The Office of General Counsel issued the following opinion on June 16, 2005, representing the position of the New York State Insurance Department.
Re: Exemption from independent adjuster definition applicable to an adjustment bureau
Question Presented
Does N.Y. Ins. Law § 2101(g)(1)(D) (McKinney Supp. 2005) exempt an adjustment bureau from the requirement of an independent adjuster's license if the adjustment bureau is owned by one authorized insurer?
Conclusion
No. N.Y. Ins. Law § 2101(g)(1)(D) (McKinney Supp. 2005) does not exempt an adjustment bureau from the requirement of an independent adjuster's license if it is not owned by two or more insurers.
Facts
The inquirer represents an adjustment bureau that is a licensed independent adjuster corporation owned by one authorized insurer. The focus of the inquiry by the licensed independent adjuster corporation is whether there is an exemption to independent adjuster licensing as an adjustment bureau applicable to the adjusting done for the one authorized insurer.
Analysis
N.Y. Ins. Law § 2102(a)(1) (McKinney Supp. 2005), among other things, prohibits any person, firm, association or corporation from acting as an insurance adjuster in New York State without the appropriate license. In addition, N.Y. Ins. Law § 2108(a)(3) (McKinney Supp. 2005) requires that no adjuster shall act on behalf of an insurer or on behalf of an insured unless licensed as an adjuster.
N.Y. Ins. Law § 2101(g)(1)(D) (McKinney Supp. 2005) states in relevant part:
(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: . . .
(D) 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 . . . .
The Insurance Department has consistently held that the exemption provided by N.Y. Ins. Law § 2101(g)(1)(D) (McKinney Supp. 2005) to the licensing requirements of N.Y. Ins. Law §§ 2102(a)(1) and 2108(a)(3) (McKinney Supp. 2005) requires that the adjustment bureau be owned by two or more insurers and applies only with respect to the claims of such insurers. Under the facts presented the licensed independent adjuster corporation is owned by one authorized insurer. Therefore, the exemption provided by N.Y. Ins. Law § 2101(g)(1)(D) (McKinney Supp. 2005) to the licensing requirements of N.Y. Ins. Law §§ 2102(a)(1) and 2108a)(3) (McKinney Supp. 2005) does not apply to the licensed independent adjuster corporation.
For further information one may contact Senior Attorney Robert Freedman at the New York City Office.