NAPIA’s leadership is meeting as I write this. I hope one question finds its way into their discussions: What if NAPIA’s Code of Conduct, Jeffrey Major’s proposed Public Adjuster Code of Professional Conduct, and the NAIC Public Adjuster Licensing Model Act are not competitors at all? Public adjusting does not need a contest over whose code is best. It needs the best parts of all three.
NAPIA has history, membership, credibility, governance, and organizational reach. Major’s coalition has produced a far more detailed statement of how professional public adjusting should be performed. The NAIC Model supplies licensing architecture, financial safeguards, recordkeeping requirements, and governmental enforcement concepts.
A revised version of Major’s Code could become NAPIA’s next-generation professional standard, supported by an independent complaint and disciplinary system and coordinated with state regulators. NAPIA could provide an established institutional home without controlling disciplinary decisions involving its own members or leadership. Major’s coalition could remain an independent standards council with meaningful participation by consumers and people outside the public adjusting trade.
The public adjusting profession needs higher entry requirements, demanding practice standards, and fair enforcement. Major’s Code principally addresses the second. The NAIC Model partially addresses the first and third. NAPIA may be the organization best positioned to bring all three together.
That makes more sense to me than protecting the status quo or turning three worthwhile efforts into another insurance-industry turf war.
A Compass, a Field Manual, and a Regulatory Framework
The three documents are different because they were written for different purposes.
NAPIA’s Code of Conduct is a professional compass. Its twelve principles require fairness, proper solicitation, honesty, reasonable and transparent fees, competence, respect for the boundaries of legal practice, avoidance of repair and salvage conflicts, professional cooperation, responsible communications, and continuing education.
Those are sound principles. NAPIA has been promoting them for decades, and its experienced members have done more than any other public adjuster organization to advance education, professional conduct, and the recognition of public adjusting as a profession.
The important point is that a compass tells us the direction. It does not always tell us what to do or the decision to make at the next difficult intersection.
Jeff Major’s proposed Public Adjuster Code of Professional Conduct is closer to a field manual. It explains professional responsibility in much more operational terms. It requires knowledge, experience, skill, thoroughness, preparation, supervision, and continuing education. It addresses catastrophe solicitation, inspections, evidentiary support, estimates, inventories, dispute communication, client reporting, conflicts of interest, professional liability insurance, civility, and settlement authority.
It also attacks the “bait-and-switch” arrangement in which a public adjuster signs a policyholder to a percentage contract but performs little public adjusting and simply sends the matter to a lawyer, appraiser, or somebody else while retaining a fee interest. Calling that conduct improper is not an attack on public adjusters. It protects those who actually perform the work.
The NAIC Public Adjuster Licensing Model Act is something else. It is a proposed regulatory framework for state legislatures. It addresses licensing, examinations, background checks, apprentices, business entities, continuing education, bonds, fees, contracts, cancellation rights, trust accounts, record retention, fines, hearings, suspension, and license revocation.
The NAIC Model itself is not law. It becomes enforceable only to the extent a state adopts it. Some provisions, including uniform fee caps and restrictions on compensation, reflect debatable policy choices that may make certain claims more difficult for policyholders to pursue. It should not be accepted as gospel merely because the NAIC published it.
Still, it contains regulatory machinery that neither NAPIA’s short Code nor Major’s proposed professional standards currently provide.
A compass, a field manual, and a regulatory framework are not substitutes for one another. Used together, they can take the profession much farther than any one of them can go alone.
Major’s Code Was Not Written on a Blank Page, and That Is a Strength
Many provisions in Major’s Code build upon language found in NAPIA’s Code and the NAIC Model Act. This should not be hidden, but neither should it be treated as criticism.
The duties of complete loyalty, competence, proper solicitation, freedom from repair and salvage interests, client consent to settlements, and avoidance of financial conflicts have developed over decades. A serious new professional code should preserve proven principles rather than invent new language merely to appear original.
Major’s coalition took those foundations and added practical duties that the older standards do not adequately address. What does competent claim preparation require? Who supervises inexperienced employees? When must a public adjuster obtain qualified technical assistance? What factual support should exist before damage is asserted? How should disputed claim components be communicated? What responsibility does the public adjuster have for estimates, inventories, and calculations?
Those are not academic questions. They are the daily work of public adjusting.
Jeff also assembled public adjusters, policyholder attorneys, insurance defense attorneys, subject-matter experts, consumer advocates, nonprofit leaders, and others who do not always agree. He invited criticism and kept revising the work. Consensus is easy when nobody says anything important. Jeff’s proposal says important things.
The Missing Word Is Enforcement
David Herring responded to the discussion with a pointed observation:
“[S]tandards without enforcement are just marketing. [T]he question is who watches the watchers, and whether the discipline mechanism actually protects policyholders or just the PAs who already behave.”
This is the question that should drive the next stage. A voluntary code will naturally attract reputable public adjusters who are already trying to meet high standards. Those causing the most damage may refuse to join. If adherence becomes merely another logo for a website or sales presentation, the Code may help good public adjusters market themselves without doing much to protect policyholders from the bad ones.
A private standards organization is not powerless. It cannot revoke a state license, but it can investigate complaints, suspend or revoke a professional credential, remove a firm from its public directory, publish disciplinary decisions, require corrective education, and refer evidence of legal violations to insurance regulators.
For that system to deserve confidence, the complaint process must be transparent and independent. The accused public adjuster must receive notice, an opportunity to respond, an impartial hearing, proportionate sanctions, and a meaningful appeal. Complainants and witnesses need confidentiality and protection from retaliation. The people deciding cases must disclose conflicts and recuse themselves when appropriate.
Most importantly, public adjusters cannot be the only people judging public adjusters. Consumers and qualified professionals from outside the trade should have a meaningful role. Insurers should be heard, but they should not be allowed to turn a professional standards process into another claims weapon. The same is true of competitors who might use complaints to settle commercial scores.
Fair enforcement protects both policyholders and honorable public adjusters.
Why Am I Sticking My Nose into This?
Some public adjusters may fairly say that I am a lawyer, not a licensed public adjuster, and should keep my nose out of their professional affairs. I understand the sentiment.
I have also spent more than four decades working beside public adjusters, teaching at their meetings, studying their history, watching their finest practitioners help policyholders, and seeing the damage caused when poorly trained or unethical people misuse the title. NAPIA and other public adjuster associations have honored me in ways I deeply appreciate.
I do not treat that recognition as permission to tell public adjusters how to run their profession. I treat it as a responsibility to contribute honestly when the quality of public adjusting directly affects policyholders. Public adjusters should lead this effort. But policyholders are the reason the effort matters.
My purpose is not to criticize public adjusters or pretend that insurers, independent adjusters, contractors, experts, or attorneys have somehow achieved ethical perfection. They certainly have not. Every part of the claims industry needs higher standards, better training, and meaningful accountability.
Public adjusters should not wait for everybody else to improve before improving themselves. Leadership begins with the standards we voluntarily accept for our own conduct.
NAPIA Has an Extraordinary Opportunity
NAPIA does not have to abandon its Code. Major’s coalition does not have to surrender its independence. State regulators do not have to delegate their licensing authority.
NAPIA could adopt a strengthened professional code after open review and comment. Major’s coalition could continue developing the substantive standards and provide independent participation in their interpretation. A separate disciplinary body could investigate and adjudicate complaints without becoming beholden to NAPIA officers, large public adjusting firms, insurers, lawyers, or vendors. State regulators could receive referrals concerning conduct that may violate licensing laws.
The standards body and the disciplinary body should not be identical. Those who write the rules should not automatically become the prosecutor, judge, and appellate court.
The system should also distinguish between individual and firm responsibility. A firm should not display a professional seal merely because one licensee signed a pledge while its salespeople, estimators, and managers operate by different rules. Firm leadership must accept responsibility for training, supervision, capacity, compensation arrangements, and the conduct of everyone working under the firm’s name.
This will take time. It will require revisions, uncomfortable discussions, money, administration, and the willingness to discipline people we know. That is precisely why most industries talk about raising standards far more often than they actually raise them.
The easiest response is to say that NAPIA already has a Code, state regulators already have laws, and good public adjusters already behave properly. All three statements may be true, but none answers the problem.
The current system still allows people with dramatically different levels of education, experience, preparation, resources, ethics, and commitment to present themselves to a distressed policyholder under the same title: public adjuster. The status quo is not a sacred tradition. It is merely where we stopped making progress.
Jeff Major has given the public adjusting community something concrete to debate and improve. NAPIA has the experience and institutional strength to help turn that work into a lasting professional standard. The NAIC Model provides regulatory concepts that can be used carefully without accepting every provision. These three efforts can live in harmony. More importantly, they can strengthen one another.
The goal should not be to prove whose Code came first or whose language is best. The goal should be to build a system in which membership and professional recognition mean something to policyholders, ethical public adjusters are distinguished from pretenders, and serious misconduct produces serious consequences.
William Goodman, NAPIA’s first elected leader, wrote about these same concerns in 1951. 1 In his article, The Public Adjuster, he called for higher qualifications, education, strict ethical codes, selective professional societies, capable enforcement, and the removal of unqualified and unscrupulous adjusters.
Nearly seventy-five years later, we should not merely admire his vision. We should finish the work.
Thought For The Day
“Eternal vigilance is the price of progress in any field of activity.”
—William Goodman, “The Public Adjuster,” Best’s Insurance News, Fire and Casualty Edition, February 1951
1 William Goodman, The Public Adjuster, Best’s Insurance News, Fire and Casualty Edition (Feb. 1951).
