NEW PA RULES…Where’s The Industry?!

Please…those in the industry who are engaged in all issues dealing with public adjusters, forgive my lumping you in with those who appear not to be.

Such lumping is unavoidable and unintentional!

But…it is important that insurers and insurer groups give greater attention to the heightened campaign by PA’s to represent literally everyone  who files a claim–regardless of need.

Some good laws have been passed in recent years. They solve many of the more prominent PA problems. Now it’s time to be equally vigilante with respect to more insidious abuses of the system.

Does anyone dispute, for example, that the ultimate goal of public adjusters is to interject themselves into every claim, to get a signed contract from “every” policyholder  with a loss; and to do so without regard to any demonstrated need for such intervention?

Doubters should read the numerous opinion pieces urging claimants to contact a PA before they do anything else.  Read the pleas of Pat Cucarro, president of the Florida Association of Public Adjusters (FAPIA) urging lawmakers to repeal the provision in last year’s SB-408 because, as he wrongly contends, it prevents PA’s from representing Citizens claimants during the “initial” part of a claim “when it’s needed most.”

Read the letters, published in my blogs from PA’s railing against private carriers and Citizens about alleged abuses, which they contend require a PA presence even in the absence of abuse.

And, if you work for a carrier, or with Citizens, ask yourself…”What would happen if EVERY CLAIM involved representation by a public adjuster?”

Thursday March 22, 2012 the Department of Financial Services (DFS) conducted hearings on new rules for Public Adjusters (PA’s).  According to presiding officer, Eric Purvis, the rules are necessitated by legislative changes dating back to the advent of Public Adjuster apprentices in 2006.

Again, please forgive any inappropriate “lumping together” but, these hearings are slim on aggressive industry participation–those who’ll stand up to charges leveled by one or more of the five (count ’em, five) PA groups on hand.  (See NOTE #1 below).

The two rule “drafts”, 69B-220051 & 69B-220.201,   contain language implementing parts of  last year’s SB-408 but, unfortunately, not alleged abuses of the new provision for Citizens claims applying a 10% fee limit to the difference between the original offer and the final claim payment.

Why wasn’t someone there suggesting that such abuses can and/or should be addressed in these rules?

Once enacted rules have “the full force and effect of law.”

But, no one from the industry pointed out problems with paragraph (K)  p.8 of rule 220051.  Obviously designed to increase the likelihood of PA involvement,  it discourages advice to claimants about other options with:

“(K). An adjuster shall not advise a claimant to refrain from seeking legal advice, nor advise against the retention of counsel or the employment of a public adjuster to protect the claimants interest.”

In other words, because someone holds an adjusters license they can’t tell a claimant to “wait and see” before signing a PA’s contract?

If I were an independent adjuster can I tell a neighbor with a loss to first analyze the advantages of state sponsored mediation?  Can I tell them about PA fee’s or that it looks like their claim is being handled appropriately and they might want to “hold off”  until there’s a clear reason to seek such representation?

I get the intent, but… paragraph (K), by implication, goes too far!

That it applies only to “adjusters”,  is helpful–this leaves other licensee’s and members of the public, such as myself, to render whatever 1st amendment advice we deem appropriate; including “don’t hire an attorney” or “don’t hire a public adjuster.”  However, one wonders why those most qualified to give similar advice should be the only ones paragraph (K) prohibits from doing so?

Paragraph (K) might also prevent an agent  dually licensed as an independent adjuster from recommending to his/her own client to “wait and see if there’s a problem” before signing a PA contract.

Further, it might prevent independent adjusters, those who don’t work for the insurer and aren’t even involved in the claim, from giving similar, truthful and helpful, advice to the policyholder and it may discourage the distribution of brochures along the same lines.

Truth be known, claimants need exactly the kind of advice paragraph (K) makes it harder for them to get–advice about the relative benefits of hiring a public adjuster vs. the benefits and/or drawbacks of the myriad of other, often less expensive, options.

Still…paragraph (K) isn’t the problem.  It’s more like a symptom; one that can be repaired with new language. (See NOTE #2 below).

The problem, a lack of industry involvement in a rule making process that’s full steam ahead at this point, is a little more difficult to solve.

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NOTE #1–organizations and individuals at the DFS rule hearing were NAPIA (National Association of Public Insurance Adjusters), FAPIA (Florida Association of Public Insurance Adjusters), IPAC (Insured’s Public Action Coalition), FAPIA founder, Chip Merlin with the Merlin Law Group which also founded POF (Policyholders of Florida) headed by Sean Shaw also with the Merlin Law Group, the general counsel for one carrier, Sam Miller (Florida Insurance Council), one carrier lobbyist/attorney, at least one media representative, miscellaneous others by phone, and…yours very truly.

NOTE #2: Paragraph (K) could be improved by adding language similar to the following:“This should not be construed to prohibit anyone from answering questions or providing to the public the relative differences, advantages and drawbacks of various forms of post claim representation, including services that may be offered by the  State such as mediation or arbitration, or those available from the Insurance Consumer Advocate, the Department of Financial Services or the Office of Insurance Regulation. “

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