The Honorable Joseph D. Hawkins Opinion NO. h-846 

Commissioner of Insurance 

State Board of Insurance Re: Authority of the 

1110 San Jacinto State Board of Insurance 

Austin, Texas 78786 to license public adjusters 

under article 21.07-4, 

Insurance Code. 

Dear Mr. Hawkins: 

You have requested our opinion regarding whether the 

State Board of Insurance may 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 included within 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 therefrom by 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 represent that 

he is an adjuster: 

(2) a salaried employee of an insurer 

who is not regularly engaged in the adjustment, investigation, or supervision of 

insurance claims: 

(3) persons employed only for the purpose 

of furnishing technical assistance to a 

licensed adjuster, including, but not 

limited to, photographers, estimators, 

private detectives, engineers, handwriting 

experts, and attorneys at law; 

(4) a licensed agent or general agent 

of an authorized insurer who processes 

undisputed and/or uncontested losses for 

such insurer under policies issued by said 

agent or general agent; 

(5) a person who performs clerical duties 

with no negotiations with the parties on 

disputed and/or contested claims; 

(6) any person who handles claims arising 

under life, accident and health insurance 

policies. 

Public adjusters are presently excluded from licensing by 

rule of the State Board of Ins.rance. 

Since a public adjuster i- not included within the 

definition of "adjuster" in section l(a), such a person is 

not required to comply with the mandatory licensing provisions of section 2(a), which are applicable only to every 

person who "hold[s] him% .f out to be an adjuster." The 

Board of Insurance is, honever, required to issue a license to 

any applicant who meets the licensing qualifications set forth 

in section 7: 

o. 3568 
. . *. 

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

Sec. 7. The commissioner shall license 

as an insurance adjuster 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 resident of 

this state, or is a resident of a state 

or country which will permit residents of 

this state to act as insurance adjusters 

in such other state or country; 

(3) if he is a nonresident of the 

United States, he has complied with all 

federal laws pertaining to employment or 

the transaction of business in the United 

States; 

(4) he is a trustworthy person; 

(5) he has had experience or special 

education or training with reference to 

the handling of loss claims under insurance contracts of sufficient duration 

and extent to make him competent to 

fulfill the responsibilities of an 

insurance adjuster: and 

(6) he has successfully passed an 

examination as required by the commissioner 

in accordance with this Act or has been 

exempted according to the provisions of 

this Act. 

Article 21.07-4 does not contain a requirement that a person 

must investigate or 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 licensing pr isions of article 21.07-4 of the 

Insurance Code, the State Bo&.;d of Insurance is required to 

issue a license to any person who complies with the statutory 

qualifications for obtaining an adjuster's license. 

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

SUMMARY 

Although a public adjuster is not required 

to comply with the licensing provisions of 

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 statutory qualifications for 

obtaining an adjuster's license. 

Very truly yours, 

Attorney General of Texas 

APPROVED: w 

Opinion Committee 

jwb 

D. 3570