National Independent Adjuster Licensing Regulation Slowly Progressing

During a session held at the Property & Liability Resource Bureau’s national conference in Indianapolis last month, Eric Nordman, director of the Regulatory Division at the NAIC, discussed recent regulation related to independent adjuster licensing.

Nordman began by providing an overview of the NAIC, which was originally formed as the National Convention of Insurance Commissioners (NCIC) in 1871. The group works for state insurance regulators and the voting members are the insurance commissioners of each state and territories. The organization acts as a facilitator for gathering insurer financial data, assists in market regulation and develops model laws and guidelines.

According to the NAIC director, the goal of insurance regulations is to make sure companies have sufficient assets to meet obligations and to make sure companies treat policyholders and claimants fairly.

Currently, the U.S. market contains 56 different insurance markets with $1.75 trillion in premium buying.

He said one reason state-based regulation exists is because of a general distrust of centralized power dating back to Colonial days.

Tennessee Congressman Stephen Fincher introduced the Claims Licensing Advancement for Interstate Matters Act (HR 2156) in 2013. The bill’s goal:

“To encourage uniformity and reciprocity among States that license insurance claims adjusters and to facilitate prompt and efficient adjusting of insurance claims in the case of natural and other disasters and losses, and for other purposes.”

The legislation would apply to independent adjusters handling property/casualty, disability and workers’ compensation claims and essentially urges the NAIC to adopt a model independent claims adjuster licensing act.

Besides Fincher, there were 35 bill co-sponsors. It was assigned to a congressional committee for review in May 2013 where it is pending. According to the website, GovTrack.us, which tracks federal legislation, the bill currently has a nine percent chance of getting past committee and a two percent chance of being enacted. The website noted that between 2011 and 2013 only 11 percent of all introduced bills made it past committee with only three percent actually enacted.

Nordman noted that because there are no companion bills in the Senate, the outcome of the legislation is uncertain.

At this time, he said there is no legislation relating to the national licensing of insurance company claims adjusters

Though the NAIC adopted the Public Adjuster Licensing Model Act in 2005, only six states have adopted the national model. According to Nordman, three of the six states – Illinois, North Carolina and Virginia – added their own legislation in addition to adopting the model. Meanwhile, 47 jurisdictions (which include U.S. states and territories and the District of Columbia) do not adhere to the model but have addressed public adjuster licensing with their own requirements.