They say you should save the best for last. So, Steve Badger, Rene Sigman and yours are making the final presentation at the Texas Association of Public Insurance Adjusters Spring Conference on March 2nd in Austin, Texas. Given our preparation, the title seems appropriate, Three for one and one for all! A lively discussion of hot topics in Texas claims and litigation.
One of the hot topics in this discussion will be a significant order from the Texas Insurance Commissioner that will not please many Texas public adjusters. The order appears to indicate – Badger claims it is clear – that the total chargeable amount is 10% of an adjusted amount and not an amount equal to 10% or less of the total payment amount. Here is what the relevant part of the order says:
2. Kueng indicated to the department that he would use the standard contract FIN535 provided by the department which specifically states that the fee cannot exceed 10 percent of the amount collected or adjusted.
3. The department received a complaint from JO, a PIA client of Kueng whose roof was in need of repair. The complaint alleged that Kueng had told JO that he would not take any commission on the funds already received from the insurance company. The complaint further alleged that Kueng charged JO 15 percent of the full amount of the settlement demand.
4. After an investigation, the department determined that Kueng had charged 3 clients a fee of 15 percent of the amount collected or adjusted in violation of the maximum 10 percent.
5. Kueng inserted additional language into the FIN535 contract provided by the Department when working with these three clients. The amended contract stated that his fee would be “15% of new money” in violation of the statute and deviating from the approved contract.
6. The addition of the “15% of new money” language resulted in Kueng receiving approximately $2,865 in excessive commissions from 3 consumers.
From Badger’s point of view, the Department of Insurance appears to indicate that the FIN535 contract does not allow a higher percentage to be charged greater than ten percent for any amount adjusted or recovered during the term of the public adjuster’s contract. That’s how I read the Word too. This is shocking to many public adjusters who regularly charge 25% on “new money not exceeding 10% of the total recovery.”
What is confusing is that I know TAPIA’s lobbyist and officials have had discussions and agreements with the Texas Department of Insurance to the contrary of this order. This is a rather important difference of opinion that will be discussed next week.
From a practical point of view and speaking as a lawyer, this issue needs to be clarified one way or another. The rules should be clear so that people can understand if they are breaking the law.
Here is the link for registering for TAPIA’s spring conference 2023. Hope to see you there.
The beauty is that through disappointment you can gain clarity, and with clarity comes conviction and true originality.