The Office of General Counsel issued the following opinion on April 11, 2005, representing the position of the New York State Insurance Department.
Re: Licensing Requirement for Independent Adjuster
Does a client, already licensed as an independent adjuster, need such license based on the duties it performs for insurers, namely, reviewing health care claims to compare the providers fees with schedules of usual and customary charges, and, if necessary, negotiating charges with health care providers and recommending to the insurer that excessive charges be repriced?
Yes. The functions done by the client are beyond clerical and ministerial duties and are within the normal scope of activities done by licensed independent adjusters acting for insurers in the investigation and adjustment of claims and work required by insurers that is incidental to such claims.
The inquirers client has contractual relationships with insurers to review health care claims to compare providers charges with schedules of usual and customary charges, to negotiate charges with such providers, and to recommend to insurers that excessive charges be repriced.
Pursuant to N.Y. Ins. Law § 2102(a)(1) (McKinney Supp. 2005), "[n]o person, firm, association or corporation shall act as an insurance producer or insurance adjuster in this state without having authority to do so by virtue of a license issued and in force pursuant to the provisions of the this chapter."
N.Y. Ins. Law § 2108(a) (McKinney Supp. 2005) states:
(1) Adjusters shall be licensed as independent adjusters or as public adjusters.
(2) The superintendent may prescribe the types of independent adjusters" licenses according to the kind or kinds of insurance claims which the licensee is to be authorized to investigate and adjust.
(3) No adjuster shall act on behalf of an insurer unless licensed as an independent adjuster, and no adjuster shall act on behalf of an insured unless licensed as a public adjuster.
(4) No insurer, agent or other representative of an insurer shall pay any fees or other compensation to any person, firm, association or corporation for acting as an independent adjuster except to a licensed independent adjuster or to a person excepted from the licensing requirement pursuant to subsection (g) of section two thousand one hundred one of this article.
N.Y. Ins. Law § 2101(g)(1) (McKinney Supp. 2005) states:
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. . . .
As stated above, the clients responsibilities are beyond clerical and ministerial duties and are within the statutory requirement for licensing of an independent adjuster. Accordingly, the client needs to remain licensed as such to engage in the activities.
For further information please contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.