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Sponsors
1 Co-sponsor
History
- Recommit, enacting clause stricken
- Referred to insurance
- Returned to senate
- Died in assembly
- Referred to insurance
- Delivered to assembly
- Passed senateVote 62–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.949
- Print number 3771a
- Amend (t) and recommit to insurance
Show 1 earlier action
- Referred to insurance
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S3771A
Title of bill
An act to amend the insurance law, in relation to public adjusters and payment of property/casualty claims
Purpose
The purpose of this bill is to clearly establish conflict of interest Rules, in statute, so that public adjusters have an affirmative duty to act on behalf of and in the best interests of the insured who have retained such adjuster when settling or negotiating an insurance claim for such insured. In addition, such adjuster or their close family relatives, cannot have a financial interest in any business that he or she recommends to an insured for the performance of services, work or repairs associated with the insurance claim that is being negotiated, unless such financial interest is clearly disclosed and acknowledged by the insured in writing.
Read the full memo (780 words)
Summary of provisions
Section 1: Amends Insurance Law section 2108(a) to add new paragraphs
(5) and (6). New paragraph (5) places on the public adjuster an affirmative duty to act on behalf of and in the best interests of the insured when settling or negotiating an insurance claim for such insured. New paragraph (6) prohibits a public adjuster from receiving any compensation or receive anything of value, other than of nominal value, either directly or indirectly, in consideration of the referral of an insured, or upon the recommendation or suggestion that services, work or repairs relating to any insurance claim settled or negotiated by such public adjuster. Provided however, that such public adjuster may receive such compensation, if such arrangement is clearly disclosed to the insured and acknowledged by such insured in a signed writing.
Section 2: Amends Insurance Law section 2108(c) to add the affirmative duty that a public adjuster shall act in a manner as to safeguard the best interests of the insured that he or she represents. Further, that every public adjuster shall not receive any additional fee or compensation, either directly or indirectly, other than what was stated in the compensation agreement with the insured. This subsection is the section that establishes the standards that a public adjuster must abide by to retain their license. If this condition is violated, this provision clearly authorizes the Superintendent to suspend or revoke such public adjuster's license.
Section 3: Amends Insurance Law section 2108(p) that relates to the kinds of compensation that a public adjuster may receive from an insured. Under this bill, a public adjuster, or his or her spouse or close blood relatives, may not receive any form of compensation, other than of nominal value, from any individual or entity in which such adjuster recommends or suggests to an insured for the performance of services, work or repairs related to an insurance claim that such adjuster is involved with, unless the public adjuster discloses that relationship to the insured in a writing that is signed by the insured. The blood relationships covered under this bill are of blood or affinity to the second degree of consanguinity, (i.e. cousins or more distantly related family members.
Section 4: Amends Insurance Law section 2110 (a) to authorize the Superintendent to suspend or revoke the license of a public adjuster for failing to act in the best interests of the insured or for failing to disclosure any conflict of interest that such public adjuster may have as provided for under this bill.
Justification
Under current statutory law, there is not a strict conflict of interest standard incorporated in the law to ensure that public adjusters act in the best interests of their insured in which they are negotiating an insurance claim. Further, under current law, some unscrupulous public adjusters are acting in their own best financial interests and not in the best interest of their clients by referring such clients to businesses that they have a direct or indirect financial stake in to perform services, work or repairs related to an insurance claim. This has lead to a blurring of the lines where certain public adjusters are acting in their own best financial interests and not in the best interest of the individuals who have retained them to obtain the best offer possible to settle an insurance claim. Further, as these improper transactions occur, the Department maintains that they are not able to curtail this activity or suspend or revoke the licenses of those public adjusters that are not acting in their insured's best. interest.
This bill establishes a heightened standard of conduct for public adjusters and clearly authorizes the Department to suspend or revoke a license of a public adjuster that violates such trust.
Legislative history
New bill.
Fiscal implications
None.
Effective date
January 1st of the year next succeeding the date upon which this bill shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.