Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 50 - INSURANCE PRODUCERS AND OTHER NON INSURER LICENSEES › Part 4 - Insurance Claim Adjusters › Section 230-RICR-20-50-4.11 - Conduct - Public Adjusters

Current through June 14, 2024
A. In addition to
				  the requirements of §
										4.9   of this Part, all Public Adjusters must also
				  comply with the following:
1. A person acting
				  as a public adjuster shall not misrepresent to a claimant that he or she is an
				  adjuster representing an insurer in any capacity, including acting as an
				  employee of the insurer or acting as an independent adjuster unless so
				  appointed by an insurer in writing to act on the insurer's behalf for that
				  specific claim or purpose. A public adjuster is prohibited from charging that
				  specific claimant a fee when appointed by the insurer and the appointment is
				  accepted by the adjuster.
2. No
				  public adjuster shall split any commission, service fee or other valuable
				  consideration for performing adjusting services to any person unless that
				  person is required to be licensed under R.I. Gen. Laws Chapter 27-10.
3. In the event of a catastrophic disaster,
				  there shall be limits on catastrophic fees. No public adjuster shall charge,
				  agree to or accept as compensation or reimbursement any payment, commission,
				  fee, or other thing of value equal to more than ten percent (10%) of any
				  insurance settlement or proceeds. No public adjuster shall require, demand or
				  accept any fee, retainer, compensation, deposit, or other thing of value, prior
				  to settlement of a claim.
4. Public
				  adjusters shall ensure that all contracts for their services are in writing and
				  contain the following terms:
a. Legible full
				  name of the adjuster signing the contract, as specified in Department
				  records;
b. Permanent home state
				  business address and phone number;
c. Department license number;
d. Title of "Public Adjuster
				  Contract";
e. The insured's full
				  name, street address, insurance company name and policy number, if known or
				  upon notification;
f. A description
				  of the loss and its location, if applicable;
g. Description of services to be provided to
				  the insured;
h. Signatures of the
				  public adjuster and the insured;
i.
				  Date contract was signed by the public adjuster and date the contract was
				  signed by the insured;
j. Full
				  salary, fee, commission, compensation or other considerations the public
				  adjuster is to receive for services.
k. The contract may specify that the public
				  adjuster shall be named as a co-payee on an insurer's payment of a claim.
(1) If the compensation is based on a share
				  of the insurance settlement, the exact percentage shall be specified.
(2) Initial expenses to be reimbursed to the
				  public adjuster from the proceeds of the claim payment shall be specified by
				  type, with dollar estimates set forth in the contract and with any additional
				  expenses first approved by the insured.
(3) Compensation provisions in a public
				  adjusting contract shall not be redacted in any copy of a contract provided to
				  the Department upon request. Such a redaction shall constitute an omission of
				  material fact.
5. If the insurer, not later than seventy-two
				  (72) hours after the date on which the loss is reported to the insurer, either
				  pays or commits in writing to pay to the insured a policy coverage limit(s),
				  the public adjuster shall, with respect to that coverage:
a. Not receive a commission consisting of a
				  percentage of the total amount paid by an insurer to resolve a claim;
b. Inform the insured that loss recovery
				  amount might not be increased by insurer; and
c. Be entitled only to reasonable
				  compensation from the insured for services provided by the public adjuster on
				  behalf of the insured, based on the time spent on a claim and expenses incurred
				  by the public adjuster, until the claim is paid or the insured receives a
				  written commitment to pay from the insurer.
6. A public adjuster shall provide the
				  insured a written disclosure concerning any direct or indirect financial
				  interest that the public adjuster has with any other party who is involved in
				  any aspect of the claim, other than the salary, fee, commission or other
				  consideration established in the written contract with the insured, including
				  but not limited to any ownership of, other than as a minority stockholder, or
				  any compensation expected to be received from, any construction firm, salvage
				  firm, building appraisal firm, motor vehicle repair shop, or any other firm
				  which provides estimates for work, or that performs any work, in conjunction
				  with damages caused by the insured loss on which the public adjuster is
				  engaged. The word "firm" shall include any corporation, partnership,
				  association, joint-stock company or person.
7. A public adjuster contract may not contain
				  any contract term that:
a. Allows the public
				  adjuster's percentage fee to be collected when money is due from an insurance
				  company, but not paid, or that allows a public adjuster to collect the entire
				  fee from the first check issued by an insurance company, rather than as
				  percentage of each check issued by an insurance company;
b. Requires the insured to authorize an
				  insurance company to issue a check only in the name of the public
				  adjuster;
c. Imposes collection
				  costs or late fees; or
d. Precludes
				  any party from pursuing civil remedies.
8. Prior to the signing of the contract the
				  public adjuster shall provide the insured with a separate disclosure document
				  regarding the claim process that states:
a.
				  Property insurance policies obligate the insured to present a claim to his or
				  her insurance company for consideration. There are three (3) types of adjusters
				  that could be involved in that process. The definitions of the three types are
				  as follows:
(1) "Company adjuster" means the
				  insurance adjusters who are employees of an insurance company. They represent
				  the interest of the insurance company and are paid by the insurance company.
				  They will not charge you a fee.
(2)
				  "Independent adjuster" means the insurance adjusters who are hired on a
				  contract basis by an insurance company to represent the insurance company's
				  interest in the settlement of the claim. They are paid by your insurance
				  company. They will not charge you a fee.
(3) "Public adjuster" means the insurance
				  adjusters who do not work for any insurance company. They work for the insured
				  to assist in the preparation, presentation and settlement of the claim. The
				  insured hires them by signing a contract agreeing to pay them a fee or
				  commission based on a percentage of the settlement, or other method of
				  compensation.
b. The
				  insured is not required to hire a public adjuster to help the insured meet his
				  or her obligations under the policy but has the right to do so.
c. The public adjuster is not a
				  representative or employee of the insurer.
d. The salary, fee, commission or other
				  consideration is the obligation of the insured, not the insurer.
9. The contract shall be executed
				  in duplicate to provide an original contract to the public adjuster, and an
				  original contract to the insured. The public adjuster's original contract shall
				  be available at all times for inspection without notice by the
				  Department.
10. The public adjuster
				  shall provide the insurer a notification letter, which has been signed by the
				  insured, authorizing the public adjuster to represent the insured's
				  interest.
11. The insured has the
				  right to rescind the contract within three (3) business days after the date the
				  contract was signed. The rescission shall be in writing and mailed or delivered
				  to the public adjuster at the address in the contract within the three (3)
				  business day period.
12. If the
				  insured exercises the right to rescind the contract, anything of value given by
				  the insured under the contract will be returned to the insured within fifteen
				  (15) business days following the receipt by the public adjuster of the
				  cancellation notice.
13. A public
				  adjuster who receives, accepts or holds any funds on behalf of an insured,
				  towards the settlement of a claim for loss or damage, shall deposit the funds
				  in a non-interest-bearing escrow or trust account in a financial institution
				  that is insured by an agency of the federal government in the public adjuster's
				  home state or where the loss occurred.
14. A public adjuster shall maintain a
				  complete record of each transaction as a public adjuster. The records required
				  by this section shall include the following:
a. Name of the insured;
b. Date, location and amount of the
				  loss;
c. Copy of the contract
				  between the public adjuster and insured;
d. Name of the insurer, amount, expiration
				  date and number of each policy carried with respect to the loss;
e. Itemized statement of the insured's
				  recoveries;
f. Itemized statement
				  of all compensation received by the public adjuster, from any source
				  whatsoever, in connection with the loss;
g. A register of all monies received,
				  deposited, disbursed, or withdrawn in connection with a transaction with an
				  insured, including fees transfers and disbursements from a trust account and
				  all transactions concerning all interest-bearing accounts;
h. Name of public adjuster who executed the
				  contract; and
i. Name of the
				  attorney representing the insured, if applicable, and the name of the claims
				  representatives of the insurance company.
15. A public adjuster is obligated, under his
				  or her license, to serve with objectivity and complete loyalty to the interest
				  of his client alone; and to render to the insured such information, counsel and
				  service, as within the knowledge, understanding and opinion in good faith of
				  the licensee, as will best serve the insured's insurance claim needs and
				  interest.
16. A public adjuster
				  shall not solicit, or attempt to solicit, an insured during the progress of a
				  loss-producing occurrence, as defined in the insured's insurance
				  contract.
17. A public adjuster
				  shall not permit an unlicensed employee or representative of the public
				  adjuster to conduct business for which a license is required.
18. A public adjuster shall not have a direct
				  or indirect financial interest in any aspect of the claim, other than the
				  salary, fee, commission or other consideration established in the written
				  contract with the insured, unless full written disclosure has been made to the
				  insured as set forth in §§
											14.1(A)(6)   and/or (A)(21) of this
				  Part.
19. A public adjuster shall
				  not acquire any interest in salvage of property subject to the contract with
				  the insured unless the public adjuster obtains written permission from the
				  insured after settlement of the claim with the insurer as set forth in
				  §§
											14.1(A)(6)   and/or (A)(21) of this Part.
20. The public adjuster shall abstain from
				  referring or directing the insured to obtain needed repairs or services in
				  connection with a loss from any person, unless disclosed to the insured:
a. With whom the public adjuster has a
				  financial interest; or
b. From
				  whom the public adjuster may receive direct or indirect compensation for the
				  referral.
21. The public
				  adjuster shall disclose to an insured if he or she has any interest or will be
				  compensated by any construction firm, salvage firm, building appraisal firm,
				  motor vehicle repair shop or any other firm that performs any work in
				  conjunction with damages caused by the insured loss. The word "firm" shall
				  include any corporation, partnership, association, joint-stock company or
				  individual.
22. Any compensation or
				  anything of value in connection with an insured's specific loss that will be
				  received by a public adjuster shall be disclosed by the public adjuster to the
				  insured in writing including the source and amount of any such
				  compensation.
23. A public adjuster
				  shall not enter into a contract or accept a power of attorney that vests in the
				  public adjuster the effective authority to choose the persons who shall perform
				  repair work.
24. A public adjuster
				  shall ensure that all contracts for the public adjuster's services are in
				  writing and set forth all terms and conditions of the engagement.
25. A public adjuster may not agree to any
				  loss settlement without the insured's knowledge and consent.
26. The contract entered into by a public
				  adjuster shall not be construed to prevent an insured from pursuing any civil
				  remedy after the three-business day revocation or cancellation
				  period.