senate Bill S5183A

Relates to continuing education for licensed persons and qualifications for independent adjusters

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 14 / May / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE
  • 23 / May / 2014
    • AMEND AND RECOMMIT TO INSURANCE
  • 23 / May / 2014
    • PRINT NUMBER 5183A

Summary

Relates to claims for loss or damage to real property; creates continuing education requirements for licensed persons and qualifications for public and independent adjusters; allows for a revocation of licenses with an opportunity to reapply for such licenses.

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Bill Details

See Assembly Version of this Bill:
A908A
Versions:
S5183
S5183A
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add §2616, amd §§2108, 2110 & 2132, Ins L
Versions Introduced in Previous Legislative Cycles:
2011-2012: A3729A, S7802, A3729A
2009-2010: A7088, A7088
2007-2008: A6472, A6472

Sponsor Memo

BILL NUMBER:S5183A

TITLE OF BILL: An act to amend the insurance law, in relation to
claims for loss or damage to real property, continuing education for
licensed persons and qualifications for independent adjusters

PURPOSE:

This bill intends to curb the potential for fraud and abuse by
unscrupulous public or independent insurance adjusters. It does so by:

*Requiring continuing education for public and independent insurance
adjusters;

*Prohibiting an adjuster from receiving anything of value in exchange
for a referral of a potential client;

*Prohibiting any public or independent adjuster from having a
controlling interest in any construction, salvage or building
appraisal firm; and

*Allowing and setting the conditions under which the Insurance
Superintendent may revoke, suspend or refuse to renew the license of
public or independent adjusters.

SUMMARY OF PROVISIONS:

Section 1 adds a new § 2616 to the Insurance Law, to prohibit an
insurer from requiring repairs to be completed by any particular
entity or individual and from suggesting or recommending a particular
entity or individual unless specifically asked by the insured, in
which case the insurer would have to disclose any controlling or
business interest that it has in any entity or individual that it
recommends or suggests.

Sections 2 and 3 amend various subsections of § 2108 of the Insurance
Law, to require that independent adjusters participate in continuing
education.

Section 4 amends subsection (a) of § 2110 of the Insurance Law and
allows the superintendent of the Insurance Department to refuse to
renew, revoke, or suspend the license of any insurance agent,
insurance broker, reinsurance intermediary, insurance consultant or
adjuster that has violated any law regarding his or her professional
capacity, for a duration the superintendent deems appropriate. The
superintendent can also suspend or refuse to renew a license for a
duration that he or she determines adequate to discipline a violation
of this section.

Section 5 amends paragraph 2 of subsection (c) of § 2132 of the insur-
ance law to indicate that during the same calendar year biennial
licensing period, independent adjusters may use accumulated continuing
education credits to meet the requirements of similar classes of
licenses. In doing so, independent adjusters are provided the same
benefit as public adjusters.

JUSTIFICATION:


In the past decade, fraud committed by a small number of unscrupulous
public and independent adjusters has placed a black cloud over much of
the insurance industry. The actions of these few have caused undue
harm to both policy holders and adjusters who operate under the
highest professional standards. Most of those accused of committing
fraud have pled guilty, received fines and or jail time. To date, many
of them retain their New York State licenses.

This legislation will help the adjusting industry rid itself of "bad
apples" by imposing continuing education requirements and imposing
revocation and suspension guidelines for public and independent
adjusters alike.

The bill will also prevent conflicts of interest that may arise when
an insurer or adjuster has controlling interest in a construction
firm. For example, an insurance company may consult a sister
construction firm in which it has controlling interest -- to adjust
housing repair claims.

In return for the free adjustment, the construction firm may receive
the contract for the repairs or other construction. A conflict of
interest arises when the construction company receives such a contract
and inflates the estimate, resulting in higher premiums to policy
holders. This practice causes a public interest to be violated due to
the lack of objectivity.

The bill helps avoid such conflicts in three ways. First, it prevents
insurers from requiring repairs be made by a particular construction
firm. If recommendations are made that repairs be done by a particular
firm, the insurer must disclose to the insured whether the insurer has
a controlling interest in such firm. Second, it prohibits public and
independent adjusters from paying or giving gifts to people or
companies in exchange for potential client referral. Third, it
prohibits public or independent adjusters from having any controlling
interest in a construction, salvage or appraisal firm.

LEGISLATIVE HISTORY:

2004 - S.4752-B - Passed Senate A.6915 - Referred to Assembly
Insurance Committee
2003 - S.4752 - Referred to Senate Insurance Committee A.6915 Referred
to Assembly Insurance Committee
2002 - S.2067 - Referred to Senate Insurance Committee A.6009-A
Referred to Assembly Insurance Committee
2001 - S.2067 - Referred to Senate Insurance Committee A.6009-A
Referred to Assembly Insurance Committee
2000 - A.6592 - Referred to Insurance
2012: 01/26/11 referred to insurance 01/04/12 referred to insurance
06/05/12 amend and recommit to insurance 06/05/12 print number 3729a
06/12/12 reported referred to codes 06/20/12 reported referred to
rules 06/20/12 reported 06/20/12 rules report cal. 467 06/20/12
ordered to third reading rules cal. 467 06/21/12 passed assembly
06/21/12 delivered to senate 06/21/12 REFERRED TO RULES

FISCAL IMPLICATIONS:

None to the state.


EFFECTIVE DATE:

This act shall take effect on the first of January after it shall have
become law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5183--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 14, 2013
                               ___________

Introduced  by  Sen. MARTINS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance  --  recommitted
  to the Committee on Insurance in accordance with Senate Rule 6, sec. 8
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

AN ACT to amend the insurance law, in relation to  claims  for  loss  or
  damage to real property, continuing education for licensed persons and
  qualifications for independent adjusters

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new  section  2616
to read as follows:
  S 2616. CLAIMS FOR LOSS OR DAMAGE TO REAL PROPERTY; REPAIRS. (A) WHEN-
EVER  AN  INSURED  SUFFERS A LOSS OR DAMAGE TO REAL PROPERTY, NO INSURER
PROVIDING COVERAGE THEREFOR SHALL REQUIRE THAT REPAIRS BE COMPLETED BY A
PARTICULAR ENTITY OR INDIVIDUAL.
  (B) IN PROCESSING ANY SUCH CLAIM, THE INSURER SHALL NOT  RECOMMEND  OR
SUGGEST  REPAIRS  BE  MADE  BY  A PARTICULAR ENTITY OR INDIVIDUAL UNLESS
EXPRESSLY REQUESTED BY THE INSURED, IN  WHICH  CASE  THE  INSURER  SHALL
DISCLOSE  TO  THE INSURED WHETHER THE INSURER HAS A CONTROLLING OR BUSI-
NESS INTEREST IN ANY ENTITY OR INDIVIDUAL THAT THE INSURER RECOMMENDS OR
SUGGESTS.
  S 2. Paragraph 1 of subsection (f) of section 2108  of  the  insurance
law is amended to read as follows:
  (1)  The  superintendent shall, in order to determine the trustworthi-
ness and competency to act as an independent adjuster of each individual
applicant for such license, and of each proposed sub-licensee, except in
the case of a renewal license, require every such individual to take and
pass, to the satisfaction of  the  superintendent,  a  personal  written
examination.    AN  INDIVIDUAL SHALL NOT BE DEEMED QUALIFIED TO TAKE THE
EXAMINATION WITHOUT HAVING DEMONSTRATED BY EVIDENCE SATISFACTORY TO  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03815-03-4

S. 5183--A                          2

SUPERINTENDENT   THAT:   (A)  THE  INDIVIDUAL  POSSESSES  A  MINIMUM  OF
ONE-YEAR'S EXPERIENCE IN THE INSURANCE  BUSINESS,  WITH  INVOLVEMENT  IN
SALES,  UNDERWRITING,  CLAIMS, OR OTHER EXPERIENCE CONSIDERED SUFFICIENT
BY  THE  SUPERINTENDENT;  OR  (B)  THE INDIVIDUAL SUCCESSFULLY COMPLETED
FORTY HOURS OF FORMAL TRAINING IN A COURSE, PROGRAM OF  INSTRUCTION,  OR
SEMINARS   APPROVED   BY  THE  SUPERINTENDENT.  The  superintendent  may
prescribe the types of written examinations according  to  the  kind  or
kinds  of  insurance claims [which] THAT the applicant is to be licensed
to investigate and adjust.
  S 3. Subsection (r) of section 2108 of the insurance law, as added  by
chapter 264 of the laws of 1998, is amended to read as follows:
  (r) (1) The following continuing education requirements shall apply to
resident  and  non-resident  persons  licensed  as public OR INDEPENDENT
adjusters.
  (2) Resident and non-resident persons licensed as public OR  INDEPEND-
ENT  adjusters  and  any person previously so licensed whose license was
not in effect on the effective date  of  this  subsection  and  who  has
subsequently been relicensed pursuant to the provisions of this article,
shall biennially satisfactorily complete such courses or programs as may
be approved by the superintendent, as follows:
  (A)  Any  person holding a license as a public OR INDEPENDENT adjuster
shall,  during  each  full  biennial  licensing  period,  satisfactorily
complete courses or programs of instruction or attend seminars as may be
approved  by  the  superintendent  equivalent to fifteen credit hours of
instruction.
  (B) During the same calendar year biennial licensing period, a  licen-
see  may  use  accumulated  continuing  education  credits  to  meet the
requirements of similar classes of licenses including  those  authorized
by subsection (b) of section two thousand one hundred three, section two
thousand  one  hundred  four,  section two thousand one hundred seven of
this article with respect to general  insurance  consultants,  and  THIS
section [two thousand one hundred eight of this article] with respect to
public AND INDEPENDENT adjusters.
  (C)  Excess  credit  hours  accumulated  during any biennial licensing
period shall not carry forward to the next biennial licensing period for
that same class of license.
  (3) (A) The courses or programs of instruction successfully completed,
which shall be deemed to meet the superintendent's standards for contin-
uing education shall be:
  (i) Courses, programs of instruction or seminars, approved as to meth-
od and content by the superintendent, covering portions of the principal
branches of insurance related to the kinds of insurance covered  by  the
public  OR  INDEPENDENT adjusting license, and given by a degree confer-
ring college or university whose curriculum is registered with the state
education department at the time the person takes  the  course,  whether
such course be given as part of such curriculum or separately, or by any
other  institution,  association,  trade  association  or insurer, which
maintains equivalent standards of instruction and which shall have  been
approved for such purpose by the superintendent.
  (ii)  Continuing education as required by the state in which a non-re-
sident licensee resides and maintains an  office,  provided  the  super-
intendent  deems  them  equivalent  to  New  York  continuing  education
requirements. If the state in which the  non-resident  licensee  resides
and maintains an office has no continuing education requirements, or the
superintendent  does not deem them equivalent, the licensee must satisfy
New York continuing education requirements.

S. 5183--A                          3

  (B) The number of credit hours assigned to  each  of  the  courses  or
programs  of  instruction  set forth in paragraph one of this subsection
shall be determined by the superintendent.
  (4)  A  person  who  teaches any approved course of instruction or who
lectures at any approved seminar, and who is subject to these continuing
education requirements shall be granted the same number of credit  hours
as  would be granted to a person taking and successfully completing such
course, seminar or program, provided that such  credit  hours  shall  be
credited  only  once  per  approved course during any biennial licensing
period.
  (5) Every person subject to these  continuing  education  requirements
shall  furnish,  in  a  form satisfactory to the superintendent, written
certification attesting to the course or programs of  instruction  taken
and  successfully completed by such person, and executed by the sponsor-
ing organization or its authorizing representative.
  (6) (A) Any person failing to  meet  applicable  continuing  education
requirements shall not be eligible to renew the license.
  (B)  Any person whose license was not renewed shall not be eligible to
become relicensed during  the next biennial licensing period until  that
person  has  demonstrated to the satisfaction of the superintendent that
continuing education requirements for the last biennial licensing period
were met.
  (C) Any person whose license was not renewed pursuant to  subparagraph
(A)  of  this paragraph, who accumulates sufficient credit hours for the
prior licensing period to qualify for relicensing in the biennial period
following such non-renewal, may not apply those same credit hours toward
the continuing education requirements for the current biennial licensing
period.
  (7) (A) Any entity eligible to provide continuing  education  courses,
programs  of  instruction,  or  seminars  shall file for approval by the
superintendent on a  biennial  basis,  to  conform  with  its  areas  of
instruction, a provider organization application and a course submission
application for each course, program, and seminar.
  (B)  The  provider organization application shall include the names of
all instructors to be used during the contract period,  and  instructors
may  be  added  during  the  period  by notifying the superintendent and
paying the appropriate filing fee.
  (C) The completed applications shall be returned in a  timely  manner,
as  specified  by the superintendent with a non-refundable filing fee of
two hundred dollars per organization, fifty dollars per course, program,
and seminar, and fifty dollars per instructor.
  (D) Approval of the application shall be  at  the  discretion  of  the
superintendent.
  (8) Each licensee shall pay a biennial fee of ten dollars per license,
for  continuing  education  certificate filing and recording charges, to
the superintendent, or, at the direction of the superintendent, directly
to an organization under contract to provide continuing education admin-
istrative services.
  S 4. The opening paragraph of subsection (a) of section  2110  of  the
insurance law, as amended by chapter 499 of the laws of 2009, is amended
to read as follows:
  The  superintendent  may refuse to renew, revoke, or may suspend for a
period the  superintendent  determines  the  license  of  any  insurance
producer,  insurance  consultant, PUBLIC OR INDEPENDENT adjuster or life
settlement broker, if, after  notice  and  hearing,  the  superintendent
determines that the licensee or any sub-licensee has:

S. 5183--A                          4

  S  5.  Paragraph  2 of subsection (c) of section 2132 of the insurance
law, as amended by chapter 264 of the laws of 1998, is amended  to  read
as follows:
  (2)  During the same calendar year biennial licensing period, a licen-
see may  use  accumulated  continuing  education  credits  to  meet  the
requirements  of similar classes of licenses, as follows: (A) subsection
(a) of section two thousand one hundred three and section  two  thousand
one  hundred  seven  of  this  article  with  respect  to life insurance
consultants; or (B) subsection (b) of section two thousand  one  hundred
three,  section  two thousand one hundred four, section two thousand one
hundred seven of this article with respect to general insurance consult-
ants, and section two thousand one hundred eight of  this  article  with
respect to public AND INDEPENDENT adjusters.
  S  6. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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