Policy Priorities

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

Uniform Adjuster Licensing Application Reform

The Problem

For years the ACP and the National Association of Insurance Commissioners (NAIC) have called on states to adopt uniform and reciprocal adjuster licensing measures.  As part of that effort, ACP worked with the NAIC to adopt a simplified uniform adjuster license application, and the NAIC, through its affiliate the National Insurance Producer Registry (NIPR) built an electronic application submission portal that all states could access.  To date 45 states have enrolled in the NIPR electronic licensing process, simplifying the application process for the states themselves as well as applicants.  Unfortunately, Texas remains outside the NIPR system for its adjuster licensing, causing applicants to need to use a different application process than they can in almost all of the other states for which they wish to apply.  It is time for the Texas Department of Insurance to join with 45 other states, participate in the NIPR electronic adjuster licensing system, and adopt the uniform application that most states already use.  H.B.4203 and S.B 1755 would require the Department of Insurance within one year to adopt the uniform process used across the country by the vast majority of states and participate in the NIPR process.

The Solution

ACP is working with Texas state lawmakers to enact House Bill 4203 and Senate Bill 1755 to seek uniformity on the electronic adjuster licensing application. Information and resources on ACP’s advocacy on this legislation is provided below:

Texas Adjuster Licensing Application Reform Advocacy Resources:

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:

California Bond Advocacy Resources:

Character Reference Requirement

The Problem

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.

The Solution

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 Character Reference Advocacy Resources:

Bad Faith Legislation, Penalties, & Legal Liabilities

States and courts across the country continue to evaluate the role independent adjusters play in the claims handling process ­– particularly surrounding issues of third party liability­ – and how this is often distinct from the responsibilities of public adjusters and other entities that represent the claimant.

ACP is committed to educating all stakeholders on these important issues, and to continue to advocate for independent adjusters on liability and bad faith matters.

Recent State Liability And Bad Faith Activity

New Jersey ­– Hankins v. Philadelphia Contributorship: A recent decision by the United States District Court for New Jersey ruled an independent adjuster could be held liable for negligent failure to warn in a case where a property owner was injured because of a condition on his property that was the subject of a claim that had been inspected by an adjuster. The court’s opinion imposed a limited “duty of care” in this case misconstrued the nature of what an independent claims adjuster is, and for whom the adjuster works.

In May 2020, ACP filed an amicus brief to the New Jersey District Court outlining the distinction between independent and public adjusters – only the latter of which, as representatives of the claimant, should be subject to the duty of care standard.  Further, the brief argued why the imposition of a limited duty of care standard on responding field claims adjusters is not only contrary to public policy but would also have severely negative consequences on the adjusting industry and ultimately lead to higher premiums and weaker consumer protections.

Related Resources:

Cybersecurity, Data Privacy

The California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act (CCPA) makes sweeping changes to the way business is conducted in the state. As the State Attorney General’s office moves forward to implement this landmark privacy law, ACP is working with California lawmakers to ensure the voice of the claims adjusting community is heard.

Existing state and federal laws, such as the California Insurance Information and Privacy Protection Act (IIPPA) and the Health Insurance Portability and Accountability Act (HIPAA) ensure that information collected as part of the claim’s administration process is kept confidential and secure.

ACP is asking that state regulators make clear information collected as part of administering and managing employee benefits, workplace injury, property and casualty damage, and liability claims are exempt from the CCPA to avoid creating confusion and conflicting standards for businesses and the consumers they serve.

ACP CCPA Advocacy Resources:

Other ACP Policy Priorities