The Honorable Joseph D. Hawkins Opinion NO. h-846 Commissioner of Insurance State Board of Insurance Re: Authority of the 1110 San Jacinto State Board of Insurance Austin, Texas 78786 to license public adjusters under article 21.07-4, Insurance Code. Dear Mr. Hawkins: You have requested our opinion regarding whether the State Board of Insurance may license a person who investigates losses on behalf of an insured. Article 21.07-4, Texas Insurance Code, defines an 'adjuster' as any person who, as an independent con- tractor, or as an employee of an independent contractor, adjustment bureau, association, insurance company or corporation, local recording agent, managing general aqent, or self-insured, investigates or adjusts losses on behalf of either an insurer or a self-insured, or any person who supervises the handling of claims. Sec. l(a). Such definition excludes perrons who investigate losses on behalf of an insured, someti s referred to as "public adjusters." Prior to the er-, tment of article 21.07-4, such persons were included within tf+ definition of "insurance adjuster" contained in section (3) zf article 19.01, Title 122A, Taxation-General, V.T.C.S. That provision, however, was specifically repea! d by section 21 of article 21.07-4 of the Insurance Code. D. 3567 . II !’ The Honorable Joseph D. Hawkins - page 2 W-846) Although he is not included within the definition of "adjuster" in section l(a) of article 21.07-4, neither is a public adjuster expressly excepted therefrom by section l(b), which provides: (b) 'Adjuster' shall not include: (1) an attorney at law who adjusts insurance losses from time to time and incidental to the practice of law, and who does not advertise or represent that he is an adjuster: (2) a salaried employee of an insurer who is not regularly engaged in the adjust- ment, investigation, or supervision of insurance claims: (3) persons employed only for the purpose of furnishing technical assistance to a licensed adjuster, including, but not limited to, photographers, estimators, private detectives, engineers, handwriting experts, and attorneys at law; (4) a licensed agent or general agent of an authorized insurer who processes undisputed and/or uncontested losses for such insurer under policies issued by said agent or general agent; (5) a person who performs clerical duties with no negotiations with the parties on disputed and/or contested claims; (6) any person who handles claims arising under life, accident and health insurance policies. Public adjusters are presently excluded from licensing by rule of the State Board of Ins.rance. Since a public adjuster i- not included within the definition of "adjuster" in section l(a), such a person is not required to comply with the mandatory licensing pro- visions of section 2(a), which are applicable only to every person who "hold[s] him% .f out to be an adjuster." The Board of Insurance is, honever, required to issue a license to any applicant who meets the licensing qualifications set forth in section 7: o. 3568 . . *. The Honorable Joseph 0. Hawkins - page 3 (H-8461 Sec. 7. The commissioner shall license as an insurance adjuster only an individual who has otherwise complied with this Act, and who has furnished evidence satisfactory to the board that: (1) he is at least 18 years of age: (2) he is a bona fide resident of this state, or is a resident of a state or country which will permit residents of this state to act as insurance adjusters in such other state or country; (3) if he is a nonresident of the United States, he has complied with all federal laws pertaining to employment or the transaction of business in the United States; (4) he is a trustworthy person; (5) he has had experience or special education or training with reference to the handling of loss claims under insur- ance contracts of sufficient duration and extent to make him competent to fulfill the responsibilities of an insurance adjuster: and (6) he has successfully passed an examination as required by the commissioner in accordance with this Act or has been exempted according to the provisions of this Act. Article 21.07-4 does not contain a requirement that a person must investigate or adjust losses on behalf of an insurer or a self-insured in order to obtain a license. Thus, in our opinion, although a public adjuster is not required to comply with the licensing pr isions of article 21.07-4 of the Insurance Code, the State Bo&.;dof Insurance is required to issue a license to any person who complies with the statutory qualifications for obtaining an adjuster's license. p. 3569 The Honorable Joseph D. Hawkins - page 4 (H-8461 SUMMARY Although a public adjuster is not required to comply with the licensing provisions of article 21.07-4 of the Insurance Code, the State Board of Insurance is required to issue a license to any person who complies with the statutory qualifications for obtaining an adjuster's license. Very truly yours, Attorney General of Texas APPROVED: w Opinion Committee jwb D. 3570