If you are a public insurance adjuster in New York and you own or have a financial interest in a contracting, service or repair business that you refer clients to in relation to their claims, you must disclose this in writing or risk suspension or revocation of your license.

A new law became effective January 1, 2014,1 amending §2108 and §2110 of the New York Insurance Law to require disclosure by public adjusters and adjusting companies of any financial or ownership interest in contracting, repair, or service businesses they refer their clients to.2

The new law creates an affirmative duty for public adjusters to act in the best interests of the insured when negotiating or settling a claim on the insured’s behalf.3 This means the law now requires public adjusters to put the interests of the insured’s first before their own financial interests.

Specifically, public adjusters can’t get compensation from an insured either directly or indirectly for a referral of the insured to anyone else for services, work, or repairs relating to the claim unless it is clearly stated in the section (p) memorandum of §2108 of the insurance law involving compensation.4 In other words, a public adjuster can’t get a fee for referring a client to a contractor or other service providers, for services related to the claim unless it is clearly and prominently stated in the compensation agreement.

This type of compensation will be considered received from the insured and can’t exceed the maximum amount an adjuster can charge in accordance with the regulations pursuant to subsection (p) – up to12.5% in New York.5 So if an adjuster refers an insured to a contractor or repair service business that he owns or has a financial interest in, any fees collected from that entity either directly or as referral fees go toward his total fee collected from the insured per the compensation agreement.

If a public adjuster or public adjusting company owns or has a financial interest in a contracting or work repair business, under the new law they can’t refer the insured to that business for work related to the claim unless it was clearly and prominently disclosed in the compensation agreement.6 The same holds true for a referral to service business owned by an adjuster’s family member or relative.7

A new paragraph (15) is added to NY INS § 2110 which allows suspension or removal of a public adjusters license if he or she violates the amendments to Section 2108 described above.8

So if you or your public adjusting firm owns or has an interest in a contracting or similar type of business be sure to make it abundantly clear to your client both orally and in writing that you have a financial interest in using the contractor or service provider before you are refer them. And if you are a consumer make sure to ask the adjuster you are working with if they own or have any interest in the entity that they are referring you to for repairs.

If you are unclear on any aspects of this new law it would be advisable to consult with a licensed attorney. Feel free to post questions you have in the Comments section below and I will be happy to answer them.


1 2013 Sess. Law New s of N.Y. Ch. 546 (S. 5775) (McKinney’s).
2 Id.
3 Id. at (s)(1)(NY INS §2108).
4 Id. at (2)(A) (NY INS § 2108).
5 Id.
6 Id. at (B) (NY INS § 2108).
7 Id.
8 NY INS § 2110 at (15).