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Committee advances bill that would cap public-adjuster fees, bar certain practices and pause new licenses; adjusters warn it would eliminate industry
Summary
House Bill 5 68 would pause new public-adjuster licenses, require contracts be governed by Kentucky law, cap fees at 5 percent and prohibit public adjusters from negotiating claims; the National Association of Public Insurance Adjusters and multiple public adjusters and roofers testified the bill as written would reduce consumer choice and drive matters to litigation.
The House Banking and Insurance Committee advanced House Bill 5 68 after an extended hearing including sponsor explanation, a national trade association representative, multiple licensed public adjusters and roofing-industry witnesses.
Representative Michael Meredith said HB 5 68 responds to ongoing complaints and investigations in the public-adjusting profession after passage of House Bill 2 32. The sponsor described multiple provisions: prohibit issuance of new public-adjuster licenses while allowing existing licensees to renew; require contracts to be enforceable in Kentucky courts under Kentucky law; bar contractors from soliciting signatures on public-adjuster contracts; require a paper/fiscal copy of contracts for consumers; set a 5% standard fee cap for all claims (HB 232 previously allowed up to 15% for non-catastrophic claims and 10% for catastrophic claims); and bar public adjusters from negotiating claims (they would still be allowed to advise and assist consumers).
Jason Taylor, a licensed public adjuster and attorney testifying on behalf of the National Association of Public Insurance Adjusters (NAPIA), opposed the bill. He said the 5% cap and a 30-day rescission period would be unworkable, that restrictions on negotiation would remove a core consumer service and that prohibiting new licenses would reduce competition and consumer choice. “House Bill 5 68 will not stop the bad actors, but will take away an important consumer protection tool for Kentucky families and businesses,” Taylor said.
Multiple Kentucky public adjusters and roofing contractors gave similar testimony: Kevin Stamper (American Adjuster Association) said the bill would prevent firms from growing and push homeowners into costly litigation; Brandy Carroll and others described the profession as a means of assisting homeowners through complex claims and warned that a 5% cap and negotiation restrictions would effectively eliminate public adjusting in Kentucky. Roofing contractors also described changes in insurer practices and argued the bill, as written, would create consumer harm by making legal action the only alternative for underpaid claims.
Committee members asked questions about fee floors, electronic signatures and whether limiting negotiation would send policyholders to attorneys. Some members expressed concerns but ultimately supported reporting the bill favorably so the matter can be further considered on the House floor. The committee recorded a favorable report with several members noting the need for further amendment and follow-up with stakeholders.
