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House bars new public adjuster licenses, caps fees at 5% to address consumer complaints
Summary
House Bill 568 was explained on the floor as a consumer-protection measure that prohibits new public adjuster licenses (allowing renewals for current licensees), requires Kentucky jurisdiction for contracts, requires a copy of the contract be provided to consumers and establishes a 5% standard fee cap; the House passed the bill with an overwhelming recorded vote.
The House considered and passed House Bill 568 after an explanation by the gentleman from Edmondson. He said the bill responds to ongoing complaints and investigations in the public-adjuster industry, noting that more than 400 public adjusters are licensed for work in Kentucky while only about 30 are Kentucky residents.
Key provisions explained on the floor include a prohibition on issuing new public adjuster licenses while allowing current licensees to renew; contractual requirements that disputes be governed by Kentucky courts (to avoid forum-selection clauses in out-of-state contracts); a requirement that a physical copy of the contract be provided to consumers to guard against post-sale electronic modification; a prohibition on adjusters soliciting signatures on behalf of adjusters; and a standard 5% fee cap (clarified as 5% of the insurance settlement, not an additional surcharge).
The sponsor also said the bill prohibits unlicensed practice that amounts to the practice of law, citing a 1995 Kentucky Bar Association opinion and Supreme Court rule 3.02. The clerk recorded the roll call as 95 members voting with one recorded nay and the bill was declared passed.
