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Adjuster State Licensing Standardization – How soon can it come?

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Written by Scott Shepard, CPCU, PMP Practice Director for Property & Casualty Solutions at @VUESoftware

Are you an adjuster or an insurance organization planning to obtain an adjuster license(s) within a state or in multiple state jurisdictions? If so, you’ve likely encountered the variety of adjuster licensing requirements that vary state by state.

Some states, such as Ohio and New Jersey have no adjuster license requirements.  Ohio only requires a Public adjuster license.  In the case of New Jersey, employees of insurance companies handling claims are not subject to licensure which means an adjuster can come into the state and adjudicate claims without a license.

However, in Ohio and similar non-license states where an adjuster wants to adjudicate claims in a state with licensing requirements, that adjuster will need to identify and obtain a license from a “Designated Home State” (DHS). The DHS is a non-resident state but will qualify the adjuster for licensing purposes.  Some states such as California do not allow DHS reciprocal licensing privileges.

States such as Indiana, Texas, New York, and California require taking a pre-licensing course and passing the state examination.  Once the exam has been passed then the adjuster in those states need to complete the adjuster application and satisfy additional requirements.

California has rigorous adjuster requirements that include: two years of certified experience with insurance adjusting, a $2,000.00 insurance adjuster bond, and passing the written exam administered by the Department of Insurance. The fees are: License $234, exam $59, and fingerprint $58.30 if done at CDI exam site or $68.95 if done at a state authorized vendor. Other states allow reciprocal recognition of the licensing from another state but each state requirements need to be checked.

There are other state examples that further indicate the variability between states and the challenge for adjuster licensing.   Adjuster catastrophe storm duty assignments often require rapid emergency approval by state which is an additional challenge due to state disparities. What can be done to resolve multiple state variances particularly as adjusters find themselves working across state lines more frequently?

The answer is state model laws and acceptance that provide consistency.  NAIC has been providing model laws to states for acceptance, and NIPR has become the repository for state adjuster licensing similar to what is currently done for producer license state tracking. This is work in progress and more needs to be done.

The Securities & Insurance Licensing Association (SILA) (whose purpose is to “bring together licensing experts for licensing and registration of agents, agencies, adjusters, brokers, and others), a key supporter of adjuster standardization has taken the following stand:

“It is critical to bring all adjuster licensing states (or as many as possible) under one approval process for emergency adjusters. States must determine collectively exactly what is required to assure appropriate control over the emergency adjuster approval process. Once those objectives are identified and documented it should be easier to build a more efficient process that supports rapid deployment of claims adjusters to the affected area.”

The increased need for storm duty adjusters to support multiple state adjudication activities with short lead time for onboarding, along with needs for simple consistent adjuster licensing will better serve insureds, claimants, and insurers.  In summary it is a matter of time before standard state adjuster licensing becomes the norm for the benefit of the industry.

About the Author:

Scott Shepard is known for his expertise in property and casualty (P&C) insurance as well as his project management skills. Mr. Shepard has over 25 years of P&C insurance information technology (IT) experience in personal, commercial and specialty lines of business.

Mr. Shepard worked for Exigen Insurance Solutions, Nationwide, Liberty Mutual, and over 10 years at Ernst & Young. He has managed and facilitated P&C software implementations — including policy, claims and billing — for major insurance carriers.



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