Public Adjuster Coalition Unveils Ethics Code, Plans Complaint Board

A new code for public adjusters that would create a board to put ethics violations in front of state regulators was introduced on Friday.

The Public Adjusting Code of Professional Conduct is being pushed by a coalition of more than 16 public adjusters, insurance attorneys and industry stakeholders.

The code establishes a uniform standard of professional conduct for public adjusters practicing in the U.S. It draws on the 20-year-old NAIC Public Adjuster Licensing Model Act, as well as the ethical framework of the American Bar Association’s Model Rules of Professional Conduct and industry association standards.

Beyond the NAIC’s act that lays out recommendations for how public adjusters should conduct business, the new code adds oversight and clarifies what public adjusters are supposed to do, according to Jeffrey Major, founder and CEO of Skyline Adjusters and member of the Public Adjuster Code of Professional Conduct Coalition.

The coalition, which wrote the new code, was established last year. An oversight board is being assembled.

Related: Why Restricting Public Adjusters Could Send More Claims to Attorneys

“The (NAIC) licensing act doesn’t speak to a public adjuster signing somebody up and not actually working on their claim and flipping it to an attorney that some hedge fund is backing,” Major said.

He said the code also addresses the public understanding of what a public adjuster is supposed to do.

“It defines a proper standard that the public should expect when they hire a public adjuster and it is the highest standard in the industry that public adjusters should strive towards and exceed and meet,” Major said.

The NAIC act was adopted in 2005, but concerns about the profession persisted. For years there have been efforts by numerous state legislatures to address those concerns, including lawmakers in Florida, Georgia, Kentucky, Illinois, and Indiana, which passed bills in 2023 establishing more controls on public adjusters. More recently, efforts to restrict or ban public adjusters have ramped up, with some insurance companies attempting to use “Anti-Public Adjuster” policy endorsements.

News of bad actor public adjusters continues to be pervasive. In May, a Bucks County, Pennsylvania district attorney brought charges against a public adjuster accused of misappropriating $140,000 in insurance claim funds intended for nine victims and their contractors. A Florida public adjuster in April was accused of diverting more than $600,000 in insurance settlements for homeowners hit by Hurricane Ian. That adjuster is already facing prosecution for similar alleged misappropriation in 2024.

Steven Badger, an attorney in the Dallas office of Zelle LLP, who defends insurers, has for years voiced concerns that these bad actors are making it tough for above-board public adjusters.

“There is a role for the professional public adjuster in the claims process. A qualified and honest public adjuster can be of tremendous assistance in measuring a property damage claim,” Badger said. “Unfortunately, there are simply too many crooks and frauds acting as public adjusters.”

Minimal licensing requirements and lax ethical standards have enabled “scammers and grifters to enter the profession,” leaving insurers and regulators to question whether the entire profession should be abolished, he added.

Badger is opposed to eliminating the profession, and he believes that raising the bar for how adjusters conduct themselves and holding them accountable to the public is a better solution. That’s why he is supporting the new code.

“These ethical rules call for higher standards of conduct, providing clarity as to the types of behavior that would cause an unethical public adjuster to lose their license,” he said. “The public adjuster trade organizations, NAIC, and state regulators should all adopt the Public Adjusting Code of Professional Conduct in an effort to return professionalism to the public adjusting profession.”

The number of professionals the new code addresses likely numbers in the tens of thousands. There is no official figure on the exact number of active public adjusters in the U.S., but states that are prone to frequent natural disasters like Florida and Texas hold the largest share of licensees with thousands of these professionals in each state.

The code, which is being offered for adoption by insurance regulators, professional associations and individual practitioners in all U.S. states and jurisdictions, addresses issues like competence, continuing education, supervision, evidence, conflicts of interest, solicitation, client communication and accountability.

Potentially the most potent part of the code is that it creates a place for the public to go and file a complaint.

“We’re hoping that this code prompts action across the industry,” Major said. “We’re hoping that the NAIC as a whole looks at the codes and maybe readdresses or rewrites some of their own codes or expands their codes. We hope that states that have not adopted (the NAIC act) and are looking to have a licensing act for public adjusters adopt these codes or use them in modification to their own state’s case law or regulations. And then we hope that the individual associations start adopting these standards and make them their codes.”

The coalition is now focusing on creating The Public Adjuster Code of Conduct Board. The board already has a chair, Brian Evans, CEO of Eastern Public Adjusters. Evans is an officer of the National Association of Public Insurance Adjusters, and vice president of the New York Public Adjusters Association.

The plan is to create a complaint process that follows attorney ethics review board complaint processes, including a portal for complaints from which the board would make recommendations to state regulators.

“This whole process was influenced by ‘Do we want to regulate ourselves or do we want outsiders to regulate us?’ And the thought was that if we as a whole are to step up and raise the bar ourselves and act according to the codes then there will be less attack against us and we can show regulators or legislators that we are of a higher standard and this is what we are,” Major said. “And I don’t feel like we really were defined properly before.”