An Unprecedented Move: The Insurance Industry Speaks Positively About Public Insurance Adjusters
Mark on your calendar: October 24, 2023, at 2:45 pm CST. This is when the three insurance company trade organizations said something favorable about public insurance adjusters in an Amicus Brief1 filed by Steve Badger on behalf of the American Property Casualty Insurance Association, National Association of Mutual Insurance Companies, and Insurance Council of Texas.
The amicus brief stated in part:
A public insurance adjuster is a legally recognized advocate for the policyholder. Texas insurance companies regularly work cooperatively with public insurance adjusters to bring an amicable and prompt resolution to claims. At times there are disagreements between insurance companies and public insurance adjusters as to the actual scope of damage and cost to repair. But as licensed and regulated professionals, most Texas public insurance adjusters acknowledge and respect their fiduciary role in being able to act as a ‘claim advocate’ for Texas policyholders. They generally behave professionally and responsibly in the insurance claims process.
Amicus Curiae Texas Association of Public Insurance Adjusters (‘TAPIA’) provides a detailed history of how Texas public insurance adjusters became recognized claim advocates subject to regulation and licensing. Most important to this history is the fact that prior to the 2003 enactment of the public adjuster licensing statute set forth at Chapter 4102 of the Texas Insurance Code, public adjusting was considered to be the unauthorized practice of law… Prior to 2003, individuals acting at that time as unregulated public insurance adjusters faced administrative action for engaging in the unauthorized practice of law.
Since the enactment of Chapter 4102 in 2003, public insurance adjusters have enjoyed a narrow carve-out from the regulations concerning the unauthorized practice of law. This carve-out has allowed licensed public insurance adjusters to represent Texas policyholders in the insurance claims process, conduct that otherwise would be considered the practice of law. Without the enactment of Chapter 4102, any public insurance adjuster representing policyholders in the Texas insurance claims process would be engaged in what has been found to constitute the unauthorized practice of law.
This fact is vitally important in considering the effect of the Court’s decision in this matter.
A footnote to the brief provided the following information:
There are now 46 states that regulate public insurance adjusters. Texas was an early state to recognize concerns about public insurance adjusters engaging in the unauthorized practice of law, while acknowledging the need for licensed professionals to assist insureds in the negotiation and adjusting of property damage claims. Public insurance adjuster licensing strikes that balance. A recent article demonstrates the need for this type of licensure and regulation. See More States Adopting Professional Standards for Public Adjusters, Claims Journal, (May 15, 2023)…
The issues have been discussed in Update on the Texas Contractor vs. Unauthorized Practice of Public Adjusting Case, where I stated:
TDI and all departments of insurance have an obligation to protect policyholders and the public. The interpretation of insurance policy terms, benefits that are available, and various legal obligations of policyholders are complex and significant. Many of those issues have nothing to do with the cost of fixing a roof. Having credentialed individuals who are experts in those areas is certainly the business of regulatory bodies, and it is in the public’s interest to prevent those without those credentials from potentially harming the public.
Public adjusting and insurance restoration construction are both very important to the public. The interplay between the two and the role of the regulator is what this case is about.
The brief is an unprecedented move by the insurance industry. I am certain that this statement will take many by surprise—especially those in the realm of public insurance adjusters. For the sake of fairness and balance, it’s important to acknowledge and commend the insurance industry for this rare gesture.
Why is this so significant? Simply put, it’s hard to recall a time when the insurance industry has openly expressed anything positive about the role of public insurance adjusters. This makes the statement not just surprising but a watershed moment worth noting.
Thought For The Day
Fairness is not an attitude. It’s a professional skill that must be developed and exercised.
—Brit Hume
1 Tex. Dept. of Ins. V. Stonewater Roofing, No. 07-21-00016-CV (Tex. [amicus brief filed Oct. 24, 2023]).
