Note: This guest blog post is by Holly Soffer, Esq., A policyholder’s attorney and general counsel to the American Association of Public Insurance Adjusters.
Unfortunately, we are singing the same old song again in Louisiana, and we have to report new administrative measures filed against public prosecutors for unlawful law and license violations. The Louisiana Department of Insurance (LDI) striving for this type of action has been dormant for several years. As a result, some public adjusters have eased concerns about a possible review by LDI of their behavior. This is a mistake. Even armed with all the correct types of documents, however, one can still fall outside the law regarding conduct.
Commissioner Donelon recently published an advisory letter [Advisory Letter 2022-01] who recited the law regarding the definition of public adjuster and then commented at the bottom:
Finally, it is important to note that public adjusters may not engage in activities that otherwise constitute legal activities, which include engaging the policyholder in a contingency fee arrangement, providing legal advice on insurance regulations or coverage issues, advising policyholders on issues and rights regarding redress. legal errors under the insurance, and negotiate agreements and directly contact insurers to discuss and evaluate the benefits of the customer’s insurance requirements. (my italics)
LDI, which relies on the law and this bulletin – which was specifically quoted to me at a recent meeting with the Enforcement Department regarding an administrative action against a public adjuster – has issued fines and decisions to discontinue and waive public adjuster as part of administrative action measures for unlawful enforcement of laws, which measures must then be reported to other states.
I’ve argued to the LDI that their own law requires public adjusters to send a message letter – which is a de facto communication with the insurer – but they made the difference between that letter and a message “to discuss and evaluate the benefits of the customer’s insurance claims.” More than a few of these measures have been taken in recent weeks.
Furthermore, as part of these measures, public adjusters have been cited for having websites that mention the word negotiate or in any way pretend to offer services that would violate the law, such as representing the interests of the insured, making the claim to the operator, or offer “no recovery, no fee.” This type of review is unexpected by many public adjusters.
Is your paperwork fully compatible? LDI has cracked down on unlicensed activity from public adaptation units when only one individual is mentioned as having a license. In addition, these insurance regulators carefully and methodically review files to detect incorrect activity, crawl inquiries and promises on websites, and check license information.
Possible solutions? We will soon create a panel discussion to discuss these issues and strategies for navigating this minefield. In the meantime, keep the following in mind:
- Immediately modify your site to say that the cumbersome services offered do not apply to Louisiana or place an asterisk next to the sections with a similar message.
- Once you communicate with the insurer, start each communication with: “I have reported to the insured that ……. and he / she / it has asked me to forward such a report to you as a courtesy ”, or similar language if that is what your insured client has asked you to do. This may not be bulletproof, but at the moment it’s a better strategy than just sending an email, letter or text message, which LDI has taken as misconduct. The Commissioner’s bulletin was a warning.
- Regarding the license issue – if you only have an individual license in Louisiana and not a company license, either obtain a company license or do not use the company’s email address, deposit money into your company account or use company letterhead. Using the company letterhead even once has recently resulted in an administrative action.
We can discuss other ideas in our panel discussion. So bring your questions and comments to the panel discussion!
And in the spirit of a Merlin blog, I’ll leave you with a quote:
When you reach the end of your rope, tie a knot and hang on.
– Franklin D. Roosevelt