230-RICR-20-50-4
230-RICR-20-50-4. Insurance Claim Adjusters (version Amendment, 01/01/2015 to 01/01/2015)
State of Rhode Island and Providence Plantations
DEPARTMENT OF BUSINESS REGULATION
Division of Insurance
1511 Pontiac Avenue, Bldg. 69-2
Cranston, Rhode Island 02920
CONCISE EXPLANATORY STATEMENT
Insurance Regulation 43 – Insurance Claim Adjusters
The Department of Business Regulation (“Department”) hereby adopts amendments to
Insurance Regulation 43 effective January 1, 2015 and makes this statement in
accordance with R.I. Gen. Laws § 42-35-2.3. The Department makes these amendments
in order to bring the regulation into compliance with the statutory changes made in the
last legislative session and effective January 1, 2015. There are three differences between
the text of the proposed rule as published in accordance with R.I. Gen. Laws § 42-35-3
and the rule as adopted. Those differences are:
1.
In response to comments, the Department has removed the word “only”
from section 4(E) and has added the phrase “but not limited to.”
2.
In response to comments the Department removed the proposal to delete
the first line of section 11(C). This is done only to provide additional time
for investigation and comment by interested parties. Depending upon the
information obtained, the Department intends to propose amendments to
the regulation in the immediate future to address this issue.
3.
References in sections 11(R) and 11(S) have been changed to section 11
from section 10.
The Department received other comment which it declined to address by changes in the
regulation. That comment was as follows:
1.
A commenter suggested extending emergency adjusting to public
adjusters. That suggestion would violate the statute which provides in 27-
10-8 “public adjusters are not eligible for licensing under this section.”
Dated – December 10, 2014
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Reg. # 43
State of Rhode Island and Providence Plantations
DEPARTMENT OF BUSINESS REGULATION
Division of Insurance
1511 Pontiac Avenue Cranston, RI 02920
INSURANCE REGULATION 43
INSURANCE CLAIM ADJUSTERS
Table of Contents
Section 1
Authority
Section 2
Purpose and Applicability
Section 3
Definitions
Section 4
License Required
Section 5
Licensing Procedures
Section 6
Emergency Licenses
Section 7
Examination
Section 8
Exemptions from Examination
Section 9
Conduct – All Adjusters
Section 10
Conduct – Company and Independent Adjusters
Section 11
Conduct - Public Adjusters
Section 12
License Denial, Non-Renewal or Revocation
Section 13
Reporting of Actions
Section 14
Severability
Section 15
Effective Date
Section 1
Authority
This Regulation is promulgated pursuant to R.I. Gen. Laws §§ 27-10-1 et seq and
42-14-17.
Section 2
Purpose and Applicability
This Regulation shall apply to all persons who engage for compensation in
investigating, negotiating or settling property & casualty or workers compensation
insurance claims. Unlicensed persons may not advertise, hold themselves out as or solicit
the adjustment of insurance claims. This includes company adjusters, independent
adjusters and public adjusters.
The purpose of this Regulation is to establish standards and procedures for the
issuance of insurance claim adjuster licenses and to govern the conduct of insurance
claim adjusters.
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Section 3
Definitions
As used in this Regulation:
(A)
"Aftermarket Part" means a motor vehicle body replacement part that is not an
original equipment manufacturer part
(B)
"Applicant" shall mean a Person filing an application for a Rhode Island
insurance claims adjuster license.
(C)
“Catastrophic disaster” according to the Federal Response Plan, means an event
that results in large numbers of deaths or injuries; causes extensive damage or
destruction of facilities that provide and sustain human needs; produces an
overwhelming demand on state and local response resources and mechanisms;
causes a severe long-term effect on general economic activity; and severely
affects state, local and private sector capabilities to begin and sustain response
activities. A catastrophic disaster shall be declared by the President of the United
States, the Governor of Rhode Island or the Insurance Commissioner of Rhode
Island.
(D)
“Company adjuster” means an insurance adjuster who is an employee of an
insurance company.
(E)
"Damaged Motor Vehicle Body Part" means any part of the body of a motor
vehicle which is damaged as the result of a collision with another vehicle or
object. Such parts shall include fenders, bumpers, windshields, glass and similar
components of motor vehicle bodies as distinguished from the chassis, seats,
motor, transmission, air conditioning condenser, radiator, and other accessories
for propulsion and general running gear of motor vehicles.
(F)
“Department” means the Department of Business Regulation and the Division of
Insurance thereof.
(G)
“Emergency Adjuster” means a person who is authorized by the Department to
perform adjusting activities in Rhode Island in the event of an emergency,
catastrophe or state of disaster declared in Rhode Island pursuant to R.I. Gen.
Laws § 27-10-8.
(H)
“Home state” means the District of Columbia and any state or territory of the
United States in which the adjuster maintains his or her principal place of
residence or principal place of business is located. If neither the state in which the
adjuster maintains the principal place of residence nor the state in which the
adjuster maintains the principal place of business has a substantially similar law
governing adjusters, the adjuster may declare another state in which it becomes
licensed and acts as an adjuster to be the ‘home state.’
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(I)
“Independent adjuster” means an insurance adjuster who is hired on a contract
basis by an insurance company to represent the insurance company’s interest in
the settlement of the claim.
(J)
“License” shall mean the insurance adjuster license issued by the Department to a
Person engaged in the business of insurance claims adjusting.
(K)
"Licensee" shall mean a Person holding an Insurance Adjuster License.
(L)
“NAIC” shall mean the National Association of Insurance Commissioners.
(M)
“NIPR” means National Insurance Producer Registry.
(N)
"Original Equipment Manufacturer Part" or "OEM part" means a motor vehicle
body replacement part manufactured by the manufacturer of the motor vehicle
being repaired.
(O)
“Public adjuster” means any person who, for compensation or any other thing of
value on behalf of the insured:
(1)
Acts or aids, solely in relation to first party claims arising under insurance
contracts, other than automobile, life, accident & health, that insure the
real or personal property of the insured, on behalf of an insured in
negotiating for, or effecting the settlement of, a claim for loss or damage
covered by an insurance contract;
(2)
Advertises for employment as an public adjuster of insurance claims or
solicits business or represents himself or herself to the public as an public
adjuster of first party insurance claims for losses or damages arising out of
policies of insurance that insure real or personal property; or
(3)
Directly or indirectly solicits business, investigates or adjusts losses, or
advises an insured about first party claims for losses or damages arising
out of policies of insurance that insure real or personal property for
another person engaged in the business of adjusting losses or damages
covered by an insurance policy, for the insured.
(P)
“Resident” means a person who either resides in Rhode Island or maintains an
office in Rhode Island where the business of producing insurance is transacted
and designated Rhode Island as the residence for purposes of licensure.
(Q)
“Uniform individual application” means the current version of the NAIC Uniform
Individual Application for resident and nonresident individuals.
(R)
“Uniform business entity application” means the current version of the NAIC
Uniform Business Entity Application for resident business entities.
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Section 4
License Required
(A)
A person shall not act or hold him/her or itself out as an adjuster in this state
unless the person is licensed as an adjuster by the State of Rhode Island.
Application for an individual person shall be made using the Uniform Individual
Application as modified and provided by the Department.
(B)
The Department may issue business entity licenses to residents on a discretionary
basis. Application shall be made using the Uniform Business Entity Application
as modified and provided by the Department. A business entity license is not
required. All persons associated with a business entity performing adjuster
services must hold a valid individual license. Before approving the application
for a business entity license, the department shall find that:
(1)
The business entity is a resident of the State of Rhode Island;
(2)
The business entity has paid the applicable fees; and
(3)
The business entity has designated a licensed adjuster responsible for the
business entity’s compliance with the insurance laws, rules and regulations
of this state.
(C)
An insurance adjuster doing business under any name other than the adjusters’
legal name is required to notify and obtain the consent of the Department prior to
using the assumed name.
(D)
Each adjuster license is issued on a biennial basis. An adjuster who obtains a
license during the license term shall be issued a license for the time period
remaining and will have to renew at the expiration of the License, regardless of
the period of time he, she or it has been licensed. The Department does not
prorate license fees.
(E)
A license as an adjuster shall not be required of the following:
(1)
An attorney-at-law admitted to practice in this state, when acting in his or
her professional capacity as an attorney;
(2)
A person who negotiates or settles claims arising under a life or health
insurance policy or an annuity contract;
(3)
An insurance producer licensed by the Department, when the insurance
producer adjusts, or assists in the adjustment of claims arising only under
policies of insurance or fidelity or surety bonds negotiated, solicited, or
effected by him or her or by the insurance producer, whether the insurance
producer is a person, partnership, or corporation, for which he or she acts;
(4)
A person employed for the purpose of obtaining facts surrounding a loss
or furnishing technical assistance to a licensed adjuster, including but not
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limited to photographers, estimators, private investigators, engineers, and
handwriting experts;
(5)
An individual who is employed to investigate suspected fraudulent
insurance claims but who does not adjust losses or determine claims
payments;
(6)
A person who solely performs executive, administrative, managerial, or
clerical duties, or any combination thereof, and who does not investigate,
negotiate, or settle claims with policyholders, claimants, or their legal
representative;
(7)
A licensed health care provider or its employee who provides managed
care services as long as the services do not include the determination of
compensability;
(8)
A managed care organization or any of its employees or an employee of
any organization providing managed care services so long as the services
do not include the determination of compensability;
(9)
A person who settles only reinsurance or subrogation claims;
(10)
A person who investigates, negotiates, or settles life, accident and health,
annuity, or disability insurance claims;
(11)
An individual employee, under a self-insured arrangement, who adjusts
claims on behalf of their employer;
(12)
A person authorized to adjust workers' compensation or disability claims
under the authority of a third-party administrator (TPA) license pursuant
to chapter 20.7 of title 27; and
(13)
A person who adjusts claims for portable electronic insurance offered
pursuant to chapter 2.7 of title 27.
(F)
A licensed adjuster that is unable to comply with license renewal procedures due
to military service or some other extenuating circumstance(e.g., a long-term
medical disability) may request a waiver of those procedures. The adjuster may
also request a waiver of any examination requirement, fine, or other sanction
imposed for failure to comply with renewal procedures.
Section 5
Licensing Procedures
(A)
The Department may contract with non-governmental entities, including the
NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any
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ministerial functions, including the collection of fees and data, related to licensing
that the Department may deem appropriate.
(B)
Applications for adjuster licenses must be made electronically through NIPR. If
this requirement would cause a hardship for any individual (s)he should contact
the insurance division and request permission to apply by hard copy application.
Permission shall be granted to such persons unless a compelling reason requires
otherwise.
(C)
Company and independent adjusters shall specify the lines of authority requested
at the time of the application;
(D)
At the time of application the applicant shall pay all fees. Failure to pay fees shall
be grounds for revocation of the license.
Section 6
Emergency Licenses
(A)
Emergency company and independent adjuster licenses may be issued if the
requirements of R.I. Gen. Laws § 27-10-8 and this regulation are met. Public
adjusters are not eligible for emergency licensing.
(B)
Pursuant to R.I. Gen. Laws § 27-10-8, the Department may permit an experienced
adjuster to act as a company or independent adjuster in this state on homeowners'
losses if the adjuster is either a licensed adjuster in another state which requires a
license or regularly adjusts in another state where such licensing is not required
and works for an insurance company authorized to do business in Rhode Island.
(C)
Those persons issued an emergency license may only engage in adjustment work
during the period determined by the Department.
(D)
In order to obtain an emergency adjuster license the individual shall complete an
application for an emergency adjuster license in NIPR within five (5) days of
deployment to adjust claims arising from the declared catastrophe. No fee will be
assessed by the State, however, the applicant will be required to pay any fees
imposed by NIPR for services provided.
(E)
Emergency licenses shall remain in force for a period specified by the Department
not to exceed ninety (90) days, unless extended by the Department.
(F)
Any person licensed as an emergency adjuster must comply with all laws of this
state and both (s)he and the insurer for whom the claim is adjusted are responsible
in the same manner as they would be if the adjuster was a fully licensed adjuster.
Section 7
Examination
(A)
An individual applying for an adjuster license shall pass a written examination
unless exempt pursuant to Sections 5 and 7 of this Regulation. The examination
shall test the knowledge of the individual concerning the duties and
responsibilities of an adjuster and the insurance laws and regulations of this state.
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(B)
The Department may make arrangements, including contracting with an outside
testing service, for administering examinations and collecting the nonrefundable
fee for said examinations.
(C)
An individual who fails to appear for the examination as scheduled or fails to pass
the examination, shall register for another examination and is required to pay the
fees and complete the necessary forms before being rescheduled for another
examination.
Section 8
Exemptions from Examination
(A)
A person who applies for an adjuster license in this state who holds an active
license as a resident adjuster in another state shall not be required to complete any
examination. An adjuster that is exempted from examination is required to be
knowledgeable of Rhode Island law applicable to adjusters and is required to
comply with all such statutes and regulations. This exemption is only available if
the person is currently licensed if the resident or designated home state certifies
that, the applicant is in good standing in that state or the state's database records
or those records maintained by the NAIC, its affiliates or subsidiaries, indicate
that the adjuster is licensed in good standing.
(B)
A person that currently holds a nonresident adjuster license and moves to this
state shall make application within ninety (90) days of establishing legal residence
to become a resident adjuster. No examination shall be required of that person to
obtain an adjusters license, but the adjuster shall be required to certify knowledge
of Rhode Island law applicable to adjusters.
(C)
An adjuster who allows his, her or its license to expire may, within twelve (12)
months from the due date of the renewal, reinstate this license without the
necessity of passing a written examination. A reinstatement fee is required along
with the unpaid renewal fee which shall be paid at the time of reinstatement. This
exemption is only available if the application is received within twelve (12)
months of the due date and the Applicant was in good standing in the state of
residence or the state’s database records or those records maintained by the NAIC
at the time of renewal. The Applicant is required to file a reinstatement
application, and pay all applicable fees.
Section 9
Conduct – All Adjusters
All adjusters must comply with the following:
(A)
Any licensee shall immediately notify the Department by any means acceptable to
the Department if any action is taken by another state against his or her adjuster
license in that state.
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(B)
The licensee shall inform the Department by any means acceptable to the
Department of a change of address, change of legal name, or change of
information submitted on the application within thirty (30) days of the change.
(C)
A person shall not accept a commission, service fee or other valuable
consideration for investigating or settling insurance claims in this state if that
person is required to be licensed under R.I. Gen. Laws §§ 27-10-1 et seq. and is
not so licensed.
(D)
Records shall be maintained for at least five (5) years after the termination of the
transaction and shall be open to examination by the Department at all times.
(E)
Every adjuster, upon receipt of any written inquiry (including electronic
communications) from the Department, shall within 21 calendar days of receipt of
such inquiry, furnish the Department with a response to the inquiry in duplicate.
(F)
No adjuster may represent or act as a public adjuster, company adjuster, or
independent adjuster on the same claim.
Section 10
Conduct – Company and Independent Adjusters
In addition to the requirements of Section 9 above, all Company and Independent
Adjusters must also comply with the following:
(A)
An adjuster shall promptly inform an insured or claimant of his or her free choice
in the selection of an auto body repair shop. Once the insured or claimant has
advised the insurer that an auto body repair shop has been selected, the adjuster
may not recommend that a different auto body repair shop be selected to repair
the automobile.
(B)
No adjuster shall request or advise any motor vehicle owner or operator to operate
his or her vehicle on any public thoroughfare for the purpose of obtaining a
written estimate of damage at a drive-in claims center, unless it ascertained that
the vehicle meets safety requirements as determined by the department of
transportation. A vehicle is unsafe for driving under this section if the vehicle has
(1) damage to its unitized body construction (2) damage to its hood catch which
would probably result in an unexpected opening (3) damage to the front
suspension (4) metal in contact with any tire (5) any door which can’t be easily
opened or which opens unexpectedly (6) inoperable tail lights (7) broken glass
affixed to the vehicle or a cracked windshield or (8) any other condition deemed
to be unsafe by the department of transportation pursuant to rules and regulations.
(C)
Whenever an appraisal is written on behalf of an insurer, an adjuster shall
assure that the appraisal contains the name of the insurance company
ordering it, the insurance file number, the number of the appraiser's
license, the proper identification number of the vehicle being inspected, a
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clear indication of all damage unrelated to the incident or accident that
occasioned the appraisal of the vehicle, or old damage, and notice in
boldface type, reading as follows:
PURSUANT TO RHODE ISLAND LAW, THE CONSUMER HAS
THE RIGHT TO CHOOSE THE REPAIR FACILITY TO
COMPLETE REPAIRS TO A MOTOR VEHICLE; AND AN
INSURANCE COMPANY MAY NOT INTERFERE WITH THE
CONSUMER'S CHOICE OF REPAIRER.
(D)
An adjuster adjusting a claim for motor vehicle physical damage shall notify the
claimant in writing if he or she intends to specify the use of aftermarket parts. To
comply with this provision written notice may be provided on the original
appraisal of the damaged vehicle.
(E)
For any automobile which is less than thirty (30) months beyond the date of
manufacturer, the adjuster must provide, or assure that the insurer has provided,
written notice to the vehicle owner that: (i) he or she may require the insurer to
pay for and the auto body shop to install "original equipment manufacturer parts "
or "OEM parts" in the repair of a motor vehicle body replacement; or (ii) he or
she may require the insurer to pay for and the auto body shop to install "non-
original equipment manufacturer parts" (non-"OEM parts") in the repair of a
motor vehicle body replacement. To comply with this provision, written notice
may be provided on the appraisal written on behalf of the insurer.
(F)
An adjuster shall not require the use of aftermarket parts when negotiating repairs
of vehicles which are less than thirty (30) months beyond the date of manufacture,
unless written consent from the vehicle owner to install aftermarket parts has been
obtained.
(G)
Whenever aftermarket parts are used for repairs to physically damaged motor
vehicles, the following standards shall apply:
(1)
The aftermarket parts shall be at least equal in kind and quality to the
OEM parts in terms of fit, quality and performance;
(2)
To the extent practical, an insurance company shall not require the use of
multiple aftermarket parts distributors to provide parts for a single repair;
(3)
Insurers specifying the use of aftermarket parts shall make allowances for
the reasonable cost of any modifications to the aftermarket parts which
may become necessary when making the repair, and for the cost of fitting,
removing, and/or handling aftermarket parts which do not result in the
vehicle being repaired to its condition prior to the loss;
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(4)
If the aftermarket part specified by the insurer does not result in the
vehicle being repaired to its condition prior to the loss, the insurer shall
then specify the use of an OEM part;
(5)
The automobile body shop shall promptly notify the appraiser if the
aftermarket part specified by the insurer does not result in the vehicle
being repaired to its condition prior to the loss and permit the appraiser to
reinspect the vehicle and make appropriate supplemental authorizations, if
necessary;
(6)
The automobile body shop shall provide documentation of aftermarket
parts, which do not meet the requirements of this section, as reasonably
requested by the insurer. The insurer shall be permitted to exercise any
available rights of recovery against the aftermarket parts distributor.
(H)
An adjuster shall not require that any insured or claimant use a particular rental
car agency. In accordance with R.I. Gen. Laws § 27-9.1-4(17) adjusters are not
precluded from providing the name(s) of Rhode Island licensed rental car
agencies with which arrangements have been made with respect to rental services.
(I)
An adjuster shall not refuse to honor a ‘direction to pay” executed by an insured
or claimant to pay directly his or her motor vehicle replacement benefit, provided
the rental agency is licensed in Rhode Island. In accordance with R.I. Gen. Laws
§ 27-9.1-4(18) the adjuster may question or challenge the amount charged in
accordance with its policy.
(J)
(a)
If the claimant or insured has elected to have a vehicle repaired at an auto
body shop of the claimant or insureds choice, the adjuster may not:
(1)
Modify any published manual (i.e. motors, mitchells, or any
automated appraisal system) relating to auto body repair unless
there is prior agreement between the insurer and the owner of the
vehicle to do so. The owner of the vehicle may delegate the ability
to agree to modifications to an auto body repairer in writing.
(2)
Refuse to include in the adjustment of the claim documented
charges as identified through industry recognized software
programs or systems for paint and refinishing materials in auto
body repair claims;
(3)
Fail to use a manual or system in its entirety in the adjustment of
the claim;
(4)
Limit or discount the reasonable repair costs based upon the
charges that would have been incurred had the vehicle been
repaired by the insurer's chosen shop(s).
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(b)
Subsection J(a) does not apply to direct repair programs where an insurer
and body shop have entered into a contract.
(K)
Where applicable, adjusters shall comply with the requirements of R.I. Gen. Laws
§ 31-46-1.1 regarding the classification of salvage vehicles.
(L)
Where applicable, adjusters shall comply with the provisions of the Child Support
Interception Act pursuant to R.I. Gen. Laws § 27-57-1 et seq.
(M))
A licensed adjuster is subject to all applicable statutes including but not limited to
R.I. Gen. Laws §§ 27-9.1-1 et seq. and 27-29-1 et seq and the regulations
promulgated thereunder.
(N)
A company or independent insurance adjuster’s duties include determining the
amount of money that an insurance company will pay for a motor vehicle damage
claim. While a company or independent adjuster may rely upon the written
appraisal in the settlement of the claim, an insurance adjuster cannot require an
appraiser to either include or exclude damage on an appraisal provided however;
the company or independent adjuster may provide the appraiser with information
relating to damage unrelated to the incident or accident that occasioned the
appraisal of the vehicle, or old damage, if the information to be provided by the
company or independent adjuster is required to be included by the appraiser in the
appraisal pursuant to R.I. Gen. Laws § 27-10.1-6.
Section 11
Conduct - Public Adjusters
In addition to the requirements of Section 9 above, all Public Adjusters must also
comply with the following:
(A)
A person acting as a public adjuster shall not misrepresent to a claimant that he or
she is an adjuster representing an insurer in any capacity, including acting as an
employee of the insurer or acting as an independent adjuster unless so appointed
by an insurer in writing to act on the insurer’s behalf for that specific claim or
purpose. A public adjuster is prohibited from charging that specific claimant a fee
when appointed by the insurer and the appointment is accepted by the adjuster.
(B)
No public adjuster shall split any commission, service fee or other valuable
consideration for performing adjusting services to any person unless that person is
required to be licensed under R.I. Gen. Laws § 27-10-1 et seq..
(C)
In the event of a catastrophic disaster, there shall be limits on catastrophic fees.
No public adjuster shall charge, agree to or accept as compensation or
reimbursement any payment, commission, fee, or other thing of value equal to
more than ten percent (10%) of any insurance settlement or proceeds. No public
adjuster shall require, demand or accept any fee, retainer, compensation, deposit,
or other thing of value, prior to settlement of a claim.
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(D)
Public adjusters shall ensure that all contracts for their services are in writing and
contain the following terms:
(1)
Legible full name of the adjuster signing the contract, as specified in
Department records;
(2)
Permanent home state business address and phone number;
(3)
Department license number;
(4)
Title of “Public Adjuster Contract”;
(5)
The insured’s full name, street address, insurance company name and
policy number, if known 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)
Date contract was signed by the public adjuster and date the contract was
signed by the insured;
(10)
Full salary, fee, commission, compensation or other considerations the
public adjuster is to receive for services.
(11)
The contract may specify that the public adjuster shall be named as a co-
payee on an insurer’s payment of a claim.
(a)
If the compensation is based on a share of the insurance settlement,
the exact percentage shall be specified.
(b)
Initial expenses to be reimbursed to the public adjuster from the
proceeds of the claim payment shall be specified by type, with
dollar estimates set forth in the contract and with any additional
expenses first approved by the insured.
(c)
Compensation provisions in a public adjusting contract shall not be
redacted in any copy of a contract provided to the Department
upon request. Such a redaction shall constitute an omission of
material fact.
(E)
If the insurer, not later than seventy-two (72) hours after the date on which the
loss is reported to the insurer, either pays or commits in writing to pay to the
insured a policy coverage limit(s), the public adjuster shall, with respect to that
coverage:
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(1)
Not receive a commission consisting of a percentage of the total amount
paid by an insurer to resolve a claim;
(2)
Inform the insured that loss recovery amount might not be increased by
insurer; and
(3)
Be entitled only to reasonable compensation from the insured for services
provided by the public adjuster on behalf of the insured, based on the time
spent on a claim and expenses incurred by the public adjuster, until the
claim is paid or the insured receives a written commitment to pay from the
insurer.
(F)
A public adjuster shall provide the insured a written disclosure concerning any
direct or indirect financial interest that the public adjuster has with any other party
who is involved in any aspect of the claim, other than the salary, fee, commission
or other consideration established in the written contract with the insured,
including but not limited to any ownership of, other than as a minority
stockholder, or any compensation expected to be received from, any construction
firm, salvage firm, building appraisal firm, motor vehicle repair shop, or any other
firm which provides estimates for work, or that performs any work, in conjunction
with damages caused by the insured loss on which the public adjuster is engaged.
The word “firm” shall include any corporation, partnership, association, joint-
stock company or person.
(G)
A public adjuster contract may not contain any contract term that:
(1)
Allows the public adjuster’s percentage fee to be collected when money is
due from an insurance company, but not paid, or that allows a public
adjuster to collect the entire fee from the first check issued by an insurance
company, rather than as percentage of each check issued by an insurance
company;
(2)
Requires the insured to authorize an insurance company to issue a check
only in the name of the public adjuster;
(3)
Imposes collection costs or late fees; or
(4)
Precludes any party from pursuing civil remedies.
(H)
Prior to the signing of the contract the public adjuster shall provide the insured
with a separate disclosure document regarding the claim process that states:
(1)
Property insurance policies obligate the insured to present a claim to his or
her insurance company for consideration. There are three (3) types of
adjusters that could be involved in that process. The definitions of the
three types are as follows:
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(a)
“Company adjuster” means the insurance adjusters who are
employees of an insurance company. They represent the interest of
the insurance company and are paid by the insurance company.
They will not charge you a fee.
(b)
“Independent adjuster” means the insurance adjusters who are
hired on a contract basis by an insurance company to represent the
insurance company’s interest in the settlement of the claim. They
are paid by your insurance company. They will not charge you a
fee.
(c)
“Public adjuster” means the insurance adjusters who do not work
for any insurance company. They work for the insured to assist in
the preparation, presentation and settlement of the claim. The
insured hires them by signing a contract agreeing to pay them a fee
or commission based on a percentage of the settlement, or other
method of compensation.
(2)
The insured is not required to hire a public adjuster to help the insured
meet his or her obligations under the policy, but has the right to do so.
(3)
The public adjuster is not a representative or employee of the insurer.
(4)
The salary, fee, commission or other consideration is the obligation of the
insured, not the insurer.
(I)
The contract shall be executed in duplicate to provide an original contract to the
public adjuster, and an original contract to the insured. The public adjuster's
original contract shall be available at all times for inspection without notice by the
Department.
(J)
The public adjuster shall provide the insurer a notification letter, which has been
signed by the insured, authorizing the public adjuster to represent the insured’s
interest.
(K)
The insured has the right to rescind the contract within three (3) business days
after the date the contract was signed. The rescission shall be in writing and
mailed or delivered to the public adjuster at the address in the contract within the
three (3) business day period.
(L)
If the insured exercises the right to rescind the contract, anything of value given
by the insured under the contract will be returned to the insured within fifteen (15)
business days following the receipt by the public adjuster of the cancellation
notice.
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(M)
A public adjuster who receives, accepts or holds any funds on behalf of an
insured, towards the settlement of a claim for loss or damage, shall deposit the
funds in a non-interest bearing escrow or trust account in a financial institution
that is insured by an agency of the federal government in the public adjuster’s
home state or where the loss occurred.
(N)
A public adjuster shall maintain a complete record of each transaction as a public
adjuster. The records required by this section shall include the following:
(1)
Name of the insured;
(2)
Date, location and amount of the loss;
(3)
Copy of the contract between the public adjuster and insured;
(4)
Name of the insurer, amount, expiration date and number of each policy
carried with respect to the loss;
(5)
Itemized statement of the insured’s recoveries;
(6)
Itemized statement of all compensation received by the public adjuster,
from any source whatsoever, in connection with the loss;
(7)
A register of all monies received, deposited, disbursed, or withdrawn in
connection with a transaction with an insured, including fees transfers and
disbursements from a trust account and all transactions concerning all
interest bearing accounts;
(8)
Name of public adjuster who executed the contract; and
(9)
Name of the attorney representing the insured, if applicable, and the name
of the claims representatives of the insurance company.
(O)
A public adjuster is obligated, under his or her license, to serve with objectivity
and complete loyalty to the interest of his client alone; and to render to the insured
such information, counsel and service, as within the knowledge, understanding
and opinion in good faith of the licensee, as will best serve the insured’s insurance
claim needs and interest.
(P)
A public adjuster shall not solicit, or attempt to solicit, an insured during the
progress of a loss-producing occurrence, as defined in the insured’s insurance
contract.
(Q)
A public adjuster shall not permit an unlicensed employee or representative of the
public adjuster to conduct business for which a license is required.
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(R)
A public adjuster shall not have a direct or indirect financial interest in any aspect
of the claim, other than the salary, fee, commission or other consideration
established in the written contract with the insured, unless full written disclosure
has been made to the insured as set forth in Sections 11(F) and/or (U) of this
Regulation.
(S)
A public adjuster shall not acquire any interest in salvage of property subject to
the contract with the insured unless the public adjuster obtains written permission
from the insured after settlement of the claim with the insurer as set forth in
Sections 11(F) and/or (U) of this Regulation.
(T)
The public adjuster shall abstain from referring or directing the insured to obtain
needed repairs or services in connection with a loss from any person, unless
disclosed to the insured:
(1)
With whom the public adjuster has a financial interest; or
(2)
From whom the public adjuster may receive direct or indirect
compensation for the referral.
(U)
The public adjuster shall disclose to an insured if he or she has any interest or will
be compensated by any construction firm, salvage firm, building appraisal firm,
motor vehicle repair shop or any other firm that performs any work in conjunction
with damages caused by the insured loss. The word "firm" shall include any
corporation, partnership, association, joint-stock company or individual.
(V)
Any compensation or anything of value in connection with an insured’s specific
loss that will be received by a public adjuster shall be disclosed by the public
adjuster to the insured in writing including the source and amount of any such
compensation.
(W)
A public adjuster shall not enter into a contract or accept a power of attorney that
vests in the public adjuster the effective authority to choose the persons who shall
perform repair work.
(X)
A public adjuster shall ensure that all contracts for the public adjuster’s services
are in writing and set forth all terms and conditions of the engagement.
(Y)
A public adjuster may not agree to any loss settlement without the insured’s
knowledge and consent.
(Z)
The contract entered into by a public adjuster shall not be construed to prevent an
insured from pursuing any civil remedy after the three-business day revocation or
cancellation period.
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Section 12
License Denial, Non-Renewal or Revocation
(A)
The Department may place on probation, suspend, revoke or refuse to issue or
renew an adjuster’s license or may levy a civil penalty in accordance with R.I.
Gen. Laws § 42-14-16 for any one or more of the following causes:
(1)
Failing to respond to any written inquiry (including electronic
communications) from the Department within 21 calendar days of receipt
of such inquiry.
(2)
Providing incorrect, misleading, incomplete, or materially untrue
information in the license application.
(3)
Violating any insurance laws, or violating any regulation, subpoena, or
order of the Department or of another state’s insurance commissioner.
(4)
Obtaining or attempting to obtain a license through misrepresentation or
fraud.
(5)
Improperly withholding, misappropriating, or converting any monies or
properties received in the course of doing insurance business.
(6)
Having been convicted of a felony.
(7)
Having admitted or been found to have committed any insurance unfair
trade practice or insurance fraud.
(8)
Using fraudulent, coercive or dishonest practices; or demonstrating
incompetence, untrustworthiness or financial irresponsibility in this state
or elsewhere.
(9)
Having an insurance license, or its equivalent, denied, suspended, or
revoked in any other state, province, district or territory.
(10)
Forging another’s name to any document.
(11)
Cheating, including improperly using notes or any other reference
material, to complete an examination for an insurance license.
(12)
Failing to comply with an administrative or court order imposing a child
support obligation.
(13)
Failing to pay state income tax or comply with any administrative or court
order directing payment of state income tax.
(B)
In the event that the action by the Department is to deny an application for or not
renew a license, the Department shall notify the Applicant or licensee, in writing,
of the reason for the non-renewal or denial of the license. The Applicant or
licensee may make written demand upon the Department within ten days for a
hearing before the Department to determine the reasonableness of the
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Department’s action. The hearing shall be held pursuant to R.I. Gen. Laws §§ 42-
35.
(C)
The license of a business entity may be suspended, revoked or refused if the
Department finds, after hearing, that an individual licensee’s violation was known
or should have been known by one or more of the partners, officers or managers
acting on behalf of the business entity and the violation was neither reported to
the Department nor corrective action taken.
(D)
In addition to or in lieu of any applicable denial, suspension or revocation of a
license, a person may, after hearing, be subject to a fine and/or any other
appropriate remedies according to R.I. Gen. Laws § 42-14-16.
(D)
The Department shall retain the authority to enforce the provisions of and impose
any penalty or remedy authorized by R.I. Gen. Laws §§ 27-10-1 et seq., 42-14-16
and/or this Regulation against any person who is under investigation for or
charged with a violation even if the person’s license or registration has been
surrendered or has lapsed by operation of law.
Section 13
Reporting of Actions
(A)
The adjuster shall report to the Department any administrative action taken
against the adjuster in another jurisdiction or by another governmental agency in
this state within thirty (30) days of the final disposition of the matter. This report
shall include a copy of the order, consent to order, or other relevant legal
documents.
(B)
Within thirty (30) days of the initial pretrial hearing date, the adjuster shall report
to the Department any criminal prosecution of the adjuster taken in any
jurisdiction. The report shall include a copy of the initial complaint filed, the
order resulting from the hearing, and any other relevant legal documents.
Section 14
Severability
If any provision of this Regulation or the application thereof to any person or
circumstances is held invalid or unconstitutional, the invalidity or unconstitutionality
shall not affect other provisions or applications of this Regulation which can be given
effect without the invalid or unconstitutional provision or application, and to this end the
provisions of this Regulation are severable.
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Section 15
Effective Date
This Regulation shall be effective as indicated below.
EFFECTIVE DATE:
February 19, 1988
REFILED:
December 19, 2001
AMENDED:
March 27, 2006
AMENDED:
June 3, 2008
AMENDED:
January 1, 2015