PRINTER'S NO. 429
No. 379 Session of 1983
INTRODUCED BY DAWIDA, J. L. WRIGHT, PISTELLA, FARGO, RYBAK,
KUKOVICH, MORRIS, PRATT, McVERRY, MICHLOVIC, FATTAH, WOGAN,
SEVENTY, COWELL, HALUSKA, ALDERETTE, COHEN, MADIGAN, WAMBACH,
DeLUCA, D. R. WRIGHT, TELEK, PERZEL, McINTYRE, LETTERMAN AND
ITKIN, MARCH 15, 1983
REFERRED TO COMMITTEE ON INSURANCE, MARCH 15, 1983
AN ACT
1 Providing for the licensing and regulating of public adjusters
2 and public adjuster solicitors.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Definitions.
6 The following words and phrases when used in this act shall
7 have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 "Public adjuster." Any person, partnership, association or
10 corporation advertising, soliciting business, or holding himself
11 or itself out to the public as an adjuster of claims for losses
12 or damages arising out of policies of insurance, surety or
13 indemnity upon property, persons or insurable business interests
14 within this Commonwealth, and receiving any compensation or
15 reward for the giving of advice or assistance to the insured in
16 the adjustment of claims for such losses, or who for
1 compensation or reward, whether by way of salary or commission
2 or otherwise, directly or indirectly, solicit business,
3 investigate or adjust losses, or advise the insured with
4 reference to claims for losses on behalf of any other person,
5 partnership, association or corporation engaged in the business
6 of adjusting losses. The term does not include an agent or
7 employee of an insurance company, association or an exchange,
8 through whom a policy of insurance was written, in adjusting
9 loss or damage under such policy, nor does it include a broker
10 or agent acting as an adjuster if the services of the agent or
11 broker in the adjustment are without compensation.
12 "Public adjuster solicitor." Any person, partnership,
13 association or corporation, who or which solicits, directly or
14 indirectly, or in any manner aids in securing for a public
15 adjuster a contract for the adjustment of a loss.
16 Section 2. License.
17 (a) License required.--No person, partnership, association
18 or corporation shall, directly or indirectly, act within the
19 Commonwealth as a public adjuster or a public adjuster solicitor
20 without first procuring from the Insurance Commissioner a
21 license as a public adjuster or public adjuster solicitor,
22 respectively.
23 (b) Insurance Commissioner to issue licenses.--The Insurance
24 Commissioner may issue a license as a public adjuster or public
25 adjuster solicitor to any person of at least 18 years of age who
26 is a resident of this Commonwealth and to any partnership,
27 association or corporation which maintains a bona fide office in
28 the Commonwealth, readily accessible to the general public. No
29 license shall be granted to any corporation unless by provisions
30 of its charter it is authorized to engage in the business of
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1 insurance claim adjusting and unless individual licenses are
2 also secured for each active officer of such corporation. No
3 license shall be granted to a partnership or association unless
4 individual licenses are also secured for each active member of
5 such partnership or association. Before any such license is
6 granted, the applicant shall first make answer, in writing and
7 under oath, to interrogatories on forms and supplements such as
8 the Insurance Commissioner shall prepare: Provided, That any
9 applicant who shall have held such a license for a period of at
10 least two years prior to the effective date of this act shall be
11 entitled, upon proper application, to receive a license without
12 the necessity of submitting to an examination. When the
13 Insurance Commissioner is satisfied that the applicant is worthy
14 of license and that he is reasonably familiar with the
15 provisions of the insurance law of this Commonwealth he shall
16 issue a license.
17 (c) Periodic reexaminations.--The Insurance Commissioner may
18 require periodic reexamination of all licensees as he deems
19 necessary to establish their competence.
20 (d) License not to be issued to certain persons.--No license
21 as a public adjuster or public adjuster solicitor shall be
22 issued to any person, partnership, association or corporation
23 engaged in or interested in or receiving any profit from nor
24 shall the holder of any such license engage in or be interested
25 in, or receive any profit from or be in any manner connected
26 with by blood or marriage, any business involving salvage,
27 repair, replacement, restoration, renovation or demolition of
28 damaged property, real or personal (including, but not limited
29 to, building construction, motor vehicle sales or repair
30 facilities, odor elimination and cleanup facilities) or any
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1 other business which may be prohibited by the Insurance
2 Commissioner as being a conflict in interest.
3 Section 3. Fees.
4 (a) Public adjuster's license.--A fee shall be paid to the
5 Insurance Commissioner by the applicant for a public adjuster's
6 license at the time application is made, and annually thereafter
7 for the renewal thereof, of $100. If the applicant is a
8 corporation, partnership or association, such fee shall be paid
9 for each person specified in the license.
10 (b) Public adjuster solicitor's license.--A fee shall be
11 paid to the Insurance Commissioner by the applicant for a public
12 adjuster solicitor's license at the time application is made,
13 and annually thereafter for the renewal thereof, of $50. If the
14 applicant is a corporation, partnership, or association, such
15 fee shall be paid for each person specified in the license.
16 Section 4. Bond.
17 (a) Public adjuster's bond.--Each person, partnership,
18 association or corporation receiving a public adjuster's
19 license, shall, before transacting any business thereunder,
20 execute and deliver to the Insurance Commissioner a bond in the
21 minimum penal sum of $5,000 with such sureties as the Insurance
22 Commissioner may approve.
23 (b) Public adjuster solicitor's bond.--Each person,
24 partnership, association or corporation receiving a public
25 adjuster solicitor's license, shall, before transacting any
26 business thereunder, execute and deliver to the Insurance
27 Commissioner a bond in the minimum penal sum of $1,000 with such
28 sureties as the Insurance Commissioner may approve.
29 (c) Condition of bond.--The bond of the public adjuster and
30 the public adjuster solicitor shall be conditioned that said
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1 public adjuster or public adjuster solicitor will faithfully
2 comply with all the requirements of this act, and shall not
3 embezzle, take, secrete or otherwise dispose of or fraudulently
4 withhold, appropriate, lend, invest or otherwise use or apply,
5 any money or substitutes for money or any salvage, goods or
6 property received by him as such public adjuster or public
7 adjuster solicitor or employee of a public adjuster, contrary to
8 the instructions or without the consent of the assured or his
9 legal representative. Any person, firm or corporation who has
10 entered into a contract with a public adjuster, as provided in
11 section 5, and who shall suffer loss by reason of the failure of
12 the public adjuster to comply with this act and faithfully
13 perform his duties, shall have the right to intervene and be
14 made a party to any action instituted by the Commonwealth on the
15 bond of the public adjuster and to have his, her or its rights
16 and claims adjudicated in such action and judgment rendered
17 thereon, subject, however, to the priority of the claim and
18 judgment of the Commonwealth. If the amount of the liability of
19 the surety on said bond is sufficient to pay the full amount due
20 the Commonwealth, the remainder shall be distributed pro rata
21 among said intervenors. If no suit should be brought by the
22 Commonwealth of Pennsylvania, upon application therefore and
23 furnishing affidavit to the Insurance Department that loss has
24 been suffered by reason of failure of the public adjuster to
25 comply with this act or faithfully perform his duties, such
26 insured shall be furnished with a certified copy of said bond,
27 upon which he, she or it shall have a right of action, and shall
28 be and are hereby authorized to bring suit in the name of the
29 Commonwealth, for his, her or its use and benefit against said
30 public adjuster and his sureties and to prosecute the same to
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1 final judgment and execution. Where suit is instituted by any
2 such insureds on the bond of the public adjuster, it shall be
3 commenced within one year after the performance and final
4 settlement of said contract, and not later. Where suit is so
5 instituted by an insured or insureds, no other action shall be
6 brought by any other claimant, but any other claimant may file
7 his claim in the action first brought and be made party thereto
8 within one year from the completion of the work under said
9 contract, and not later. If two or more actions be brought on
10 the same day, the action in which the largest claim is demanded
11 shall be regarded as the first action. Any creditor who has
12 brought an action within one year as aforesaid, but after suit
13 brought by another creditor or on the same day, may intervene in
14 the suit first brought within the year, notwithstanding the fact
15 that the intervention in such case be after the expiration of
16 the year, provided said intervention be made within 30 days
17 after the expiration of the year. If the recovery on the bond
18 should be inadequate to pay the amounts found due to all of said
19 creditors, judgment shall be given to each creditor pro rata of
20 the amount of the recovery. The surety on said bond may pay into
21 the court, for distribution among said claimants and creditors,
22 the full amount of the surety's liability, to wit, the penalty
23 named in the bond, less any amount which said surety may have
24 had to pay to the Commonwealth by reason of the execution of
25 said bond, and, upon so doing, the surety will be relieved from
26 further liability. In all suits instituted under the provisions
27 of this act, such personal notice of the pendency of such suits,
28 informing them of their right to intervene, as the court may
29 order shall be given to all known creditors, and, in addition
30 thereto, notice shall be given by publication in newspapers of
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1 general circulation, published in the county or municipality
2 where the contract was performed, once a week for at least three
3 successive weeks: Provided, however, That when such suit has
4 begun within three weeks of the end of the year within which
5 suit may be brought, said notice by publication shall be only
6 for the period intervening between the time of instituting such
7 suit and the end of the year.
8 Section 5. Contract.
9 (a) Written contract required.--No public adjuster shall,
10 directly or indirectly, act within this Commonwealth as a public
11 adjuster without having first entered into a contract, in
12 writing, on a form approved by the Insurance Commissioner, and
13 executed in duplicate by the public adjuster and the insured or
14 a duly authorized representative. One copy of this contract
15 shall be kept on file by the public adjuster, available at all
16 times for inspection, without notice, by the Insurance
17 Commissioner or his duly authorized representative. Any contract
18 with a public adjuster may be rescinded by any person signing
19 the contract. Such action must be taken within four calendar
20 days after signature. The Insurance Commissioner may issue
21 regulations to assure the implementation of this section. No
22 public adjuster solicitor shall use any form of contract other
23 than that approved for the public adjuster for whom he is
24 soliciting, nor shall he make any contracts or agreements for
25 himself or for the public adjuster other than such as are
26 specified in the approved contract.
27 (b) Contracts only authorized by insured against his own
28 carrier.--No public adjuster or public adjuster solicitor may
29 adjust or solicit a contract for the adjustment of any claim for
30 losses or damages on behalf of any person except claims by an
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1 insured against his own insurance carrier.
2 (c) Personal injury and automobile property damage claims
3 prohibited.--No public adjuster or public adjuster solicitor
4 shall act in any manner in relation to claims for personal
5 injury or automobile property damage.
6 Section 6. Revocation, etc., of license.
7 (a) Grounds for fines, suspensions or revocations.--
8 Committing any of the following acts shall be grounds for fine,
9 suspension or revocation of a public adjuster's or public
10 adjuster solicitor's license:
11 (1) material misrepresentation of the terms and effect
12 of any insurance contract;
13 (2) engaging in, or attempting to engage in, any
14 fraudulent transaction with respect to a claim or loss that
15 licensee is adjusting;
16 (3) misrepresentation of the services offered or the
17 fees or commission to be charged;
18 (4) conviction by any court of or a plea of nolo
19 contendere to a felony under the laws of this Commonwealth,
20 any other state, the United States or any territory or
21 foreign country; or
22 (5) misappropriation, conversion to his own use or
23 improper withholding of moneys held on behalf of another
24 party to the contract.
25 (b) Adjusters and solicitors responsible for conduct of
26 employees.--Any public adjuster or public adjuster solicitor
27 employing, or using the services of, any person to solicit
28 business shall be held fully responsible for the conduct of that
29 person in connection with business dealings, including but not
30 limited to, making certain that such person has a valid license
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1 as a public adjuster or public adjuster solicitor.
2 (c) Grounds for suspension, etc.--The Insurance Commissioner
3 may suspend, revoke or refuse to renew a public adjuster's or
4 public adjuster solicitor's license if the licensee's office is
5 removed from Pennsylvania; accounts and records of activity are
6 removed from this Commonwealth; or the licensee's office is
7 closed for a period in excess of 30 days, unless granted
8 permission by the Insurance Commissioner to close said office
9 for a longer period.
10 (d) Additional grounds for suspension, etc.--A license
11 issued under this act may be revoked, or may be suspended by the
12 Insurance Commissioner if, after due investigation, he
13 determines that the holder of such license:
14 (1) has violated any provisions of this act or any rule
15 or regulation promulgated, published and adopted thereunder;
16 (2) has made a material misstatement in the application
17 for any such license;
18 (3) has been guilty of fraudulent practices; or
19 (4) has, in the judgment of the Insurance Commissioner,
20 demonstrated his incompetency or untrustworthiness to
21 transact the business of a public adjuster; however,
22 regardless of whether the public adjuster or public adjuster
23 solicitor was licensed or not, the Insurance Commissioner
24 may, at his discretion, in cases warranting such action,
25 impose a civil penalty of not more than $1,000 for each and
26 every violation of this act. Before the Insurance
27 Commissioner shall take any action as above set forth, he
28 shall give written notice to the person, partnership,
29 association or corporation accused of violating the law,
30 stating specifically the nature of such alleged violation,
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1 and fixing a time and place, at least ten days thereafter,
2 when a hearing of the matter shall be held. After such
3 hearing or upon failure of the accused to appear at such a
4 hearing, the Insurance Commissioner shall impose such of the
5 above penalties as he deems advisable. When the Insurance
6 Commissioner shall have taken any actions as above set forth,
7 the party aggrieved may appeal therefrom to the Commonwealth
8 Court.
9 Section 7. Violations.
10 Any person, partnership, association or corporation violating
11 any of the provisions of this act shall be guilty of a
12 misdemeanor, and, upon conviction thereof, shall be sentenced to
13 pay a fine of not less than $500 nor more than $1,000 for each
14 violation and conviction. Prosecution for any violation under
15 this section may be instituted by the Insurance Commissioner or
16 his duly authorized representative.
17 Section 8. Administration and enforcement.
18 (a) Insurance Commissioner to administer and enforce act.--
19 The Insurance Commissioner is hereby charged with the
20 administration and enforcement of this act and shall prescribe,
21 publish, adopt and promulgate rules and regulations in
22 connection herewith.
23 (b) Insurance Commissioner may bring actions.--The Insurance
24 Commissioner or a duly authorized representative may maintain an
25 action for an injunction or other process against any person,
26 partnership, association, corporation or other entity to
27 restrain and prevent any of the foregoing from transacting
28 business as a public adjuster or public adjuster solicitor
29 without a license. Any such action shall be instituted in the
30 Court of Common Pleas in any county where the alleged unlicensed
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1 activity occurred. Such court may issue a temporary restraining
2 order or injunction under this act but shall determine any such
3 action on its merits as soon as possible whether in term time or
4 in vacation. No bond shall be required of and no costs shall be
5 taxed against the Insurance Commissioner, his duly authorized
6 representative or the Insurance Department on account of any
7 such action.
8 (c) Act to be supplementary.--The provisions of this act
9 shall be constructed as supplementary to all other acts dealing
10 with the same subject matter. No action brought under the
11 provisions of this act shall prevent the prosecution or
12 institution of any civil or criminal action otherwise provided
13 by law for violation of any licensing act or departmental rule
14 or regulation promulgated thereunder.
15 Section 9. Repeals.
16 (a) Specific act.--The act of April 25, 1921 (P.L.276,
17 No.136), entitled, as amended, "An act requiring persons,
18 partnerships, associations, or corporations advertising for or
19 soliciting business as adjusters of claims within this
20 Commonwealth for loss or damage arising out of policies of
21 insurance, surety, or indemnity on property, persons, or
22 insurable business interests within this Commonwealth, to be
23 licensed by the Insurance Commissioner; requiring persons,
24 partnerships, associations, or corporations acting as solicitors
25 for said adjusters to be licensed by the Insurance Commissioner;
26 regulating the issuance and revocation of such licenses;
27 prescribing certain conditions for the transaction of such
28 business; providing for the filing of bonds by public adjusters
29 and public adjuster solicitors, and for recovery thereon by
30 parties in interest; and providing penalties," is repealed.
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1 (b) General repeal.--All other acts and parts of acts are
2 repealed insofar as they are inconsistent with this act.
3 Section 10. Severability.
4 If any provision of this act or the application thereof to
5 any person or circumstances is held invalid, such invalidity
6 shall not affect other provisions or applications of the act
7 which can be given effect without the invalid provision or
8 application, and to this end the provisions of this act are
9 declared to be severable.
10 Section 11. Effective date.
11 This act shall take effect immediately.
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