Connecticut Assembly proposes regulations for public adjuster fees effective 2025

On February 7, 2025, the Connecticut State Legislature introduced Senate Bill 1270, aimed at regulating the practices of public adjusters in the state. The bill, referred to the Committee on Insurance and Real Estate, seeks to amend existing statutes concerning how public adjusters charge fees related to insurance settlements.

The primary purpose of Senate Bill 1270 is to enhance consumer protection by establishing clear guidelines for public adjusters. Key provisions include a prohibition on public adjusters charging fees if an insurer offers to pay the full policy limits within thirty days of a loss. Additionally, any fees charged must be based solely on the actual settlement proceeds received from the insurer, and these fees can only be collected after the insured has received the payment.

The introduction of this bill has sparked discussions regarding its implications for both consumers and public adjusters. Proponents argue that it will prevent potential exploitation of policyholders during vulnerable times, ensuring that adjusters are compensated fairly only after the insured has received their settlement. Critics, however, express concerns that the restrictions may limit the ability of public adjusters to operate effectively, potentially leading to delays in claims processing.

The economic implications of Senate Bill 1270 could be significant, as it may alter the dynamics of the insurance claims process. By ensuring that public adjusters are only compensated after the insurer has paid, the bill could lead to a more transparent and equitable system for policyholders. However, it may also result in increased scrutiny of public adjusters' roles, potentially affecting their business models.

As the bill progresses through the legislative process, it will likely face further debate and possible amendments. Stakeholders, including insurance companies and consumer advocacy groups, are expected to weigh in on the proposed changes, which could shape the final version of the legislation. The bill is set to take effect on October 1, 2025, if passed, marking a significant shift in the regulatory landscape for public adjusters in Connecticut.