230 R.I. Code R. 230-RICR-20-50-4.11

Current through November 7, 2024

Section 230-RICR-20-50-4.11 - Conduct - Public Adjusters

A. In addition to the requirements of § 4.9 of this Part, all Public Adjusters must also comply with the following:

1. 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.

2. 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 Chapter 27-10.

3. 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.

4. Public adjusters shall ensure that all contracts for their services are in writing and contain the following terms:

a. Legible full name of the adjuster signing the contract, as specified in Department records;

b. Permanent home state business address and phone number;

c. Department license number;

d. Title of "Public Adjuster Contract";

e. The insured's full name, street address, insurance company name and policy number, if known or upon notification;

f. A description of the loss and its location, if applicable;

g. Description of services to be provided to the insured;

h. Signatures of the public adjuster and the insured;

i. Date contract was signed by the public adjuster and date the contract was signed by the insured;

j. Full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services.

k. The contract may specify that the public adjuster shall be named as a co-payee on an insurer's payment of a claim.

(1) If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.

(2) 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.

(3) 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.

5. 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:

a. Not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim;

b. Inform the insured that loss recovery amount might not be increased by insurer; and

c. 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.

6. 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.

7. A public adjuster contract may not contain any contract term that:

a. 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;

b. Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;

c. Imposes collection costs or late fees; or

d. Precludes any party from pursuing civil remedies.

8. 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:

a. 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:

(1) "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.

(2) "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.

(3) "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.

b. 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.

c. The public adjuster is not a representative or employee of the insurer.

d. The salary, fee, commission or other consideration is the obligation of the insured, not the insurer.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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:

a. Name of the insured;

b. Date, location and amount of the loss;

c. Copy of the contract between the public adjuster and insured;

d. Name of the insurer, amount, expiration date and number of each policy carried with respect to the loss;

e. Itemized statement of the insured's recoveries;

f. Itemized statement of all compensation received by the public adjuster, from any source whatsoever, in connection with the loss;

g. 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;

h. Name of public adjuster who executed the contract; and

i. Name of the attorney representing the insured, if applicable, and the name of the claims representatives of the insurance company.

15. 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.

16. 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.

17. A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required.

18. 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 §§14.1(A)(6) and/or (A)(21) of this Part.

19. 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 §§14.1(A)(6) and/or (A)(21) of this Part.

20. 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:

a. With whom the public adjuster has a financial interest; or

b. From whom the public adjuster may receive direct or indirect compensation for the referral.

21. 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.

22. 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.

23. 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.

24. 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.

25. A public adjuster may not agree to any loss settlement without the insured's knowledge and consent.

26. 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.

230 R.I. Code R. 230-RICR-20-50-4.11

Amended effective 6/11/2019