Any person or entity that acts as an independent adjuster in New York State must obtain the appropriate license from the New York State Insurance Department. Insurance Law § 2101(g)(1) defines the term "independent adjuster", in pertinent part, as follows:

(g)(1) [A]ny 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: . . .

(H) any licensed attorney at law of this state . . . .

Insurance Law § 2108 governs licensing requirements for adjusters. Insurance Law § 2108(a)(3) provides that no adjuster may act on behalf of an insurer unless licensed as an independent adjuster.

Further, Insurance Law § 2108(c)(1) and (2), regarding the licensing of adjusters, states as follows:

(1) The superintendent may issue an independent adjuster's license or a public adjuster's license to any person, firm, association or corporation, hereinafter designated as licensee, who, or which, is trustworthy and competent to act as an adjuster in such manner as to safeguard the interests of the people of this state and who, or which, has complied with the prerequisites herein prescribed.

(2) A license issued to a corporation may name as sub-licensees only the officers and directors of such corporation, and a license issued to a firm or association may name as sub-licensees only the individual members of such firm or association. Each sub-licensee named as such in the license issued to a firm, association or corporation must be qualified to obtain a license as an independent adjuster or as a public adjuster, as the case may be, and for each such sub-licensee a fee must be paid at the times and at the rate hereinafter specified. Each such sub-licensee shall be authorized, pursuant to such license, to act as an independent adjuster or as a public adjuster, as the case may be, only on behalf of the licensee.

Only officers and directors of the corporation may be named as sub-licensees, and every corporation must have at least one sub-licensee. The corporation may utilize employees who are not officers or directors to adjust claims so long as each of those employees is individually licensed and is supervised by the sub-licensee. See OGC Opinion No. 06-10-01 (October 4, 2006).

A New York licensed attorney may investigate and adjust losses on behalf of an insurer without obtaining an independent adjuster's license. See OGC Opinion No. 03-04-07 (April 2, 2003). However, if the licensed attorney were to be designated as a sub-licensee of an insurance adjuster, in order for the corporation to be licensed as an independent adjuster, the attorney must nonetheless be licensed as an independent adjuster, which includes taking and passing a personal written examination under Insurance Law § 2108(f)(1). Even though an attorney acting on his own is exempt from having to obtain an independent adjuster license, in order to be a sub-licensee of a corporate independent adjuster and hold himself out as an adjuster, the attorney must obtain an independent adjuster license. See OGC Opinion No. 06-04-06 (April 5, 2006). Similarly, the fact that a licensed attorney is employed as an adjuster by the corporation would not exempt the corporation from the requirement to obtain an independent adjuster's license, since the exemption applies only to the attorney.

For further information, you may contact Senior Attorney Robert Freedman at the New York City office.