Adjuster Bond Requirement

The Problem

ACP is working with state leaders to help modernize state insurance laws and regulations, many of which were written decades ago and still require compliance to regulations that are archaic and are no longer relevant in today’s current environment.

Currently, New York, California, New Mexico and Kentucky are the only states in the country that require an independent claims adjuster hold a surety bond in order to practice.  In theory, the surety bond is meant to protect consumers by ensuring adjusters follow through on their licensing obligations.  Unfortunately, the current requirements – which have not been revised in over 25 years ­– are outdated, costly and lack any true benefit to the state or its citizens.

Because most independent adjusters work for companies that themselves are licensed through the state Department of Insurance, those companies are liable for any malfeasance or adjusting error made by the adjuster. Furthermore, to meet this requirement, individual adjusters incur significant costs associated with procuring and renewing these small bonds each year — costs which are ultimately passed on to consumers.  It also remains unclear if any of the four states currently mandating a bond have ever collected on an individual bond since the requirement has been in place.

The Solution

ACP is working with state lawmakers to modernize state insurance codes by eliminating the bond requirement.  Information and resources on ACP’s advocacy in New and California are provided below:

New York Bond Advocacy Resources:

• New York Insurance Code § 2108

• New York Bond Legislation

○ Assembly Bill #10952

• New York - Repeal Insurance Code and Eliminate the Adjuster Bond Requirement One-Pager

California Bond Advocacy Resources:

• California - Repeal Insurance Code and Eliminate the Adjuster Bond Requirement One-Pager

• Op-ed – Insurance adjustment: CA surety bond adds inefficiency