40-5514. Contracts for services; requirements; disclosures; prohibitions.
40-5514
40-5514. Contracts for services; requirements;disclosures; prohibitions.(a) Public adjusters shall ensure that all contracts fortheirservices are in writingand contain the following:
(1) Legible full name of the public adjuster signing the contract;
(2) permanent home state business address and phone number of the publicadjuster;
(3) the public adjuster's license number;
(4) title of "public adjuster contract";
(5) the insured's full name, street address, insurance company name andpolicy number, ifknown or upon notification;
(6) a description of the loss and its location, if applicable;
(7) description of services to be provided to the insured;
(8) signatures of the public adjuster and the insured;
(9) the date the contract was signed by the public adjuster and the date thecontract wassigned by the insured;
(10) attestation language stating that the public adjuster is fully bondedpursuant to thisact; and
(11) full salary, fee, commission, compensation or other considerations thepublicadjuster is to receive for services to be rendered by the public adjuster foror on behalf of theinsured.
(b) The public adjuster contract may specify that the public adjuster shallbe named as aco-payee on an insurer's payment of a claim. If the compensation is based on ashare of theinsurance settlement, the exact percentage shall be specified. Compensationprovisions in apublic adjuster contract shall not be redacted in any copy of the contractprovided to thecommissioner.
(c) If the insurer, not later than 72 hours after the date on which the lossis reported to the insurer, either pays or commits in writing to pay to theinsured the policy limit of the insurancepolicy, the public adjuster shall:
(1) Not receive a commission consisting of a percentage of the total amountpaid by aninsurer to resolve a claim;
(2) inform the insured that the loss recovery amount might not be increasedby the insurer;and
(3) be entitled only to reasonable compensation from the insured for servicesprovided bythe public adjuster on behalf of the insured, based on the time spent on aclaim and expensesincurred by the public adjuster, until the claim is paid or the insuredreceives a writtencommitment to pay from the insurer.
(d) A public adjuster shall provide the insured a written disclosureconcerning any director indirect financial interest that the public adjuster has with any otherparty who is involved inany aspect of the claim, other than the salary, fee, commission or otherconsideration establishedin the written contract with the insured, including, but not limited to, anyownership of, other thanas a minority stockholder, or any compensation expected to be received from,any constructionfirm, salvage firm, building appraisal firm, motor vehicle repair shop or anyother firm thatprovides estimates for work, or that performs any work, in conjunction withdamages caused bythe insured loss on which the public adjuster is engaged. As used in thissubsection, the word"firm" shall include any individual or business entity.
(e) A public adjuster contract may not contain any contract term that:
(1) Allows the public adjuster's percentage fee to be collected when money isdue from aninsurance company, but not paid, or that allows a public adjuster to collectthe entire fee from thefirst check issued by an insurance company, rather than as percentage of eachcheck issued by aninsurance company;
(2) requires the insured to authorize an insurance company to issue a checkonly in thename of the public adjuster;
(3) imposes collection costs or late fees; or
(4) precludes a public adjuster from pursuing civil remedies.
(f) Prior to the signing of the contract the public adjuster shall providethe insured with aseparate disclosure document regarding the claim process that states:
(1) Property insurance policies obligate the insured to present a claim tothe insured'sinsurance company for consideration;
(2) there are three types of adjusters that could be involved in thatprocess, and they are asfollows:
(A) A company adjuster who is an employee of an insurance company, representstheinterest of the insurance company, is paid by the insurance company and willnot charge theinsured a fee;
(B) an independent adjuster who is hired on a contract basis by an insurancecompany torepresent the insurance company's interest in the settlement of the claim, whois paid by theinsured's insurance company and will not charge the insured a fee; or
(C) a public adjuster who does not work for any insurance company but worksfor aninsured to assist in the preparation, presentation and settlement of a claim.An insured engages apublic adjuster by signing a contract agreeing to pay the public adjuster afee or commissionbased on a percentage of the settlement, or other method of compensation;
(3) the insured is not required to hire a public adjuster to help the insuredmeet the insured's obligations under the policy, but has the right to do so;
(4) the insured has the right to initiate direct communications with theinsured's attorney,the insurer, the insurer's adjuster and the insurer's attorney, or any otherperson regarding thesettlement of the insured's claim;
(5) the public adjuster is not a representative or employee of the insurer;
(6) the salary, fee, commission or other consideration is the obligation ofthe insured, notthe insurer.
(g) The contracts shall be executed in duplicate to provide an originalcontract to thepublic adjuster and an original contract to the insured. The public adjuster'soriginal contractshall be available at all times for inspection without notice by thecommissioner.
(h) The public adjuster shall provide the insurer a notification letter,which has beensigned by the insured, authorizing the public adjuster to represent theinsured's interest.
(i) The insured has the right to rescind the public adjuster contract withinthree businessdays after the date the contract was signed. The rescission shall be in writingand mailed ordelivered to the public adjuster at the address in the contract within thethree business day period.
(j) If the insured exercises the right to rescind the contract, anything ofvalue given by theinsured under the contract will be returned to the insured within 15 businessdays following thereceipt by the public adjuster of the rescission notice.
History: L. 2009, ch. 83, § 14; Apr. 23.