Alliance Urges South Carolina Governor to Sign Adjuster Licensing Bill

The Alliance of American Insurers says it is urging South Carolina Governor James Hovis Hodges to sign Senate Bill 1163, legislation that would require public adjusters to procure a license from the state Department of Insurance.

The legislation passed the state Legislature and went to the governor's desk earlier this month.

"…this bill is a significant improvement upon the current law, which requires the licensing of insurance company staff adjusters, but does not provide for the licensing of public adjusters," said Bob Herlong, assistant vice president for the Alliance's Southeast region.

"This bill will place all adjusters on the same level playing field, and reassure consumers that more consistency among all adjusters will be evident in the claims settlement process."

The final version of the bill includes the following provisions:

• Public adjusters shall have no financial interest in any aspect of an insured's claim, other than their salary, fee or commission.
  
• Public adjusters shall not refer or direct any insured needing repairs or other services to any person with whom the public insurance adjuster has a financial interest.
  
• Public adjusters shall not prevent or attempt to dissuade an insured from communicating with an insurer or the insurer's adjuster.
  
• Public adjusters shall not engage in any conduct that constitutes the unauthorized practice of law.
  
• An insured shall have until the close of business on the fifth business day after signing the contract to rescind the agreement with the public adjuster.
  
• An individual who violates the provisions of the law would be guilty of a felony, and upon conviction, would be fined or imprisoned not more than two years, or both.

"The Alliance supports the licensing of public adjusters. Public adjusters neither receive the same training nor are they subject to the same legal and business constraints as insurance company staff adjusters," said Kirk Hansen, Alliance director of claims.

"Unlike company adjusters, trained and experienced managers do not necessarily supervise public adjusters," Hansen said. "Staff adjusters have their activities regulated through the Unfair Claims Practices Laws and regulations, but no such sanctions accrue to public adjusters. Public adjusters should be regulated in order to protect the public from fraud and incompetence."

Currently, 31 states require public adjusters to be licensed.