Report - 2021 03 16 A28696 D231446 Bill Report 1037 S Sbr Bfst Ta 21

Summary

A Senate Bill Report on SHB 1037, an act relating to insurance adjusters, prepared for the Senate Committee on Business, Financial Services & Trade and dated as of March 11, 2021. The report states the bill passed the House on 2/3/21 by a 96-0 vote and was originally sponsored by Representatives Kirby and Vick at the request of the Insurance Commissioner. It describes a revised definition of adjuster that excludes appraisers and umpires, authority for the Office of the Insurance Commissioner to set continuing education requirements, and registration of nonresident independent adjusters as emergency adjusters during a state of emergency, limited to 180 days unless extended. It also summarizes supporting public testimony. The report runs three pages and lists no appropriation and no fiscal note.

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Full text

                             SENATE BILL REPORT
                                  SHB 1037

                                      As of March 11, 2021

Title: An act relating to insurance adjusters.

Brief Description: Concerning insurance adjusters.

Sponsors: House Committee on Consumer Protection & Business (originally sponsored by
    Representatives Kirby and Vick; by request of Insurance Commissioner).

Brief History: Passed House: 2/3/21, 96-0.
     Committee Activity: Business, Financial Services & Trade: 3/11/21.


                                     Brief Summary of Bill
           • Modifies the definition of adjuster for property and casualty insurance.
           • Allows the Office of the Insurance Commissioner (OIC) to establish
             minimum continuing education requirements for adjusters.
           • Requires nonresident independent insurance adjusters operating in the
             state to register as emergency adjusters with the OIC.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: Insurance Adjusters. Under current state law, an adjuster is defined as an
     independent contractor who investigates or reports to either the principal in an insurance
     contract, the insurer, or the insured for compensation.

     Types of adjusters defined in law include:
        • an independent adjuster who represents the interest of the insurer;
        • a public adjuster who represents the financial interest of the insured; and
        • a crop adjuster who acts as an adjuster for claims arising under crop insurance.




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                               -1-                                       SHB 1037
     To qualify for a resident adjuster license to work in Washington State, adjusters must take
     an exam, have at least 12 months of experience, complete specific training requirements, be
     a resident of the state, and meet certain other criteria required in law and by rule. A
     nonresident adjuster license may be issued to applicants who have a license in good
     standing in their home state, or have taken an adjuster exam in Washington State if their
     home state does not issue an adjuster license. The Office of the Insurance Commissioner
     (OIC) licenses adjusters.

     The Appraisal Clause. In a property and casualty insurance contract, an appraisal clause
     allows either the insurer or the insured to demand a compulsory appraisal of damaged
     property if there is a dispute as to its value, and establishes the procedure in which the
     appraisal occurs.

     Summary of Bill: Definition of Adjuster, Appraiser, and Umpire. The definition of
     adjuster is amended to clarify the role of the adjuster in an insurance claim. The amended
     definition establishes that an adjuster may be the person who investigates and negotiates a
     settlement for insurance claims or the person who applies the factual circumstances of an
     insurance claim arising under property and casualty contracts. The definition explicitly
     excludes an appraiser or umpire functioning under the appraisal clause in an insurance
     contract.

     An appraiser is defined as a person selected by the insurer or the insured to place value or
     estimate the amount of loss under an appraisal clause.

     An umpire is defined as a person selected by the appraiser representing the insurer and the
     insurers or, if there is a disagreement, by the court to resolve differences between
     appraisers.

     Continuing Education for Adjusters. Minimum continuing education requirements for the
     renewal or reissuance of an adjuster license may be established by rule for independent
     adjusters and public adjusters.

     Nonresident Independent Adjuster. During a state of emergency as proclaimed by the
     Governor, a nonresident adjuster may register with the OIC by providing certain
     information including where their home state is, where they are licensed, and which insurer
     they are representing, among other information.

     An emergency adjuster must not operate longer than 180 days, unless extended by the OIC,
     is subject to all disciplinary provisions and penalties under state law and rule, and is subject
     to the courts concerning civil liability.

     Appropriation: None.



Senate Bill Report                              -2-                                        SHB 1037
     Fiscal Note: Not requested.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: During a state of emergency the supply of
     local insurance adjusters will be stretched beyond its capabilities. Allowing for nonresident
     adjusters to register allows for them to work in the state to assist. There is no fee with this
     registration and is similar to the policies in other states. Having continuing education
     requirements also aligns with other states. Clarifying the definition of insurance adjuster
     will help with regulatory enforcement and reciprocity with other states. There is some
     confusion in Washington State regarding the role of adjusters and the role of appraisers
     because of an administrative law judge opinion. Appraisers are their to assist, they are not
     adjusters. This bill clears up ambiguity in current law and will help settle claims.

     Persons Testifying: PRO: David Forte, Office of the Insurance Commissioner; Jon Noski,
     Office of the Insurance Commissioner; Jean Leonard, J.S. Held LLC.

     Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                              -3-                                       SHB 1037


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