PCI’s William Stander Testifies at Florida Rule Workshop on Adjuster Ethics, Licensure: Dispatch, Diligence Provisions of Ethics Code Should Apply to Public Adjusters Only

 

The Florida Department of Financial Services (“DFS”), Division of Insurance Agents and Agency Services held a Rule Development Workshop today, July 30, 2010, on the following proposed Rules relating to adjusters:

• 69B-220.001: Pre-Qualification and Licensure of Emergency Adjusters
• 69B-220.051: Conduct of Public Adjusters
• 69B-220.201: Ethical Requirements 

The proposed Rules amend Florida regulations relating to emergency adjuster licensure, conduct of public adjusters and public adjuster apprentices and ethical requirements for all adjusters.  

DFS Financial Administrator Eric Purvis presided over the Workshop, which he opened by noting that the Florida Association of Public Adjusters is challenging the Rules.  Interested parties were then recognized for comments.    

Among those testifying, Property Casualty Insurers Association of America Assistant Vice President and Regional Manager William Stander spoke in opposition to the proposed Rules, specifically, section 69B-220.201 (3) (f) regarding the requirement for all adjusters to respond specifically to requests for claims status within 15 days from the date of the request.   The section reads as follows:

(3) Code of Ethics. The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance. The following are standards of conduct that define ethical behavior, and shall constitute a code of ethics that shall be binding on all adjusters:

 (f) An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim.

Mr. Stander noted that performance measures do not belong in the adjuster code of ethics.  Further, Florida Statutes 626.9541 and 627.70121 already address claims communications.  The changes in (3) (f) are inconsistent with the statutory requirements.  He suggested that this regulation should apply only to public adjusters, because the referenced statutes address insurance company adjusters, not public adjusters. 

There was an apparent consensus among those presenting that section (3) (f) does not belong in the code of ethics.  It also was agreed that the section applies to all lines of business and likely will give rise to increased litigation.

Additionally, limiting these regulations only to property lines of business was suggested, since the proposed Rules seem to be focused on public adjuster issues. 

Concerns were expressed with the new language in the proposed Rules that partially defines the failure of an adjuster to perform services for the client as lack of dispatch and due diligence.  It was suggested that this language be limited to public adjusters.

DFS officials commented that communication issues have become widespread among adjusters, public adjusters and consumers, and were especially prevalent during the mediation process from claims arising out of the 2004 and 2005 hurricane seasons.  

Following public comments today, the DFS officials stated that they would consider the suggestions offered during today’s Workshop as well as submitted written comments for incorporation into the proposed Rules.

The record will remain open until August 12, 2010.  Should you have any written comments to add, please forward them to Trevor Mask at tmask@cftlaw.com by August 6, 2010.

The DFS is expected to makes changes to the proposed Rules and hold another public hearing.  New information will be provided as it becomes available.   

To view the meeting notice and proposed Rule texts, click here. 

 

Should you have any questions or comments, please contact Colodny Fass.