Chip Merlin and Stephanie Lee

Public adjuster Stephanie Lee approached me at the Win The Storm conference with an intriguing question—could she be appointed by a contractor holding an Assignment of Claim as the contractor’s appraiser in an appraisal? My first thought, and I bet it is the same thought most reading this blog, was “why not?”

Most states only require a person to be of sound mind and body, not employed by either party or related by blood and without a direct financial interest in the outcome, to be an appraiser. There are many variants to this rule, usually involving bias, but this is the one relevant for this discussion.

Despite appraisals routinely occurring where a public adjuster is selected as an appraiser by a contractor who holds an Assignment of Claim, Stephanie Lee’s problems started when the insurance company complained to the Oklahoma Insurance Department. She received this letter:

The Oklahoma Insurance Department seems to miss the fact that Lee was not hired as a public adjuster, but as an appraiser. Appraisers to a property insurance appraisal do not need a license. They generally have to satisfy the rule stated earlier.

In response, Lee hired counsel who filed a petition for an administrative hearing to correct the mistaken letter Order. The Petition asked for the following relief:

Respondent demands a hearing by the Insurance Commissioner on the aggrieved matter at a time and place certain, that the Insurance Commissioner issue the Subpoena Duces Tecum and Ad Testificandums stated hearing, that the Respondent be afforded all rights under the Administrative Procedures Act, that the Insurance Commissioner issue a final agency order with findings of fact and conclusions of law, and that the Insurance Commissioner rescind the Letter and all actions taken by OID against the Respondent.

The Oklahoma Insurance Department refused to grant an administrative hearing. Lee filed a lawsuit in Oklahoma state court seeking relief from the enforcement letter. The lawsuit made the following very strong allegation:

The Oklahoma Insurance Department and insurance carriers are acting as coconspirators in denying the public legal rights, stalling claims, and preventing policy holders from getting even basic repairs done to their property.

In addition to the army of lawyers and adjusters in their ranks, insurance carriers now have the added firepower, intimidation, and police power of a state agency.

The coordinated attack is detrimental to public policy—especially those on a fixed income who do not have the power, money and political influence that insurance carriers have.

Glen Mulready is the Oklahoma insurance commissioner. His political ads say he is for Oklahomans. But, he lists his experience as one for insurers:

Glen Mulready is a long-time insurance professional and private sector businessman who has worked with businesses of all sizes. Mulready spent 13 of his 35 years of experience in the insurance industry working on the executive teams of Oklahoma’s two largest health insurance companies.

We will keep you informed of developments in this case. It will be interesting to see if this case is allowed to explore another revolving door of insurance company executives running a state insurance department and protecting insurers interests over policyholder interests.

Thought For The Day

A fox should not be on the jury at a goose’s trial.
—Thomas Fuller

  • Nancy Dominguez

    This is a great post and kudos to Ms Lee Chip, maybe you can include an update during your presentation at the upcoming FAPIA Spring conference? There will be a lot of Public Insurance Adjusters there who will be following this extremely relevant story. Thanks for everything you do for the industry Chip!! #publicadjustersrock #fapia

  • shirley heflin

    Dear Chip:

    I’m stunned by the ignorance of the OK Insurance Commissioner’s Office in this regard!! Thank goodness Ms. Lee has the wherewithal and gumption to make this right! Think of all the people who do not have the money to hire an Attorney to file a Petition, lawsuit, etc., regarding this (namely the Insured, contractor, etc.).

    Looking forward to this wrong being made right!

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL

  • Shirley’s use of “ignorance” is gracious, in my opinion. It appears more likely as stated in Lee’s complaint – they are coconspirators, who know exactly what they are doing. I’m very much looking forward to the updates on this.

  • Upon being named an appraiser, I frequently receive calls from carriers asking for a copy of my Public Adjusting contract. It usually takes at least two phone conversations for them to understand I’m acting as an appraiser.
    I’ve never used my Oklahoma PA license before. Perhaps that is a good thing because this could have easily happened to me.