Licensing Requirements

Qualifications: Application

Licensing Process: Examination

Licensing Exemptions

Provisions shall not appy to the Following:

• Attorneys duly admitted to practice in teh state when actin in their professional capacity as an attorney
• A person employed solely to obtain facts surrounding a claim or to furnish technical assistance to a licensed insurance claims adjuster
• An individual who is employed to investigate suspected insurance fraud and who does not adjust losses or determine claims payments

Temporary Adjuster License

License Display

License Maintanence and Duration

License Renewal

Examination of Records

Commissioner may examine accounts, records, documents and transactions pertaining to or affecting the insurance affairs of any insurance producer, adjuster, insurer, representative, or any person acting as any of these if there is reasonable grounds to believe there is noncompliance with or violation of law, regulation, or order.

If upon examination of any person the commissioner determines that the person is not in violation of the law or any applicable regulation, the expense of the examination shall be borne by the insurance department.

Continuing Education

• Every two years, at least 60 days prior to the renewal date of their license, persons holding an adjusters license shall be certified by the insurance department as having completed 20 hours of continuing education instruction.
• Licensees with workers' compensation authority shall comply with the approved 10 credit hours of worker' compensation and 10 credit hours of multi-line requirement.
• Those w/o workers' compensation authority may satisfy their 20 credit hour requirement exclusively with multi-line courses.
• Persons holding a public adjusters license shall be certified by the insurance department as having completed 15 hours of continuing education instruction. Such instruction shall be approved by the insurance department.
•  If a nonresident licensee's state of residence has mandatory continuing education requirements substantially similar to the requirements of the state, teh commissioner may accept certification of the licensee's compliance in the state of residence.

Disciplinary Actions

Cease and Desist Order

• The Commissioner may issue a statement of charges and notice of a hearing to be held at a time and place stated in the notice if he/she suspects any person involved in insurance business to be engaging in any method of competition or any act which appears to be deceptive or unfair, as well as if a proceeding is of public interest.
• Notice must be given at least 10 days before hearing date
• May be in the form of a notice to show cause stating the action to be taken unless the person shows cause at the hearing as to why action should not be taken
• After hearing, if commissioner determines the actions are in violation of law and the individual has not dicontinued said actions, the commissioner will reduce the findings to writing and issue and cause to be served on the person, and require that individual to cease and desist in said actions

Penalty for Violating Cease and Desist Order

Suspension or Revocation

• The commissioner may for good cause shown, after notice and hearnig, suspend or revoke the insurance claims adjuster's license of any holder or subject him to an administrative fine not to exceed $2500.
• Such hearing may be held by the commissioner or any person designated by him.
• Any person aggrieved by said action of the commissioner or refused a licesnse or renewal of same by him may appeal in accordanc with state code.

Penalties and Fines

Any person who acts within this state as an insurance claims adjuster without being licensed as provided, or any licensee who in the course of his work as a claims adjuster misrepresents his identity or the identity of his principal pr employer, or who wrongfully divulge information coming to him in his capacity as an insurance claims adjuster, shall:

• Be Guilty of a misdemeanor if a natural person, or guilty of a felony if any other person; and
• Be subject to suspension or revocation of his license and fine not to exceed $2500 for each violation

Claim Settlement Laws and Regulations

Unfair Claim Settlement Practices by Insurers

Any of the following acs by an insurer, if committed without just cause and not merely inadvertently or accidently shall constitute unfair claim settlement practices:

• Knowingly misrepresenting to claimants or insureds pertinent facts or policy provisions relating to coverages at issue
• Failing to acknowledge and act promptly upon communications with respect to claims arising under insurance policies
• Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies
• Not attempting in good faith to effectuate prompt, fair and equitable settlements or compromises of claims in which liability has become reasonably clear
• Compelling claimants to institute litigation to recover amounts due under insurance policies by offering substantially less that the amounts ultimately recovered in actions brought by them

READ REST IN SUPPLEMENT BOOK PAGES 4-5!

Adjustment and Payment of Loss

• The company shall begin the adjustment of the loss within 15 days after receipt of notice of the loss.
• The amount of loss under a fire insurance policy shall be due and payable in 60 days after receipt by the insuring company of proof of loss, and the insured may commence an action after the expiration of that time to recover the same

Rebuilding

Neglect of Insurer

Notice to Insured

Claims Settlement Regulations

DEFINITIONS

Claim File

Claimant

Communications

Documentation

Fair Market Value

Independent repair shop or facility

any entity that:

• Provides automobile repair services; and
• Has no arrangements with respect to repair prices or services with the insurer making a payment for settlement of the damaged motor vehicle; but might have arrangement with respect to repair prices or services with other insurers

Insured

Investigation

Notice of a claim

a motor vehicle that is:

• Not insured under and insurance policy
• An insured motor vehicle for which the insurer is unable to make payment within the insured liability limits due to insolvency; or
• An insured motor vehicle that at the time of the accident had limits of liability insurance that was lower than the minimum limits required for a motor vehicle liability policy pursuant to applicable law

Computation of Time

Communications Time Limits

Notice of a claim given by an insured or claimant to an insurer's appionted producer shall be considered notification to the insurer, unless:

• Otherwise provided by law or the policy; or
• The appointed producer notifies the insured or claimant within five working days of receipt of notice of a claim that the appointed producer is not authorized to receive notices of claims

Claims Settlement Time Limits

• Unless otherwise provided by law, every insurer shall establish procedures to commence an investigation of any notice of a claim filed no later than 5 working days from receipt of notice and claimand anticipate the seasonal changes in the volume of claims in order to comply with this section
• Every insurer, upon receipt of notice of a claim, shall acknowledge the receipt of such notice to the insured or claimant within 10 working days, either by (1) written Correspondence, including facsimile or email if acceptable to both parties or (2) by telephone or face-to-face communication if the insurer provide the toll free number of the claims office handling the claim. If requested, a written acknowledgement should be sent to insured or claimant within 5 working days from request
• Insurer shall make a complete decision regarding coverage, acceptance, denial or payment of a claimand communicate this to the insured or claimant within 30 days from the receipt of the notice of claim with the following exceptions:
  • if decision cant be made due to insurer needing more time the insurer must provide a delay letter to insured or claimant in writing explaining reasons for needing more time
  • insurer shall send a delay letter within 30 days of delay, and every 30 days after explaining specific reason for delay

Additional Info Required in Accepting or Denying claims

Notice shall be given in any case where a claim is denied, outling the specific reasons for denial. However, if the denial is due to fraud, a general statement explaining the damage did not occur in the manner reported by the insured or claimant will suffice.

Every Insurer shall provide with each claim payment, either on the check, draft or in a letter, the reason for the payment and date of loss (ex. Collision payment for your accident on (date)).

Undisputed Amounts

Advance Payments

Value of Total Loss (Other than Motor Vehicle)

When insured or claimant's property deemed total loss, and there is no dispute concerning liability or coverage, insurers attempting to establish credit shall:

• Value the property in teh community where the TL property was located.
• Be prohibeted from using arbitrary methods to establish the value of the property that do not take into consideration the specific characteristics of the property; however this shall not preclude the insurer from making an offer of settlement on property based upon the FMV of like, kind, and quality property wherever situated
• Consider as an element of damages additional costs incurred in purchasing and shipping the property

In addition to above mentioned requirements, ever TL settlement made or offered by the insurer to replace lost/damaged jewelry, watches, precious/semi-precious stones, under applicable insurance, shall comply with provisions of this setion

No insurer shall employ or otherwise utilize the services of an adjuster unless that adjuster has complied with all the appropriate licensing provisions or has been granted a temporary license pursuant to state law.

However, any claim adjusted to the satisfactino of an insurer and the insured/claimant by an unlicensed adjuster shall bind the insurer

Prior to concluding there is no coverage for the loss as a result of the insured's failure to comply with any obligation imposed under the policy, the insurer shall:

• Establish that the breach was a material breach that excuses the insurer from performance under the insurance policy;
• Document the basis for concluding that the breach is material in the claim file

An insurer shall not refuse to make and eval of the insured's liability in any claim because the insured requests that the insurer not make a claim payment for the loss

Loss of Use

In all motor vehicle property damage claims where liability is clear teh insurer shall:

• Immediately inform the claimant that coverage exists for rental of a vehicle similar to their own for duration of repairs provided the insurer shall:
• Not be required to provide coverage for rental payments due to unreasonable delay in the repair caused by the direct action or inaction of the claimant;
• Document the basis for finding of undreasonable delay to the claim file
• Be able to deduct the costs that would have been incurred in teh operation of the claimant's own vehicle from teh total costs of renting and operating the rental, provided, however that the claimant not have comprehensive or collision coverage as required by rental agency, insurer shall pay the reasonable cost of the comprehensive and collision coverage.
• Specifically document the claim file with evidence to show that a rental was offered to the claimant

Insured/claimant shall only be responsible for the cost of noe damage estimate for motor vehicle property damage liability and collision and comprehensive claims.

The insurer shall be responsibel for any charge incurred by either party for a second, or any subsequent damage estimates required by the insurer.

DETERMINING AMOUT OF MOTOR VEHICLE TOTAL LOSS CLAIMS

Valuation Methods

Average Retail Value

Derived from the application of a process or methodology that the department accepts as a statistically valid method of establishing FMV in the local market area, developed and submitted according to the following guidelines:

• In order to be acceptable, the inurer, or vendor on behalf of the insurer, shall submit to the department a description of their methodology or model accompanied by supporting details. Supporting details should outline how the validation process or model is designed and an analytical and/or statistical validation of the assumptions, parameters, data elements and results of the process or model.
• The Department will publish a list of accepted valuation guides/methodologies at the beginning of every calander year.
• If there are any changes made in the process or methodology provided, the insurer or vendor shall provide the department with details as to teh changes being made, so that the department can decide whether to keep it on the acceptable list
• Info submitted to department shall be considered confidential and commercial info not subject to disclosure and trated as confidential by the commissioner.

Documented Sales Cost

Documented sales cost of no fewer than two motor vehicles of teh same make, model, and year as the TL vehicle that have occured in the past 90 days within the local market area.

If unavailable, then use:

• Documented sales cont of at least 2 vehicles of like kind and quality in past 90 days within LMA; or
• Average sales price derived frmo written quotations for a motor vehicle that is the same make, model, and year as the TL vehicle, obtained by the insurer from at least three different licensed dealerships located within LMA that engage in the buying and selling of motor vehicles of like kind and quality in ordinary course of business

Deviations from described valuation methods

For Construction and Commercial Vehicles, Data may be collected outside the LMA but only to the extent necessary to obtain sufficient data as required above;

If the insurer can demonstrate that the vehicle is a make or model not customarily found in the LMA, data may be collected from outside the LMA but only to the extent necessary to obtain sufficient data as required above

Disagreement with value derived

Reliable Sources

• Any objective documented process or methodology that the department accepts;
• Actual sales of one or more motor vehicles of the same make, model and year as TL vehicle that have occured in the LMA during past 90 days
• Actual sales of one or more motor vehicles of like kind and quality that have occured in LMA over past 90 days
• At least 2 written quotations for motor vehicle of same make, model and year obtained from a licensed dealership located in LMA that engage in the buying and selling of motor vehicles of like kind and quality in ordinary course of their business

Fair Market Value

and

Betterment/Depreciation

FMV shall be adjusted to reflect motor vehicle condition, high and low mileage and accessory options if not otherwise provided for in the methodology or data source

Betterment or depreciation adjustmens to TL value shall be calculated as follows:

• Reflect a measurable decrease in FMV attributable to prior damage to the motor vehicle , considering its age, for any of the following:
  • Normal wear and tear or rust, limited to no more than a deduction of $1000
  • Missing parts, limited to the reduction in the FMV of the vehicle as a result
  • damage to the vehicle limited to the reduction in the FMV of the vehicle as a result
• Are measureable, itemized, specified as to dollar amount and documented

No insurer shall require the insured/claimant to supply parts for replacement

No insurer shall decrease MV for vehicle recondition or dealer preparation costs.

No insurer shall reduce or attempt to reduce for depreciationany settlement or any offer of settlement for motor vehicle accessory options not adversely affected by age, use, or obsolescence

If Insured/Claimant chooses to keep TL vehicle

Willing and Able Contractors and Repairers- Other than Motor Vehicle

Every settlement made or offered upon the basis of an appraisal conducted on behalf of the insurer relative to property and liability insurance shall:

• Include a written statement that if the claimant or insured cannot find a contractor or repairer to do the repair or replace the damage property for the price quoted, the insurer will provide a list of known recognized, competent and conveniently located contractor/repairers who are ready, willing and able to complete the job for the quoted price.
• If the insurer proved the insured/claimant with the list, the insurer shall also provide a written disclosure that any contractor/repairer may be used at the discretion of the insured/claimant.
• If the insurer is unable to provide such a list, then any fair and reasonable cost incurred to repair or replace the damage as set forth in the appraisal, in excess of the appraisal price, shall be at the expense of the insurer.
• If a list is given with contractors/repairers who are ready, willing and able to take on the job at the quoted price with like kind and quality products, and the insured/claimant use another contractor or repairer, then any cost in excess of the insurer's appraisal prices shall not be atthe expense of the insurer

The insured/claimant shall be entitled to the usual and customary guarantees as to materials and workmanship relative to the proerty that is being repaired/replaced.

In processing such claims, an insurer shall not require as a condition to payment, or by use of coercive, threatening or intimidating statements, the use of particular contractors/repairers. Any settlement made based upon an agreement negotiated by an adjuster on behalf of the insurer with a contractor or repairer shall include a provision for coverage of hidden damage that is determined to be connected with the claim in question.

Willing and Able Contractors and Repairers- Motor Vehicle

Every settlement made or offered upon the basis of an appraisal conducted on behalf of the insurer relative to motor vehicle insurance shall:

• Represent the fair and reasonable price in the area charged by repair shops or facilities providing similar services with the usual and customary guarantees as to materials and workmanship
• Include a written statement that the insurer shall provide the name and address of a recognized, competent and conveniently located repair shop or facility who is willing and able to repair or replace the damaged motor vehicle with other like, kind and quality within a reasonable time for the price quoted in the appraisal.
• Include in the written statement a disclosure that any repair shop or facility may be used at the discretion of the insured or claimant.

The insured/claimant shall be entitled to the usual and customary guarantees as to materials and workmanship relative to the motor vehicle that is being repaired/replaced.

If the insurer is unable to provide the name of a name of a repair shop or facility upon request, any additional repair or replacement costs incurred in excess of the insurer's appraisal price shall be at the expense of the insurer.

In processing such claims, an insurer shall not require as a condition to payment, the use of particular repair shop or facility. Any settlement made based upon an agreement negotiated by an adjuster on behalf of the insurer with a contractor or repairer shall include a provision for coverage of hidden damage that is determined to be connected with the claim in question.

Insurers specifying the use of after market parts shall:

• not require the use of such parts unless they are of at least equal in like kind and quality to the original part in terms of fit, quality and performance. Accordingly, insurers shall not require the use of such parts unless they states or certifies in writing that the part is of like kinda and quality;
• Consider the cost of any modifications, re-repairs or delays that might become necessary when making the repair

 Any settlement made based upon an agreement negotiated by an appraiser on behalf of the insurer with a repair shop or facility shall include a provision for coverage of hidden damage that is determined to be connected with the claim in question.

If an independant repair shop or facility and an insurer cannot agree on a price, and the insurer has complied with the requirements listed above, then:

• The price shall be the price available from any other recognized, competent and conveniently located independent repair shop/facility that is willing and able to perform repairs within a reasonable time; and
• the insurer shall furnish to the insured/claimant a written statement containing a statement (See pg. 16 of supplement)

For all claims, insurers shall not use coercive, threatening, or intimidating statements at any time orally or in writting, to insureds/claimants for the purpose of influencing their decision choice of repair shop/facility

Misc. Provisions

An insurer shall not apply an insured's collision deductible when the damage is:

• Caused by an uninsured motor vehicle, and
• The operator of the uninsured motor vehicle has been positively identified; and
• The operator of the uninsured motor vehicle is solely at fault

Every insurer shall exercise due diligence in the pursuit of subrogation no behalf of the insured. Upon receipt of final subro recovery, the insurer shall return the insured's portion as soon as practical but not later than 30 days from receipt of the final recovery

Insurer Documentation

Insurance Fraud and False Statements

Anyone engaged in the insurance business that makes false material statements or reports or willfully and materially overvalues any land, property or security in connection with financial reports or documents presented to an insurance regulatory official or agency for the purpose of influencing their actions will be punished accordingly.

An insurance office, director or agent who willingly embezzles, abstracts, purloins, or misappropriates any of the moneys, funds, premiums, credits or other property of any insurer may be punished accordingly.If the amount or value does not exceed $5000, whoever violates this section will be fined and/or imprisoned for up to one year.

Any insurance professional that knowingly makes any false entry of material fact in any book, report or statement of a person engaged in the insurance business with intent to deceive another person about the financial condition or solvency of the business may be punished accordingly.

For all mentioned cases, Punishment may consist of a fine and/or imprisonment for up to 10 years. The term of imprisonment may be up to 15 years if the statement, report, or evervaluing of land, property, or security jepardized the safety and soundness of an insurer and was a significant cause of the insurer being placed in conservation, rehabilitation, or liquidation by an apporpriate court.

Anyone who threatens, forces, or corruptly influences, obstructs, or impedes the due and proper administration of the law under any proceeding involving the insurance business may be fined and/or imprisoned for up to 10 years.

An insurance professional who has been convicted of any criminal felony involving dishonesty or a breach of trust, or who has been convicted of an offense under this section, may be fined and/or imprisoned for up to 5 years. After committing a felony of this nature, the offender may not engage in the business of insurance unless he or she obtains the written consent of an insurance regulatory official.