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State licensing requirements delayed adjusters from responding to claims


Licensing reciprocity was a factor that slowed response times by out-of-state-adjusters after Superstorm Sandy, said David Farber, counsel to the American Association of Independent Claims Professionals and a partner at King & Spalding L.L.P. in Washington.

Any adjuster needs a license from New York state to work there, Mr. Farber said.

Because of the sheer volume of adjusters needed after Sandy, many were called from outside the state to help.

“New Jersey doesn't license independent or company adjusters,” said a spokesman for the New Jersey Department of Banking and Insurance. Instead, New Jersey relies on insurers to supervise adjusters and make sure they comply, he said.

As of the end of September 2013, the most recent figures available, 98% of all nonflood-related claims had been settled in New Jersey, the spokesman said.

“In Sandy, obviously you needed thousands of adjusters. This was all hands on deck,” said Mr. Farber. The huge influx temporarily jammed the licensing system in New York, slowing adjusters' ability to get to the claim.

To avoid such problems in the future, the claims association is supporting legislation — The Claims Licensing Advancement for Interstate Matters Act, H.R. 2156 — that has been introduced in the U.S. House, said Mr. Farber.

The bill, which has been in committee since last May, would give states four years to voluntarily “adopt uniform educational, training and ethical criteria needed for the proper licensing of independent claims adjusters,” the claims association said.

The bill also calls for the National Association of Insurance Commissioners to develop a multistate exam to test those criteria.

The NAIC did not respond to requests for comment.