OGC Op. No. 06-06-08
The Office of General Counsel issued the following opinion on June 20, 2006, representing the position of the New York State Insurance Department.
Is an attorney required to obtain an insurance adjuster license or be admitted to practice law in New York State in order to adjust New York claims from outside the State?
Yes, an attorney not admitted to practice law in New York is required to obtain an insurance adjuster license in order to adjust New York claims from outside the State. Attorneys licensed to practice law in New York are exempt from this licensing requirement.
The inquirer states that his client is an attorney who is licensed to practice in another state (hereinafter "State A") and works for a third party administrator (hereinafter "TPA"), located in State A, as an adjuster, not as an attorney. The client is not licensed as an adjuster in State A. She is not licensed as an adjuster in New York either, but adjusts New York claims for her company. The Department assumes for purposes of this inquiry, that the TPA and the attorney are engaging in such activities on behalf of an insurer, not an insured.
N.Y. Ins. Law § 2101(g)(1)(F) (McKinney Supp. 2006) defines the term "independent adjuster," as follows:
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, except that such term shall not include:
(F) any licensed attorney at law of this state.
N.Y. Ins. Law § 2102(a)(1) (McKinney Supp. 2006) provides in pertinent part:
No 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 this chapter.
Although the New York Insurance Law provides a number of limited exclusions to the requirement that an individual must obtain an independent adjuster license in order to adjust claims, none of the exclusions apply to the facts presented. Specifically, attorneys licensed in this state are exempt from the licensing requirements, but in this case the inquirers client is not licensed as an attorney in New York. Thus, this exemption does not apply, and any employee of a TPA, whether located in New York or outside of New York, engaging in adjusting activity in New York would need his or her own independent adjusters license.
The inquirer mentions that the attorney in question works for a TPA. However, that term is not defined by the New York Insurance Law and, as such, there are no licensing or registration requirements for TPAs under the New York Insurance Law. Nevertheless, any person or entity, including a TPA, that performs the functions that require licensing, such as adjusting, must be licensed accordingly. In this case, not only the attorney, but the company she works for, needs to be licensed as an adjuster in New York since the attorney is engaging in the adjusting activities on behalf of the TPA.
N.Y. Ins. Law § 2108 (McKinney Supp. 2006) does not impose a residency requirement on independent adjuster licensees. Therefore, as long as applicants meet all New York licensing requirements, the New York State Insurance Department will issue insurance adjuster licenses to residents of another state. If the attorney and the company she works for wishes to become licensed as independent adjusters, they should contact the New York State Insurance Department Licensing Bureau and may not adjust claims in New York until they become licensed.
For further information you may contact Senior Attorney Elizabeth Barrett at the New York City Office.