Licensing Uniformity & Reciprocity

The Problem

Only two-thirds of states license independent claims adjusters.  The 34 states that do license, however, enacted their licensing laws decades ago, when claims adjusting was a very local endeavor.  Today, however, claims adjusting is national, and the complex array of state laws and regulations make it difficult for qualified and experienced out-of-state adjusters to provide timely and efficient claims processing.  Claims adjusters are expected to meet customer needs over the phone, online, and in person, including across state lines when processing claims.  This means that adjusters need to be licensed in each state in which a claimant is located.

As a result of this patchwork system, claims adjusters are forced to deal with the inefficiencies, duplication, and bureaucracy of 34 different state licensing regimes, only a few of which are partially reciprocal. This results in wasted time, effort and expense, impacting consumers who can face delays and interruptions in service, and adjusters who must navigate this inefficient and archaic system to process claims for their customers.

Working Against The Consumer – State Laws Impeding Claims Adjusting

  • Connecticut:  Will not provide reciprocity to a licensed adjuster whose “designated home state”, residency or license is in the neighboring state of New York, until that adjuster has a valid license from another state other than New York.  Thus, consumers are unable to access services by qualified adjusters in New York who are just across the state line, unless the New York adjusters are willing to get a second license and take a second exam from another state
  • Oklahoma:   Will not offer reciprocity for claims adjusters licensed in the following six states Arizona, California, Hawaii, Nevada, New Mexico or New York; nor will Oklahoma allow an adjuster to rely on these states as their designated home state.  Oklahoma does offer reciprocity for 15 states (AL, AR, MN, MT, FL, NH, ID, NC, IN, OK, KY, TX, LA, UT, WY) but excludes the states above.
  • Rhode Island:   Requires its applicants to be licensed in one of 11 other states to receive a license. If an applicant is licensed in any other of the 23 states offering licenses, reciprocity will be denied, and the applicant must take the Rhode Island licensing examination. Yet, starting in 2015, Rhode Island was willing to recognize a Non-Resident Adjuster licenses from any other reciprocal state. Yet, examinations are still required for residents of CA WY HI NY.
  • Vermont:   Requires workers’ compensation adjusters to attend the state’s workers’ compensation conference—which is held once every two years in Vermont.
  • Wyoming:  Requires applicants that reside in California, New York and Hawaii to take the Wyoming licensing examination.  Wyoming does not reciprocate with these states and requires an in-state exam.
  • New York:   Requires a five-character references for adjusters to receive a license.   Character references must be completed on a handwritten form in black ink and be notarized and sent by mail.  New adjusters moving into New York must obtain these character references from citizens of New York, making it difficult for qualified adjusters new to the state to complete this requirement. Adjuster licenses take up to 4-6 months to complete.    New York also requires resident applicants to hold a $1,000 surety bond.
  • New Mexico:  Requires a $10,000 bond for adjusters, and requires a separate form to be completed by adjusters and bond issuers certifying the validity of the bond
  • Alaska, Arizona, New Hampshire, North Carolina and Texas refuse to accept the crop adjuster national certification (known as CAPP), and still require a crop adjuster to take a property and casualty exam (irrelevant to their work) or a unique crop adjuster exam which may not comport with federal crop insurance standards

The Solution – The Claims Licensing Advancement for Interstate Matters (CLAIM) Act (H.R. 4037)

The CLAIM Act (H.R.  4037) requires states to adopt uniform or reciprocal adjuster licensing laws for independent claims adjusters that will enable adjusters who are properly licensed in their designated home states to assess and settle claims across state lines without discrimination. The state-based regulation of independent adjusters would still remain in place, but the states would be incentivized to undertake needed reforms within four years of the law’s enactment.

If a state is unable to adopt uniformity and reciprocity after four years, the CLAIM Act would authorize independent claims adjusters to apply to the National Association of Registered Agents and Brokers (NARAB) for a license under which to operate in such non-conforming state.

The CLAIM Act represents a balanced approach; mirroring legislation already enacted by Congress for agents and brokers (known as NARAB I and NARAB II).  The bill would enable adjusters to handle claims more efficiently and effectively across states lines with both reciprocal licensing reforms and appropriate state oversight.  More importantly, the CLAIM Act protects consumers and accelerates claims resolution by encouraging states to adopt uniform licensing criteria management programs, safer workplaces, and improved accident prevention programs.

Federal Advocacy Toolkit – CLAIM Act

CLAIM Act Summary   

How the CLAIM Act works


Frequently asked questions

CLAIM Act Reciprocity   

Need for reciprocity in licensing