New York is the only state that requires an independent insurance claims adjuster to submit five-character references to obtain an adjuster license. The five-character reference requirement is a regulation that was written over 25 years ago and is outdated, costly, and lacks any meaningful benefit for New York or its citizens. Almost all independent adjusters have already been screened by their employers; corporations who are also licensed and are ultimately responsible for the adjusters’ performance and conduct.
Archaic and Outdated Process: The New York Department of Financial Services requires that an adjuster complete a handwritten form, in black ink (forms completed in blue ink may be returned), have it officially notarized and mailed to the Department of Financial Services before being licensed to operate in the state.
The character reference requirement serves no purpose in today’s regulatory environment. The Department collects the character references from each adjuster, but it is unclear whether references are checked, or if applicants are rejected based upon the information provided.
Particularly for those adjusters who are moving into the State, the requirement that references be from “reputable citizens of the community in which the applicant resides or transacts business” creates barriers to licensing. Further, the state license examination is required to establish “trustworthiness,” § 2108(f), negating the need for personal references.
ACP is working with New York State lawmakers to provide a legislative solution to this outdated policy by recommending the elimination of the adjuster character reference requirement. Information and resources on the legislation are provided below:
• New York Insurance Code § 2108(L)
• New York Character Reference Legislation – A.3942 and S.5762
• Enact A.3942/S.5762 to Eliminate the Independent Adjuster Character Reference One-Pager