The Florida Department of Financial Services regulates those licensed to adjust claims in Florida. One of those licensed, is a long time friend and a person very familiar with the regulatory process, Mark Boardman. Boardman recently filed a unique Petition for Declaratory Statement with the Florida Department of Financial Services, asking fifteen pointed questions regarding the propriety of various property adjustment practices that are common in the field.
Those fifteen questions are:
QUESTION 1: If the contractor acquiesces to a lesser scope of work or unit cost, will the contractor have adjusted the claim on behalf of the insured?
QUESTION 2: If the contractor engages in any discussion with the insurance adjuster regarding the scope of work to be performed and the unit costs of the work, will the contractor be considered to have negotiated with the adjuster on behalf of the insured?
QUESTION 3: What is considered to be an "insurance claim form" as that term is used in Section 626.854(1), Florida Statutes?
QUESTION 4: Is a contract for repairs between a contractor and an insured considered "any other thing of value" as that term is used in Section 626.854(1), Florida Statutes?
QUESTION 5: How does the Department define "in any manner," as that term is used in Section 626.854(1), Florida Statutes?
QUESTION 6: If the contractor agrees to a reduced scope of work and a commensurate reduction in the overall cost of repairs, has the contractor "effectuated a settlement" with the insurance company as that term is used in Section 626.854(1), Florida Statutes?
QUESTION 7: If, in agreeing to the changes to the scope of work recommended by the insurance adjuster, the contractor has "effectuated a settlement" of the insured’s claim, is the contractor in violation of the provisions of Section 626.854(1), Florida Statutes?
QUESTION 8: If, in discussing the scope of work included in the claim with the insurance adjuster, the contractor has engaged in "negotiating" the claim on behalf of the insured, is the contractor in violation of the provisions of Section 626.854(1), Florida Statutes?
QUESTION 9: Is the contractor in violation of the provisions of Section 626.854(1), Florida Statutes, if he advertizes that he will work with the insurance company to reach a settlement of any claims?
QUESTION 10: If the insurance adjuster is aware that the contractor is not a licensed public adjuster, is the insurance adjuster in violation of any Department rules or statutes by continuing to negotiate a settlement of the claim with the contractor?
QUESTION 11: As a licensed public adjuster, Petitioner uses printed materials such as letters, flyers or door hangers to solicit clients. In order to place the flyers, brochures, or door hangers on the insured’s property, he must physically go onto the property. Petitioner is concerned that if he uses such printed material to contact an insured person within the first 48 hours after a casualty, he may run afoul of the Court’s ruling and the Department’s "executive construction" of Section 626.854(6), Florida Statutes, and be subject to disciplinary action. Thus, the following question: If, in the process of placing a flyer or door hanger on the premises of an insured person within the first 48 hours after a casualty, Petitioner is approached by an individual who may or may not be the insured or a member of the insured’s family, is Petitioner allowed to talk to the individual(s) about his services once it is discovered that the person is the insured?
QUESTION 12: If, in the process of placing a flyer, brochure or door hanger on the premises of an insured person within the first 48 hours after a casualty, Petitioner is approached by an individual who may or may not be the insured or a member of the insured’s family, is Petitioner allowed to talk to the individual(s) about his services once it is disclosed that the person is not the insured, or is this considered to be an "indirect contact" with the insured?
QUESTION 13: Rule 69B-220.201, F.A.C., entitled "Ethical Requirements," provides, in pertinent part:
(a) Violation of any provision of this rule shall constitute grounds for administrative action against the licensee.
(3) Code of Ethics. The work of adjusting insurance claims engages the public trust. The adjuster shall put the duty for fair and honest treatment of the claimant above the adjusters own interests in every instance. The following are standards of conduct that define ethical behavior, and shall constitute a code of ethics that shall be binding on all adjusters.
(g) An adjuster shall promptly report to the Department any conduct by any licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order.
The term “licensed insurance representative: is not defined by rule or statute. Please define.
QUESTION 14: Does the term “licensed insurance adjuster” include all types and classes of insurance adjusters (company, independent or public), subject to Chapter 626, Florida Statutes, or just licensed representatives of insurance companies?
QUESTION 15: In the event that Petitioner encounters a contractor negotiating a settlement with an insurance company representative/adjuster for a specific task for an insured person:
a. Is petitioner required under Rule 69B-220.201, F.A.C., to report the matter to the Department?
b. Is the petitioner required under Rule 69B-220.201, F.A.C., to report the suspected activities of the contractor to any other entity? Is so, what entity?
The issues are significant, especially regarding the adjustment functions of contractors. In the field, contractors are adjusting claims for insurers and for insureds. The Department may not realize this, but everybody involved in the adjustment business knows that the restoration construction industry is in bed with insurers. Those same contractors often tell insureds that they will negotiate with the insurance company and "do the job" for whatever the insurer will pay.
The answers to these questions are important to insurers and insureds. I am as curious as anybody to learn what they will be.