The Office of General Counsel issued the following informal opinion on March 14, 2002, representing the position of the New York State Insurance Department.
Re: Licensing as an Adjuster
Does a subrogation claims business need to be licensed as an insurance adjuster by the Department?
No. A subrogation claims business such as the one described herein does not need to be licensed as an insurance adjuster by the Department.
The Inquirer stated in his letter that his client manages on an outsourced basis the subrogation process for large insurance companies. This clients activities do not begin on any given matter until the insured has received payment from the insurer under its policy. Usually, when an insureds claim is paid by the insurer, the insured assigns to the insurer its rights against any third parties for the related loss event. The client pursues recoveries on behalf of the insurer against such third parties.
Said client typically does not get involved with a matter before the underlying insurance claim has been paid. The one exception to this is that in connection with large losses, typically more than $100,000.00, the client may contact local counsel at the time of the loss event to determine whether the site of the loss should be visited to identify and protect evidence that may be required if a subrogation claim is to be pursued. No further action is taken by the client following such a site inspection pending the payment of the underlying insurance claim and the assignment to the insurer of the insureds rights against third parties responsible for the loss.
The Department has previously opined that the definition of an independent adjuster contemplates both the investigating and adjustment of claims on the insurance contract.
N.Y. Ins. Law § 2101(g)(1) defines an independent adjuster as:
The term "independent adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigating and adjusting claims arising under insurance contracts issued by such insurer and who performs such duties required by such insurer as are incidental to such claims and also includes any person who for compensation or anything of value investigates and adjusts claims on behalf of any independent adjuster, ... .
N.Y. Ins. Law § 2101(g)(1) (McKinney 2000)
Since it does not appear, based on the activities of the client, that either the subrogation aspect of the business or the site inspection aspect of it would involve the investigation and adjustment of any claims, the clients activity would not be that of an independent adjuster. Accordingly, there would be no need for the client to acquire a license from this Department. Please note that this opinion is limited to an interpretation of the Insurance Law. No opinion is provided regarding any other laws of this state.
For further information you may contact Senior Attorney Adiza Mohammed at the New York City Office.