NY State Senate Bill 2011-S7802

Senate Bill S7802

2011-2012 Legislative Session

Relates to continuing education for licensed persons and qualifications for independent adjusters

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 19, 2012	referred to rules

2011-S7802 (ACTIVE) - Details

See Assembly Version of this Bill:: A3729
Current Committee:: Senate Rules
Law Section:: Insurance Law
Laws Affected:: Add §2616, amd §§2108, 2110 & 2132, Ins L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A7088
2013-2014: S5183, A908
2015-2016: S7814, A3212
2017-2018: S1506, A5460
2019-2020: S4454, A4058
2021-2022: S1291
2023-2024: S9862

2011-S7802 (ACTIVE) - Summary

Relates to claims for loss or damage to real property; creates continuing education requirements for licensed persons and qualifications for public and independent adjusters; allows for a revocation of licenses with an opportunity to reapply for such licenses.

2011-S7802 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7802

TITLE OF BILL:
An act
to amend the insurance law, in relation to claims for loss or
damage to real property,
continuing education for
licensed persons and qualifications for independent adjusters

PURPOSE:
This bill intends to curb the potential for
fraud and abuse
by unscrupulous public or independent insurance adjusters. It does so
by:

* Requiring continuing education for public and independent insurance
adjusters;

* Prohibiting an adjuster from. receiving anything of value in
exchange for a referral of a potential client;

* Prohibiting any public or independent adjuster from having a
controlling interest in any construction, salvage or building
appraisal firm;
and

* Allowing and setting the conditions under which the Insurance
Superintendent may revoke, suspend or refuse to renew the license of
public or independent adjusters.

SUMMARY OF PROVISIONS:
Section 1 adds a new § 2616 to the Insurance
Law, to prohibit an insurer from requiring repairs to be completed by
any particular entity or individual and from suggesting or
recommending a particular entity or individual unless specifically
asked by the insured, in which case the insurer would have to
disclose any controlling or business interest that it has in any
entity or individual that it recommends or suggests.

Section 2 amends subsection (a) of § 2108 of the Insurance Law by
adding two new paragraphs, 5 and 6, which would provide that a public
or independent adjuster shall not receive any compensation or receive
anything of value in consideration of a direct referral of a client.
Section 2 would also prohibit any public or independent adjuster from
suggesting or recommending that repairs be made by a specific entity
or individual unless specifically asked by the insured, in which case
the adjuster would have to disclose any controlling or business
interest that it has in any entity or individual that it recommends
or suggests.

Sections 3 and 4 amend various subsections of § 2108, of the Insurance
Law, to require that independent adjusters participate in continuing
education.

Section 5 amends subsection (a) of § 2110 of the Insurance Law and
allows the superintendent of the Insurance Department to refuse to


renew, revoke, or suspend the license of any insurance agent,
insurance broker, reinsurance intermediary, insurance consultant or
adjuster that has violated any law regarding his or her professional
capacity, for a duration the superintendent deems appropriate. The
superintendent can also suspend or refuse to renew a license for a
duration that he or she determines adequate to discipline a violation
of this section.

Section 6 amends paragraph 2 of subsection (c) of § 2132 of the
insurance law to indicate that during the same calendar year biennial
licensing period, independent adjusters may use accumulated
continuing education credits to meet the requirements of similar
classes of licenses. In doing so, independent adjusters are provided
the same benefit as public adjusters.

JUSTIFICATION:
In the past decade, fraud committed by a small number
of unscrupulous public and independent adjusters has placed a black
cloud over much of the insurance industry. The actions of these few
have caused undue harm to both policy holders and adjusters who
operate under the highest professional standards. Most of those
accused of committing fraud have pled guilty, received fines and or
jail time. To date, many of them retain their New York State licenses.

This legislation will help the adjusting industry rid itself of "bad
apples" by imposing continuing education requirements and imposing
revocation and suspension guidelines for public and independent
adjusters alike.

The bill will also prevent conflicts of interest that may arise when
an insurer or adjuster has controlling interest in a construction firm.

For example, an insurance company may consult a sister construction
firm in which it has controlling interest -- to adjust housing repair
claims.

In return for the free adjustment, the construction firm may receive
the contract for the repairs or other construction. A conflict of
interest arises when the construction company receives such a
contract and inflates the estimate, resulting in higher premiums to
policy holders.
This practice causes a public interest to be violated due to the lack
of objectivity.

The bill helps avoid such conflicts in three ways. First, it prevents
insurers from requiring repairs be made by a particular construction
firm. If recommendations are made that repairs be done by a
particular firm, the insurer must disclose to the insured whether the
insurer has a controlling interest in such firm. Second, it prohibits
public and independent adjusters from paying or giving gifts to
people or companies in exchange for potential client referral. Third,
it prohibits public or independent adjusters from having any
controlling interest in a construction, salvage or appraisal firm.

LEGISLATIVE HISTORY:


2004 - S.4752-B - Passed Senate A.6915 - Referred to Assembly
Insurance Committee

2003 - S.4752 - Referred to Senate Insurance Committee A.6915 -
Referred to Assembly Insurance Committee

2002 - S.2067 - Referred to Senate Insurance Committee A.6009-A -
Referred to Assembly Insurance Committee

2001 - S.2067 - Referred to Senate Insurance Committee A.6009-A -
Referred to Assembly Insurance Committee

2000 - A.6592 - Referred to Insurance

FISCAL IMPLICATIONS:

None to the state.

EFFECTIVE DATE:

This act shall take effect on the first of January
after it shall have become law.

2011-S7802 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7802

                            I N  S E N A T E

                              June 19, 2012
                               ___________

Introduced  by  Sen.  ROBACH -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the insurance law, in relation to  claims  for  loss  or
  damage to real property, continuing education for licensed persons and
  qualifications for independent adjusters

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new  section  2616
to read as follows:
  S 2616. CLAIMS FOR LOSS OR DAMAGE TO REAL PROPERTY; REPAIRS. (A) WHEN-
EVER  AN  INSURED  SUFFERS A LOSS OR DAMAGE TO REAL PROPERTY, NO INSURER
PROVIDING COVERAGE THEREFOR SHALL REQUIRE THAT REPAIRS BE COMPLETED BY A
PARTICULAR ENTITY OR INDIVIDUAL.
  (B) IN PROCESSING ANY SUCH CLAIM, THE INSURER SHALL NOT  RECOMMEND  OR
SUGGEST  REPAIRS  BE  MADE  BY  A PARTICULAR ENTITY OR INDIVIDUAL UNLESS
EXPRESSLY REQUESTED BY THE INSURED, IN  WHICH  CASE  THE  INSURER  SHALL
DISCLOSE  TO  THE INSURED WHETHER THE INSURER HAS A CONTROLLING OR BUSI-
NESS INTEREST IN ANY ENTITY OR INDIVIDUAL THAT THE INSURER RECOMMENDS OR
SUGGESTS.
  S 2. Subsection (a) of section 2108 of the insurance law is amended by
adding two new paragraphs 5 and 6 to read as follows:
  (5) NO PUBLIC OR INDEPENDENT ADJUSTER SHALL RECEIVE  ANY  COMPENSATION
OR  RECEIVE ANYTHING OF VALUE IN CONSIDERATION OF A DIRECT REFERRAL OF A
CLIENT OR POTENTIAL CLIENT.
  (6) AN INDEPENDENT OR PUBLIC ADJUSTER SHALL NOT RECOMMEND  OR  SUGGEST
REPAIRS  BE  MADE  BY A PARTICULAR ENTITY OR INDIVIDUAL UNLESS EXPRESSLY
REQUESTED BY THE INSURED, IN WHICH CASE THE INDEPENDENT OR PUBLIC ADJUS-
TER SHALL DISCLOSE TO THE INSURED WHETHER THE ADJUSTER HAS ANY  CONTROL-
LING  OR BUSINESS INTEREST IN ANY ENTITY OR INDIVIDUAL THAT THE ADJUSTER
RECOMMENDS OR SUGGESTS.
  S 3. Paragraph 1 of subsection (f) of section 2108  of  the  insurance
law is amended to read as follows:
  (1)  The  superintendent shall, in order to determine the trustworthi-
ness and competency to act as an independent adjuster of each individual

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD05092-05-2

S. 7802                             2

applicant for such license, and of each proposed sub-licensee, except in
the case of a renewal license, require every such individual to take and
pass, to the satisfaction of  the  superintendent,  a  personal  written
examination.    AN  INDIVIDUAL SHALL NOT BE DEEMED QUALIFIED TO TAKE THE
EXAMINATION WITHOUT HAVING DEMONSTRATED BY EVIDENCE SATISFACTORY TO  THE
SUPERINTENDENT   THAT:   (A)  THE  INDIVIDUAL  POSSESSES  A  MINIMUM  OF
ONE-YEAR'S EXPERIENCE IN THE INSURANCE  BUSINESS,  WITH  INVOLVEMENT  IN
SALES,  UNDERWRITING,  CLAIMS, OR OTHER EXPERIENCE CONSIDERED SUFFICIENT
BY THE SUPERINTENDENT; OR  (B)  THE  INDIVIDUAL  SUCCESSFULLY  COMPLETED
FORTY  HOURS  OF FORMAL TRAINING IN A COURSE, PROGRAM OF INSTRUCTION, OR
SEMINARS  APPROVED  BY  THE  SUPERINTENDENT.  The   superintendent   may
prescribe  the  types  of  written examinations according to the kind or
kinds of insurance claims [which] THAT the applicant is to  be  licensed
to investigate and adjust.
  S  4. Subsection (r) of section 2108 of the insurance law, as added by
chapter 264 of the laws of 1998, is amended to read as follows:
  (r) (1) The following continuing education requirements shall apply to
resident and non-resident persons  licensed  as  public  OR  INDEPENDENT
adjusters.
  (2)  Resident and non-resident persons licensed as public OR INDEPEND-
ENT adjusters and any person previously so licensed  whose  license  was
not  in  effect  on  the  effective  date of this subsection and who has
subsequently been relicensed pursuant to the provisions of this article,
shall biennially satisfactorily complete such courses or programs as may
be approved by the superintendent, as follows:
  (A) Any person holding a license as a public OR  INDEPENDENT  adjuster
shall,  during  each  full  biennial  licensing  period,  satisfactorily
complete courses or programs of instruction or attend seminars as may be
approved by the superintendent equivalent to  fifteen  credit  hours  of
instruction.
  (B)  During the same calendar year biennial licensing period, a licen-
see may  use  accumulated  continuing  education  credits  to  meet  the
requirements  of  similar classes of licenses including those authorized
by subsection (b) of section two thousand one hundred three, section two
thousand one hundred four, section two thousand  one  hundred  seven  of
this  article  with  respect  to general insurance consultants, and THIS
section [two thousand one hundred eight of this article] with respect to
public AND INDEPENDENT adjusters.
  (C) Excess credit hours  accumulated  during  any  biennial  licensing
period shall not carry forward to the next biennial licensing period for
that same class of license.
  (3) (A) The courses or programs of instruction successfully completed,
which shall be deemed to meet the superintendent's standards for contin-
uing education shall be:
  (i) Courses, programs of instruction or seminars, approved as to meth-
od and content by the superintendent, covering portions of the principal
branches  of  insurance related to the kinds of insurance covered by the
public OR INDEPENDENT adjusting license, and given by a  degree  confer-
ring college or university whose curriculum is registered with the state
education  department  at  the time the person takes the course, whether
such course be given as part of such curriculum or separately, or by any
other institution, association,  trade  association  or  insurer,  which
maintains  equivalent standards of instruction and which shall have been
approved for such purpose by the superintendent.
  (ii) Continuing education as required by the state in which a  non-re-
sident  licensee  resides  and  maintains an office, provided the super-

S. 7802                             3

intendent  deems  them  equivalent  to  New  York  continuing  education
requirements.  If  the  state in which the non-resident licensee resides
and maintains an office has no continuing education requirements, or the
superintendent  does not deem them equivalent, the licensee must satisfy
New York continuing education requirements.
  (B) The number of credit hours assigned to  each  of  the  courses  or
programs  of  instruction  set forth in paragraph one of this subsection
shall be determined by the superintendent.
  (4) A person who teaches any approved course  of  instruction  or  who
lectures at any approved seminar, and who is subject to these continuing
education  requirements shall be granted the same number of credit hours
as would be granted to a person taking and successfully completing  such
course,  seminar  or  program,  provided that such credit hours shall be
credited only once per approved course  during  any  biennial  licensing
period.
  (5)  Every  person  subject to these continuing education requirements
shall furnish, in a form satisfactory  to  the  superintendent,  written
certification  attesting  to the course or programs of instruction taken
and successfully completed by such person, and executed by the  sponsor-
ing organization or its authorizing representative.
  (6)  (A)  Any  person  failing to meet applicable continuing education
requirements shall not be eligible to renew the license.
  (B) Any person whose license was not renewed shall not be eligible  to
become  relicensed during  the next biennial licensing period until that
person has demonstrated to the satisfaction of the  superintendent  that
continuing education requirements for the last biennial licensing period
were met.
  (C)  Any person whose license was not renewed pursuant to subparagraph
(A) of this paragraph, who accumulates sufficient credit hours  for  the
prior licensing period to qualify for relicensing in the biennial period
following such non-renewal, may not apply those same credit hours toward
the continuing education requirements for the current biennial licensing
period.
  (7)  (A)  Any entity eligible to provide continuing education courses,
programs of instruction, or seminars shall  file  for  approval  by  the
superintendent  on  a  biennial  basis,  to  conform  with  its areas of
instruction, a provider organization application and a course submission
application for each course, program, and seminar.
  (B) The provider organization application shall include the  names  of
all  instructors  to be used during the contract period, and instructors
may be added during the  period  by  notifying  the  superintendent  and
paying the appropriate filing fee.
  (C)  The  completed applications shall be returned in a timely manner,
as specified by the superintendent with a non-refundable filing  fee  of
two hundred dollars per organization, fifty dollars per course, program,
and seminar, and fifty dollars per instructor.
  (D)  Approval  of  the  application  shall be at the discretion of the
superintendent.
  (8) Each licensee shall pay a biennial fee of ten dollars per license,
for continuing education certificate filing and  recording  charges,  to
the superintendent, or, at the direction of the superintendent, directly
to an organization under contract to provide continuing education admin-
istrative services.
  S  5.  The  opening paragraph of subsection (a) of section 2110 of the
insurance law, as amended by chapter 499 of the laws of 2009, is amended
to read as follows:

S. 7802                             4

  The superintendent may refuse to renew, revoke, or may suspend  for  a
period  the  superintendent  determines  the  license  of  any insurance
producer, insurance consultant, PUBLIC OR INDEPENDENT adjuster  or  life
settlement  broker,  if,  after  notice  and hearing, the superintendent
determines that the licensee or any sub-licensee has:
  S  6.  Paragraph  2 of subsection (c) of section 2132 of the insurance
law, as amended by chapter 264 of the laws of 1998, is amended  to  read
as follows:
  (2)  During the same calendar year biennial licensing period, a licen-
see may  use  accumulated  continuing  education  credits  to  meet  the
requirements  of similar classes of licenses, as follows: (A) subsection
(a) of section two thousand one hundred three and section  two  thousand
one  hundred  seven  of  this  article  with  respect  to life insurance
consultants; or (B) subsection (b) of section two thousand  one  hundred
three,  section  two thousand one hundred four, section two thousand one
hundred seven of this article with respect to general insurance consult-
ants, and section two thousand one hundred eight of  this  article  with
respect to public AND INDEPENDENT adjusters.
  S  7. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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