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Committee releases bills tightening contract requirements for public adjusters
Summary
A4390 and S1320 would require public-adjuster contracts to include license numbers, a clear description of services, compensation terms and a right-to-cancel notice; sponsors and industry representatives said the changes provide clarity and consumer protection rather than new substantive requirements.
The Assembly Regulated Professions Committee voted to release Assembly bill A4390 and Senate bill S1320, which amend the Public Adjusters Licensing Act to require that contracts between public adjusters and insureds contain specific information: the license number of the adjuster and firm, a clear description of services to be rendered, the amount or extent of compensation, and a notice of right to cancel. The bills also clarify escrow-account requirements.
Industry representatives, including the Mid Atlantic Public Insurance Adjusters, told the committee the law (originally enacted in 1993 and last amended in 2011) lacked specific contract language that has led to enforcement challenges. "This bill does is it provides clarity for the public adjusters as to exactly what is needed on their contract," said Holly Soffer, chief counsel for the Mid Atlantic Public Insurance Adjusters. The bill also narrows the escrow-account requirement by removing the statutory obligation that deposited escrow funds be interest-bearing while preserving the escrow requirement itself.
Proponents said the changes are intended as consumer-protection clarifications to reduce prosecutions that arise from ambiguous contract language. The committee voted to release both bills to the full Legislature.
