The Honorable Joseph D. Hawkins OpinionNO. h-846

Commissioner of Insurance State Board of Insurance Re: Authority of the 1110 San Jacinto State Board of Insurance Austin, Texas 78786 to licensepublic adjusters under article 21.07-4, InsuranceCode.
Dear Mr. Hawkins:
You have requested **our** opinion regardingwhether the State Board **of** Insurancemay license a person who investigates losses on behalf of an insured. Article 21.07-4, Texas Insurance Code, defines an 'adjuster' as

any person who, as an independent contractor, or as an employee of an independent contractor,adjustment bureau, association, insurance company or corporation, local recording agent, managing general aqent, or self-insured, investigates or adjusts losses on behalf of either an insurer or a self-insured, or any person who supervises the handling of claims. Sec. l(a). Such definition excludes perrons who investigate losses on behalf of an insured, someti s referred to as "public adjusters." Prior to the er-, tment of article 21.07-4, such persons were includedwithin tf+ definition of "insurance adjuster" contained in section (3) zf article 19.01, Title 122A, Taxation-General,V.T.C.S. That provision, however, was specifically repea! d by section 21 of article 21.07-4 of the Insurance Code.

**D. 3567** . II

!’

The Honorable Joseph D. Hawkins - page 2 W-846)

Although he is not included within the definition of "adjuster" in section l(a) of article 21.07-4,neither is a public adjuster expressly excepted therefromby section l(b), which provides:

(b) 'Adjuster' shall not include: (1)an attorney at law who adjusts insurance losses from time to time and incidental to the practice of law,and who does not advertise or representthat he is an adjuster: (2)a salaried employee of an insurer who is not regularly engaged in the adjustment, investigation, **or** supervisionof insurance claims: (3)persons employed only for thepurpose of furnishing technical assistanceto a licensed adjuster, including,but not limited to, photographers, estimators, private detectives, engineers,handwriting experts, and attorneys at law; (4)a licensed agent or generalagent of an authorized insurer who processes undisputed and/or uncontested lossesfor such insurer under policies issuedby said agent or general agent; (5)a person who performs clericalduties with no negotiations with thepartieson disputed and/or contested claims; (6) any person who handles claimsarising under life, accident and health insurance policies. Public adjustersare presently excluded from licensing by rule of the State Board of Ins.rance. Since a public adjuster i- not includedwithin the definition of "adjuster" in section l(a), such a person is not required to comply with the mandatory licensingprovisions of section 2(a), which are applicableonly to every person who "hold[s] him% .fout to be an adjuster." The Board of Insurance is, honever, required to issue a license to any applicantwho meets the licensing qualificationsset forth in section 7:

o. 3568. . *.

The Honorable Joseph 0. Hawkins - page 3 (H-8461

Sec. 7. The commissioner shall license as an insuranceadjuster only an individual who has otherwise complied with this Act, and who has furnished evidence satisfactory to the board that: (1)he is at least 18 years of age: (2)he is a bona fide residentof this state,or is a resident of a state or countrywhich will permit residentsof this state to act as insuranceadjusters **in** such other state or country; (3)if he is a nonresident of the United States, he has compliedwith all federal lawspertaining to employmentor the transactionof business in the United States; (4)he is a trustworthy person; (5)he has had experience or special educationor training with reference to the handlingof loss claims under insurance contracts of sufficientduration and extent to make him competent to fulfill the responsibilitiesof an insuranceadjuster: and (6)he has successfullypassed an examinationas required by the commissioner in accordancewith this Act or has been exempted according to the provisionsof thisAct. Article 21.07-4 does not contain a requirementthat a person must investigateor adjust losses on behalf of **an** insurer or a self-insured in order to obtain a license. Thus, in our opinion, although a public adjuster is not required to comply with the licensingpr isionsof article 21.07-4 of the Insurance Code, the State Bo&.;d of Insurance is required to issue a license to any person who complieswith the statutory qualifications for obtaining an adjuster's license.

p. 3569The Honorable Joseph D. Hawkins - page 4 (H-8461

SUMMARY Although a public adjuster is not required to comply with the licensing provisionsof article 21.07-4 of the Insurance Code, the State Board of Insurance is required to issue a license to any person who complies with the statutoryqualifications **for** obtaining an adjuster's license. Very truly yours,

Attorney General of Texas
APPROVED: w

Opinion Committee jwb

**D. 3570**