SENATE BILL NO. 1397

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S1397aa.....................................by COMMERCE AND HUMAN RESOURCES
PUBLIC ADJUSTER LICENSING ACT - Adds to existing law relating to insurance
to enact the "Public Adjuster Licensing Act"; to provide the purpose; to
define terms; to require a license for a person to be a public adjuster; to
provide for license application; to provide for exams; to provide for
nonresident license reciprocity; to provide for bond or letter of credit;
to provide for continuing education; to provide for contracts between the
public adjuster and the insured; to provide for records; and to provide for
standards of conduct.

02/08    Senate intro - 1st rdg - to printing
02/11    Rpt prt - to Com/HuRes
02/18    Rpt out - rec d/p - to 2nd rdg
    To 14th Ord
02/19    Rpt out amen - to engros
02/20    Rpt engros - 1st rdg - to 2nd rdg as amen
02/21    2nd rdg - to 3rd rdg as amen
02/25    3rd rdg as amen - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
      Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Coiner, Gannon
    Floor Sponsor - Goedde
    Title apvd - to House
02/26    House intro - 1st rdg - to Bus
03/06    Rpt out - rec d/p - to 2nd rdg
03/07    2nd rdg - to 3rd rdg
03/12    3rd rdg - PASSED - 64-4-2
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
      Chavez, Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
      LeFavour, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
      Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ringo,
      Roberts, Rusche, Sayler, Schaefer, Shepherd(02), Shirley, Shively,
      Smith(30), Smith(24), Snodgrass, Stevenson, Thomas, Trail, Vander
      Woude, Wills, Wood(27), Mr. Speaker
      NAYS -- Harwood, Shepherd(08), Thayn, Wood(35)
      Absent and excused -- Loertscher, Ruchti
    Floor Sponsor - Snodgrass
    Title apvd - to Senate
03/13    To enrol - Rpt enrol - Pres signed
03/14    Sp signed
03/17    To Governor
03/18    Governor signed
         Session Law Chapter 179
         Section 41-5805 effective when a state
         participates in NAIC's central registry;
         07/01/08 All other sections

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                                       IN THE SENATE

                                    SENATE BILL NO. 1397

                         BY COMMERCE AND HUMAN RESOURCES COMMITTEE

  1                                        AN ACT
  2    RELATING TO PUBLIC ADJUSTING; AMENDING TITLE 41, IDAHO  CODE, BY THE  ADDITION
  3        OF  A  NEW  CHAPTER  58, TITLE 41, IDAHO CODE,  TO PROVIDE FOR PURPOSE AND
  4        SCOPE, TO DEFINE TERMS, TO REQUIRE A LICENSE, TO PROVIDE FOR EXCEPTIONS TO
  5        LICENSING, TO PROVIDE FOR APPLICATION FOR LICENSE, TO PROVIDE FOR  LICENSE
  6        QUALIFICATIONS, TO PROVIDE FOR EXAMINATION, TO PROVIDE FOR EXEMPTIONS FROM
  7        EXAMINATION,  TO  PROVIDE  FOR NONRESIDENT LICENSE RECIPROCITY, TO PROVIDE
  8        FOR LICENSE, TO PROVIDE FOR LICENSE DENIAL, NONRENEWAL OR  REVOCATION,  TO
  9        REQUIRE BOND OR LETTER OF CREDIT, TO REQUIRE CONTINUING EDUCATION, TO PRO-
 10        VIDE LIMITATIONS OF FEES PAID BY PUBLIC ADJUSTER, TO PROVIDE FOR CONTRACTS
 11        BETWEEN  PUBLIC  ADJUSTERS  AND  INSURED,  TO  PROVIDE FOR ESCROW OR TRUST
 12        ACCOUNTS, TO PROVIDE FOR RECORD RETENTION, TO PROVIDE STANDARDS OF CONDUCT
 13        OF PUBLIC ADJUSTER, TO PROVIDE FOR REPORTING OF ACTIONS, TO GRANT  AUTHOR-
 14        ITY  TO  PROMULGATE  RULES AND TO PROVIDE FOR SEVERABILITY; AND TO PROVIDE
 15        FOR AN EFFECTIVE DATE WITH A CONTINGENCY.

 16    Be It Enacted by the Legislature of the State of Idaho:

 17        SECTION 1.  That Title 41, Idaho Code, be, and the same is hereby  amended
 18    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 19    ter 58, Title 41, Idaho Code, and to read as follows:

 20                                      CHAPTER 58
 21                            PUBLIC ADJUSTER LICENSING ACT

 22        41-5801.  PURPOSE AND SCOPE. This chapter governs the  qualifications  and
 23    procedures  for  the licensing of public adjusters. It specifies the duties of
 24    and restrictions on public adjusters, which include limiting  their  licensure
 25    to assisting insureds in first party claims.

 26        41-5802.  DEFINITIONS. As used in this chapter:
 27        (1)  "Apprentice  public adjuster" means an individual who is qualified in
 28    all respects as a public adjuster except as to  experience,  education  and/or
 29    training.
 30        (2)  "Business entity" means a corporation, association, partnership, lim-
 31    ited liability company, limited liability partnership or other legal entity.
 32        (3)  "Catastrophic  disaster,"  according  to  the  federal response plan,
 33    means an event that results in large numbers of deaths  and  injuries;  causes
 34    extensive  damage  or destruction of facilities that provide and sustain human
 35    needs; produces an overwhelming demand on state and local  response  resources
 36    and mechanisms; causes a severe long-term effect on general economic activity;
 37    and severely affects state, local and private sector capabilities to begin and
 38    sustain  response activities. A catastrophic disaster shall be declared by the
 39    president of the United States or the governor of the  state  or  district  in
 40    which the disaster occurred.
 41        (4)  "Fingerprints"  means  an impression of the lines on the finger taken

                                       2

  1    for purpose of identification. The impression may be electronic or in ink con-
  2    verted to electronic format.
  3        (5)  "Home state" means the District of Columbia or any state or territory
  4    of the United States in which the public adjuster's principal place  of  resi-
  5    dence or principal place of business is located. If neither the state in which
  6    the  public  adjuster maintains the principal place of residence nor the state
  7    in which the public adjuster maintains the principal place of business  has  a
  8    substantially  similar law governing public adjusters, the public adjuster may
  9    declare another state in which it  becomes  licensed  and  acts  as  a  public
 10    adjuster to be the home state.
 11        (6)  "Individual" means a natural person.
 12        (7)  "Person" means an individual or a business entity.
 13        (8)  "Public adjuster" means any person who, for compensation or any other
 14    thing of value on behalf of the insured:
 15        (a)  Acts  or aids, solely in relation to first party claims arising under
 16        insurance contracts that insure the  real  or  personal  property  of  the
 17        insured, on behalf of an insured in negotiating for, or effecting the set-
 18        tlement of, a claim for loss or damage covered by an insurance contract;
 19        (b)  Advertises for employment as a public adjuster of insurance claims or
 20        solicits business or represents himself or herself to the public as a pub-
 21        lic adjuster of first party insurance claims for losses or damages arising
 22        out of policies of insurance that insure real or personal property; or
 23        (c)  Directly  or  indirectly  solicits  business, investigates or adjusts
 24        losses, or advises an insured about first party claims for losses or  dam-
 25        ages  arising  out  of  policies of insurance that insure real or personal
 26        property for another person engaged in the business of adjusting losses or
 27        damages covered by an insurance policy, for the insured.

 28        41-5803.  LICENSE REQUIRED. (1) A person shall not act or hold himself out
 29    as a public adjuster in this state unless the person is licensed as  a  public
 30    adjuster in accordance with this chapter.
 31        (2)  A  person  licensed  as a public adjuster shall not misrepresent to a
 32    claimant that he or she is an adjuster representing an insurer in  any  capac-
 33    ity,  including  acting as an employee of the insurer or acting as an indepen-
 34    dent adjuster unless so appointed by an insurer  in  writing  to  act  on  the
 35    insurer's  behalf  for  that  specific  claim  or  purpose.  A licensed public
 36    adjuster is prohibited  from  charging  that  specific  claimant  a  fee  when
 37    appointed  by  the  insurer  and  the  appointment  is  accepted by the public
 38    adjuster.

 39        41-5804.  EXCEPTIONS TO LICENSING. Notwithstanding section 41-5803,  Idaho
 40    Code,  a license as a public adjuster shall not be required of the following:
 41        (1)  An attorney admitted to practice in this state, when acting in his or
 42    her professional capacity as an attorney;
 43        (2)  A  producer  licensed  in Idaho who acts only on behalf of his or her
 44    own insured and does not hold himself or herself out to the public as a public
 45    adjuster;
 46        (3)  A person who negotiates or settles claims arising  under  a  life  or
 47    health insurance policy or an annuity contract;
 48        (4)  A person employed only for the purpose of obtaining facts surrounding
 49    a  loss  or  furnishing  technical  assistance  to  a licensed public adjuster
 50    including, but not limited to, photographers, estimators, private  investigat-
 51    ors, engineers and handwriting experts;
 52        (5)  A  licensed  health  care  provider, or employee of a licensed health
 53    care provider, who prepares or files a  health  claim  form  on  behalf  of  a

                                       3

  1    patient; or
  2        (6)  A person who settles subrogation claims between insurers.

  3        41-5805.  APPLICATION  FOR  LICENSE.  (1)  A  person applying for a public
  4    adjuster license shall make application to the department  on  an  application
  5    form prescribed by the department.
  6        (2)  The  applicant  shall declare under penalty of perjury and under pen-
  7    alty of refusal, suspension or revocation of the license that  the  statements
  8    made  in  the  application  are  true, correct and complete to the best of the
  9    applicant's knowledge and belief.
 10        (3)  In order to make a determination of license eligibility, the  depart-
 11    ment  is  authorized  to  require  fingerprints  of  applicants and submit the
 12    fingerprints and the fee required  to  perform  the  criminal  history  record
 13    checks to the Idaho state police and the federal bureau of investigation (FBI)
 14    for  state  and  national criminal history record checks; the department shall
 15    require a criminal history record check on each applicant in  accordance  with
 16    this chapter. The department shall require each applicant to submit a full set
 17    of  fingerprints  in  order  for the department to obtain and receive national
 18    criminal history records from the FBI criminal  justice  information  services
 19    division.
 20        (a)  The  department  may  contract  for  the collection, transmission and
 21        resubmission of fingerprints required under this section. If  the  depart-
 22        ment   does  so,  the  fee  for  collecting,  transmitting  and  retaining
 23        fingerprints shall be payable directly to the contractor  by  the  person.
 24        The  department may agree to a reasonable fingerprinting fee to be charged
 25        by the contractor.
 26        (b)  The department is  authorized  to  receive  criminal  history  record
 27        information  in  lieu  of  the  Idaho  state  police  that  submitted  the
 28        fingerprints to the FBI.

 29        41-5806.  LICENSE  QUALIFICATIONS.  (1)  Before  issuing a public adjuster
 30    license to an applicant under this section, the department shall find that the
 31    applicant:
 32        (a)  Is at least eighteen (18) years of age;
 33        (b)  Is eligible to designate this state as his or her home state or is  a
 34        nonresident  who  is  eligible  for a license under section 41-5809, Idaho
 35        Code;
 36        (c)  Has successfully passed the public adjuster examination;
 37        (d)  Has not committed any act that is a ground for denial, suspension  or
 38        revocation of a license as set forth in section 41-5811, Idaho Code;
 39        (e)  Is  trustworthy,  reliable, and of good reputation, evidence of which
 40        may be determined by the department;
 41        (f)  Is financially responsible to exercise the license and  has  provided
 42        proof  of  financial  responsibility as required in section 41-5812, Idaho
 43        Code;
 44        (g)  Has paid the fees set forth  by  rule  adopted  pursuant  to  section
 45        41-401, Idaho Code; and
 46        (h)  Maintains an office in the home state of residence with public access
 47        by  reasonable  appointment and/or regular business hours. This includes a
 48        designated office within a home state of residence.
 49        (2)  In addition to satisfying the requirements of  subsection  (1),  when
 50    applicable, a business entity shall:
 51        (a)  Designate  a  licensed individual public adjuster responsible for the
 52        business entity's compliance with the insurance laws  and  rules  of  this
 53        state;

                                       4

  1        (b)  Designate  only  licensed individual public adjusters to exercise the
  2        business entity's license; and
  3        (c)  The department may require any documents reasonably necessary to ver-
  4        ify the information contained in the application.

  5        41-5807.  EXAMINATION. (1) An individual applying for  a  public  adjuster
  6    license under this chapter shall pass a written examination unless exempt pur-
  7    suant to section 41-5808, Idaho Code. The examination shall test the knowledge
  8    of  the  individual  concerning  the  duties  and responsibilities of a public
  9    adjuster and the insurance laws and rules of this state. Examinations required
 10    by this section shall be developed and conducted under rules prescribed by the
 11    department.
 12        (2)  The department may make arrangements, including contracting  with  an
 13    outside  testing  service,  for  administering examinations and collecting the
 14    nonrefundable fee set forth by rule of the department.
 15        (3)  Each individual applying for an examination shall remit a  nonrefund-
 16    able  fee  as  prescribed  by  the  department in an amount set by rule of the
 17    department adopted pursuant to section 41-401, Idaho Code.
 18        (4)  An individual who fails to appear for the examination as scheduled or
 19    fails to pass the examination shall reapply for an examination and  remit  all
 20    required fees and forms before being rescheduled for another examination.

 21        41-5808.  EXEMPTIONS FROM EXAMINATION. (1) An individual who applies for a
 22    public  adjuster license in this state who was previously licensed as a public
 23    adjuster in another state based on a public adjuster examination shall not  be
 24    required  to  complete  any  prelicensing  examination. This exemption is only
 25    available if the person is currently licensed in that state or if  the  person
 26    applies for a license in this state within ninety (90) days of cancellation of
 27    the applicant's previous license and if the prior state issues a certification
 28    that,  at the time of cancellation, the applicant was in good standing in that
 29    state or the state's producer database records or records  maintained  by  the
 30    national  association  of  insurance  commissioners (NAIC), its affiliates, or
 31    subsidiaries, indicate that the public adjuster is or was licensed and in good
 32    standing.
 33        (2)  A person licensed as a public adjuster in another state  based  on  a
 34    public  adjuster  examination  who  moves to this state shall make application
 35    within ninety (90) days of establishing legal residence to become  a  resident
 36    licensee  pursuant to section 41-5805, Idaho Code. No prelicensing examination
 37    shall be required of that person to obtain a public adjuster license.
 38        (3)  An individual who applies for a public adjuster license in this state
 39    who was previously licensed as a public adjuster in this state  shall  not  be
 40    required  to  complete  any  prelicensing  examination. This exemption is only
 41    available if the application is received within twelve (12) months of the can-
 42    cellation of the applicant's previous license in this state  and  if,  at  the
 43    time of cancellation, the applicant was in good standing in this state.
 44        (4)  A  licensed  individual  who  moves and establishes residency in this
 45    state must apply for a resident license within ninety (90) days of  establish-
 46    ing  residency  here  and  must  relinquish his or her resident license in the
 47    former home state.

 48        41-5809.  NONRESIDENT LICENSE RECIPROCITY.  (1)  Unless  denied  licensure
 49    pursuant  to  sections  41-5810  or  41-5811, Idaho Code, a nonresident person
 50    shall receive a nonresident public adjuster license if:
 51        (a)  The person is currently licensed as a resident public adjuster and in
 52        good standing in his or her home state;

                                       5

  1        (b)  The person has submitted the proper request for licensure,  has  paid
  2        the  fees  required  by rule of the department adopted pursuant to section
  3        41-5806(1)(g), Idaho Code, and has provided proof of  financial  responsi-
  4        bility as required in section 41-5812, Idaho Code;
  5        (c)  The  person has submitted or transmitted to the department the appro-
  6        priate completed application for licensure; and
  7        (d)  The person's home state awards nonresident public  adjuster  licenses
  8        to residents of this state on the same basis.
  9        (2)  The  department  may  verify  the  public adjuster's licensing status
 10    through the producer database maintained by the NAIC, its affiliates, or  sub-
 11    sidiaries.
 12        (3)  As  a  condition  to continuation of a public adjuster license issued
 13    under this section, the licensee shall maintain  a  resident  public  adjuster
 14    license  in  his  or  her  home state. The nonresident public adjuster license
 15    issued under this section shall terminate and be  surrendered  immediately  to
 16    the  department  if  the home state public adjuster license terminates for any
 17    reason, unless the public adjuster has been issued a  license  as  a  resident
 18    public  adjuster  in  his  or her new home state. Notification to the state or
 19    states where a nonresident license is issued must be made as soon as possible,
 20    within thirty (30) days of the change  in  new  state  resident  license.  The
 21    licensee  shall include new and old addresses. A new state resident license is
 22    required for nonresident licenses to remain  valid.  The  new  state  resident
 23    license  must have reciprocity with the licensing nonresident state(s) for the
 24    nonresident license not to terminate.

 25        41-5810.  LICENSE. (1) Unless denied licensure under this chapter, persons
 26    who have met the requirements  of  this  chapter  shall  be  issued  a  public
 27    adjuster license.
 28        (2)  A public adjuster license shall remain in effect unless revoked, ter-
 29    minated  or suspended as long as the request for renewal and the fee set forth
 30    in the rule promulgated under section 41-5806(1)(g), Idaho Code, is  paid  and
 31    any other requirements for license renewal are met by the due date.
 32        (3)  The  licensee  shall inform the department by any means acceptable to
 33    the department of a change of address, change of  legal  name,  or  change  of
 34    information  submitted  on  the  application  within  thirty  (30) days of the
 35    change.
 36        (4)  A public adjuster who allows his or her license to lapse may,  within
 37    twelve (12) months from the due date of the renewal, reinstate his or her pub-
 38    lic adjuster license upon the department's receipt of the request for renewal,
 39    payment of a penalty in the amount of double the unpaid renewal fee and certi-
 40    fication  that  all  continuing  education requirements have been met. The new
 41    public adjuster license shall be effective the date  the  department  receives
 42    all of the above stated items required for reinstatement.
 43        (5)  A  licensed  public  adjuster  who  is  unable to comply with license
 44    renewal procedures due to military service, a long-term medical disability  or
 45    some other extenuating circumstance, may request a waiver of those procedures.
 46    The  public adjuster may also request a waiver of any examination requirement,
 47    fine or other sanction imposed for failure to comply with renewal procedures.
 48        (6)  The license shall contain the licensee's  name,  city  and  state  of
 49    business  address,  license  number, the date of issuance, the expiration date
 50    and any other information the department deems necessary.
 51        (7)  In order to assist in the performance of the department's duties, the
 52    department may contract with nongovernmental entities, including the  NAIC  or
 53    any affiliates or subsidiaries that the NAIC oversees, to perform any ministe-
 54    rial  functions, including the collection of fees and data, related to licens-

                                       6

  1    ing that the department may deem appropriate.

  2        41-5811.  LICENSE DENIAL, NONRENEWAL OR REVOCATION. (1) The department may
  3    place on probation, suspend, revoke or refuse  to  issue  or  renew  a  public
  4    adjuster's  license  or  may  levy  a civil penalty in accordance with section
  5    41-1016, Idaho Code, or any combination of actions, for any one (1) or more of
  6    the following causes:
  7        (a)  Providing incorrect,  misleading,  incomplete  or  materially  untrue
  8        information in the license application;
  9        (b)  Violating any insurance laws, or violating any rule, regulation, sub-
 10        poena  or  order of the department or of another state's insurance depart-
 11        ment;
 12        (c)  Obtaining or attempting to obtain a license through misrepresentation
 13        or fraud;
 14        (d)  Improperly withholding, misappropriating or converting any moneys  or
 15        properties received in the course of doing insurance business;
 16        (e)  Intentionally  misrepresenting  the  terms  of  an actual or proposed
 17        insurance contract or application for insurance;
 18        (f)  Having been convicted of a felony, or a misdemeanor  which  evidences
 19        bad moral character, dishonesty, a lack of integrity and financial respon-
 20        sibility,  or  an unfitness and inability to provide acceptable service to
 21        the consuming public;
 22        (g)  Having admitted to or been found  to  have  committed  any  insurance
 23        unfair trade practice or insurance fraud;
 24        (h)  Using  fraudulent,  coercive or dishonest practices; or demonstrating
 25        incompetence, untrustworthiness or financial irresponsibility in the  con-
 26        duct of business in this state or elsewhere;
 27        (i)  Having  an insurance license, or its equivalent, denied, suspended or
 28        revoked in any other state, province, district or territory;
 29        (j)  Forging another's name to an application for insurance or to any doc-
 30        ument related to an insurance transaction;
 31        (k)  Cheating, including improperly using notes  or  any  other  reference
 32        material, to complete an examination for an insurance license;
 33        (l)  Knowingly  accepting insurance business from an individual who is not
 34        licensed but who is required to be licensed by the department;
 35        (m)  Failing to comply with an administrative or court  order  imposing  a
 36        child support obligation, provided however, that nothing in this provision
 37        shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code; or
 38        (n)  Failing  to pay state income tax or comply with any administrative or
 39        court order directing payment of state income tax.
 40        (2)  The license of a business entity may be suspended, revoked or refused
 41    if the department finds, after hearing, that an individual  licensee's  viola-
 42    tion  was  known or should have been known by one (1) or more of the partners,
 43    officers or managers acting on behalf of the business entity and the violation
 44    was neither reported to the department nor corrective action taken.
 45        (3)  In addition to or in lieu of any  applicable  denial,  suspension  or
 46    revocation  of  a  license, a person may, after hearing, be subject to a civil
 47    fine or administrative penalty according to section 41-1016, Idaho Code.
 48        (4)  The department shall retain the authority to enforce  the  provisions
 49    of  and  impose any penalty or remedy authorized by this chapter and title 41,
 50    Idaho Code, against any person who is under investigation for or charged  with
 51    a  violation  of  this  chapter  or title 41, Idaho Code, even if the person's
 52    license or registration has been surrendered or has  lapsed  by  operation  of
 53    law.

                                       7

  1        41-5812.  BOND  OR  LETTER  OF CREDIT. Prior to issuance of a license as a
  2    public adjuster and for the duration  of  the  license,  the  applicant  shall
  3    secure  evidence  of  financial  responsibility  in a format prescribed by the
  4    department through a security bond or irrevocable letter of credit.
  5        (1)  A surety bond executed and issued by an insurer authorized  to  issue
  6    surety bonds in this state, which bond:
  7        (a)  Shall be in the minimum amount of twenty thousand dollars ($20,000);
  8        (b)  Shall  be  in  favor  of  this state and shall specifically authorize
  9        recovery by the department on behalf of any person in this state who  sus-
 10        tained  damages as the result of erroneous acts, a failure to act, convic-
 11        tion of fraud, or conviction of unfair practices in his or her capacity as
 12        a public adjuster; and
 13        (c)  Shall not be terminated unless at least thirty (30) days' prior writ-
 14        ten notice will have been filed with  the  department  and  given  to  the
 15        licensee.
 16        (2)  An  irrevocable  letter  of  credit  issued  by a qualified financial
 17    institution, which letter of credit:
 18        (a)  Shall be in the minimum amount of twenty thousand dollars ($20,000);
 19        (b)  Shall be to an account within the department and  subject  to  lawful
 20        levy  of execution on behalf of any person to whom the public adjuster has
 21        been found to be legally liable as the result of erroneous acts, a failure
 22        to act, fraudulent acts, or unfair practices in his or her capacity  as  a
 23        public adjuster; and
 24        (c)  Shall not be terminated unless at least thirty (30) days' prior writ-
 25        ten  notice  will  have  been  filed  with the department and given to the
 26        licensee.
 27        (3)  The issuer of the evidence of financial responsibility  shall  notify
 28    the department upon termination of the bond or letter of credit, unless other-
 29    wise directed by the department.
 30        (4)  The  department  may ask for the evidence of financial responsibility
 31    at any time deemed relevant.
 32        (5)  The authority to act as a public adjuster shall automatically  termi-
 33    nate  if  the  evidence  of  financial  responsibility  terminates  or becomes
 34    impaired.

 35        41-5813.  CONTINUING EDUCATION. (1) An  individual,  who  holds  a  public
 36    adjuster  license and who is not exempt under subsection (2)  of this section,
 37    shall satisfactorily complete a minimum of twenty-four (24) hours of  continu-
 38    ing education courses, including three (3) hours of law or ethics, reported on
 39    a biennial basis in conjunction with the license renewal cycle.
 40        (2)  This section shall not apply to:
 41        (a)  Licensees  not licensed for one (1) full year prior to the end of the
 42        applicable continuing education biennium; or
 43        (b)  Licensees holding nonresident public adjuster licenses who  have  met
 44        the  continuing  education requirements of their home state and whose home
 45        state gives credit to residents of this state on the same basis.
 46        (3)  Only continuing education courses approved by the department shall be
 47    used to satisfy the continuing education requirement of subsection (1) of this
 48    section.
 49        (4)  Failure of the licensee  to  comply  with  the  applicable  education
 50    requirement  by  the  expiration  date of the license shall be grounds for the
 51    director to refuse to continue any such license. The  licensee  may  reinstate
 52    his  or  her  license by submitting proof of all education requirements within
 53    ninety (90) days from the date of expiration of the license and by  submitting
 54    an  additional  administrative  penalty  of  one  hundred dollars ($100) for a

                                       8

  1    delinquency of one (1) day to thirty (30) days, two hundred dollars ($200) for
  2    a delinquency of thirty-one (31) days to sixty (60) days,  and  three  hundred
  3    dollars  ($300)  for a delinquency of sixty-one (61) days to ninety (90) days.
  4    Following the ninetieth day from the date of nonrenewal of the license and  up
  5    to  one  (1)  year  from  the  nonrenewal date, the licensee must complete all
  6    requirements for licensure including retesting, submission of a  new  applica-
  7    tion  and payment of all new licensing fees.  In addition, the individual must
  8    submit proof of completion of the required  education  requirements  from  the
  9    licensing  period  in which the license was terminated.  After the license has
 10    been expired for one (1) year or more, the individual must reapply and  retest
 11    as a new applicant.

 12        41-5814.  PUBLIC ADJUSTER FEES. (1) A public adjuster shall not pay a com-
 13    mission,  service fee or other valuable consideration to a person for investi-
 14    gating or settling claims in this state if  that  person  is  required  to  be
 15    licensed under this chapter and is not so licensed.
 16        (2)  A person shall not accept a commission, service fee or other valuable
 17    consideration  for investigating or settling claims in this state if that per-
 18    son is required to be licensed under this chapter and is not so licensed.
 19        (3)  A public adjuster may pay or assign commission, service fees or other
 20    valuable consideration to persons who do not investigate or settle  claims  in
 21    this state, unless the payment would violate section 41-1314, Idaho Code.

 22        41-5815.  CONTRACT BETWEEN PUBLIC ADJUSTER AND INSURED. (1) Public adjust-
 23    ers shall ensure that all contracts for their services are in writing and con-
 24    tain the following terms:
 25        (a)  Legible  full name of the adjuster signing the contract, as specified
 26        in department records;
 27        (b)  Permanent home state business address and phone number;
 28        (c)  Department license number;
 29        (d)  Title of "public adjuster contract";
 30        (e)  Insured's full name, street address, insurance company name and  pol-
 31        icy number, if known, or upon notification;
 32        (f)  Description of the loss and its location, if applicable;
 33        (g)  Description of services to be provided to the insured;
 34        (h)  Signatures of the public adjuster and the insured;
 35        (i)  Date contract was signed by the public adjuster and date the contract
 36        was signed by the insured;
 37        (j)  Attestation language stating that the public adjuster is fully bonded
 38        pursuant to state law; and
 39        (k)  Full  salary,  fee,  commission, compensation or other considerations
 40        the public adjuster is to receive for services.
 41        (2)  The contract may specify that the public adjuster shall be named as a
 42    co-payee on an insurer's payment of a claim.
 43        (a)  If the compensation is based on a share of the insurance  settlement,
 44        the exact percentage shall be specified.
 45        (b)  Initial  expenses  to  be  reimbursed to the public adjuster from the
 46        proceeds of the claim payment shall be  specified  by  type,  with  dollar
 47        estimates set forth in the contract and with any additional expenses first
 48        approved by the insured.
 49        (3)  If  the insurer, not later than seventy-two (72) hours after the date
 50    on which the loss is reported to the insurer, either pays or commits in  writ-
 51    ing to pay to the insured the policy limit of the insurance policy, the public
 52    adjuster shall:
 53        (a)  Not  receive  a  commission  consisting  of a percentage of the total

                                       9

  1        amount paid by an insurer to resolve a claim;
  2        (b)  Inform the insured  that  the  loss  recovery  amount  might  not  be
  3        increased by insurer; and
  4        (c)  Be entitled only to reasonable compensation from the insured for ser-
  5        vices  provided  by the public adjuster on behalf of the insured, based on
  6        the time spent on a claim and expenses incurred by  the  public  adjuster,
  7        until  the  claim  is paid or the insured receives a written commitment to
  8        pay from the insurer.
  9        (4)  A public adjuster shall provide the insured a written disclosure con-
 10    cerning any direct or indirect financial interest that the public adjuster has
 11    with any other party that is involved in any aspect of the claim,  other  than
 12    the  salary, fee, commission or other consideration established in the written
 13    contract with the insured including, but not limited  to,  any  ownership  of,
 14    other  than  as  a  minority  stockholder,  or any compensation expected to be
 15    received from, any construction firm, salvage firm, building  appraisal  firm,
 16    motor vehicle repair shop, or any other firm that provides estimates for work,
 17    or  that  performs any work, in conjunction with damages caused by the insured
 18    loss on which the public adjuster is engaged. The word  "firm"  shall  include
 19    any person.
 20        (5)  A public adjuster contract may not contain any contract term that:
 21        (a)  Allows  the  public  adjuster's  percentage  fee to be collected when
 22        money is due from an insurance company, but not paid,  or  that  allows  a
 23        public  adjuster  to collect the entire fee from the first check issued by
 24        an insurance company, rather than as a percentage of each check issued  by
 25        an insurance company;
 26        (b)  Requires  the  insured  to  authorize an insurance company to issue a
 27        check only in the name of the public adjuster;
 28        (c)  Imposes collection costs or late fees; or
 29        (d)  Precludes a public adjuster from pursuing civil remedies.
 30        (6)  Prior to the signing of the contract the public adjuster  shall  pro-
 31    vide the insured with a separate disclosure document regarding the claim proc-
 32    ess that states:
 33        (a)  Property  insurance  policies obligate the insured to present a claim
 34        to his or her insurance company for consideration.  There  are  three  (3)
 35        types of adjusters that could be involved in that process. The definitions
 36        of the three types are as follows:
 37             (i)   "Company  adjuster" means the insurance adjusters are employees
 38             of an insurance company. They represent the interest of the insurance
 39             company and are paid by the insurance company. They will  not  charge
 40             you a fee.
 41             (ii)  "Independent  adjuster" means the insurance adjusters are hired
 42             on a contract basis by an insurance company to represent  the  insur-
 43             ance company's interest in the settlement of the claim. They are paid
 44             by your insurance company. They will not charge you a fee.
 45             (iii) "Public adjuster" means the insurance adjusters do not work for
 46             any  insurance  company.  They  work for the insured to assist in the
 47             preparation, presentation and settlement of the  claim.  The  insured
 48             hires  them  by signing a contract agreeing to pay them a fee or com-
 49             mission based on a percentage of the settlement or  other  method  of
 50             compensation.
 51        (b)  The  insured  is  not  required to hire a public adjuster to help the
 52        insured meet his or her obligations under the policy, but has the right to
 53        do so.
 54        (c)  The insured has the right to initiate direct communications with  the
 55        insured's attorney, the insurer, the insurer's adjuster, and the insurer's

                                       10

  1        attorney,  or  any  other person regarding the settlement of the insured's
  2        claim.
  3        (d)  The public adjuster is  not  a  representative  or  employee  of  the
  4        insurer.
  5        (e)  The  salary, fee, commission or other consideration is the obligation
  6        of the insured, not the insurer.
  7        (7)  The contract shall be executed in duplicate to  provide  an  original
  8    contract  to the public adjuster, and an original contract to the insured. The
  9    public adjuster's original contract  shall  be  available  at  all  times  for
 10    inspection without notice by the department.
 11        (8)  The  public adjuster shall provide the insurer a notification letter,
 12    which has been signed by the insured, authorizing the public adjuster to  rep-
 13    resent the insured's interest.
 14        (9)  The  public  adjuster  shall  give  the insured written notice of the
 15    insured's rights as provided in this section.
 16        (10) The insured has the right to rescind the contract  within  three  (3)
 17    business  days after the date the contract was signed. The rescission shall be
 18    in writing and mailed or delivered to the public adjuster at  the  address  in
 19    the contract within the three (3) business day period.
 20        (11) If  the insured exercises the right to rescind the contract, anything
 21    of value given by the insured under the  contract  will  be  returned  to  the
 22    insured  within  twenty-eight  (28)  days  following the receipt by the public
 23    adjuster of the cancellation notice.

 24        41-5816.  ESCROW OR  TRUST  ACCOUNTS.  A  public  adjuster  who  receives,
 25    accepts  or holds any funds on behalf of an insured, towards the settlement of
 26    a claim for loss or damage, shall deposit the funds in a  noninterest  bearing
 27    escrow  or  trust  account  in  a  financial institution that is insured by an
 28    agency of the federal government in the public adjuster's home state or  where
 29    the loss occurred.

 30        41-5817.  RECORD  RETENTION.  (1)  A public adjuster shall maintain a com-
 31    plete record of each transaction as a public adjuster. The records required by
 32    this section shall include the following:
 33        (a)  Name of the insured;
 34        (b)  Date, location and amount of the loss;
 35        (c)  Copy of the contract between the public adjuster and insured;
 36        (d)  Name of the insurer, amount, expiration date and number of each  pol-
 37        icy carried with respect to the loss;
 38        (e)  Itemized statement of the insured's recoveries;
 39        (f)  Itemized  statement  of  all  compensation  received  by  the  public
 40        adjuster, from any source whatsoever, in connection with the loss;
 41        (g)  A  register of all moneys received, deposited, disbursed or withdrawn
 42        in connection with a transaction with an insured, including  fees,  trans-
 43        fers  and disbursements from a trust account and all transactions concern-
 44        ing all interest bearing accounts;
 45        (h)  Name of public adjuster who executed the contract;
 46        (i)  Name of the attorney representing the insured, if applicable, and the
 47        name of the claims representatives of the insurance company; and
 48        (j)  Evidence of financial responsibility in a format  prescribed  by  the
 49        department.
 50        (2)  Records  shall  be  maintained  for at least five (5) years after the
 51    termination of the transaction with an insured and shall be open  to  examina-
 52    tion by the department at all times.
 53        (3)  Records  submitted  to the department in accordance with this section

                                       11

  1    that contain information identified in writing as proprietary  by  the  public
  2    adjuster  shall  be treated as confidential by the department pursuant to sec-
  3    tion 9-340D, Idaho Code.

  4        41-5818.  STANDARDS OF CONDUCT OF PUBLIC ADJUSTER. (1) A  public  adjuster
  5    is obligated, under his or her license, to serve with objectivity and complete
  6    loyalty  the interest of his or her client alone; and to render to the insured
  7    such information, counsel and service, as within the knowledge,  understanding
  8    and  opinion  in  good faith of the licensee, as will best serve the insured's
  9    insurance claim needs and interests.
 10        (2)  A public adjuster shall  not  solicit,  or  attempt  to  solicit,  an
 11    insured  during the progress of a loss-producing occurrence, as defined in the
 12    insured's insurance contract.
 13        (3)  A public adjuster shall not permit an unlicensed employee  or  repre-
 14    sentative  of  the  public adjuster to conduct business for which a license is
 15    required under this chapter.
 16        (4)  A public adjuster shall not  have  a  direct  or  indirect  financial
 17    interest in any aspect of the claim, other than the salary, fee, commission or
 18    other  consideration  established  in  the  written contract with the insured,
 19    unless full written disclosure has been made to the insured as  set  forth  in
 20    section 41-5815(6), Idaho Code.
 21        (5)  A  public adjuster shall not acquire any interest in salvage of prop-
 22    erty subject to the contract with  the  insured  unless  the  public  adjuster
 23    obtains written permission from the insured after settlement of the claim with
 24    the insurer as set forth in section 41-5815(4), Idaho Code.
 25        (6)  The public adjuster shall disclose to an insured if he or she has any
 26    interest or will be compensated by any construction firm, salvage firm, build-
 27    ing  appraisal firm, motor vehicle repair shop or any other firm that performs
 28    any work in conjunction with damages caused by  the  insured  loss.  The  word
 29    "firm" shall include any person.
 30        (7)  Any compensation or anything of value in connection with an insured's
 31    specific loss that will be received by a public adjuster shall be disclosed by
 32    the public adjuster to the insured in writing, including the source and amount
 33    of any such compensation.
 34        (8)  Public  adjusters  shall  adhere  to  the  following  general ethical
 35    requirements:
 36        (a)  A public adjuster shall not undertake the adjustment of any claim  if
 37        the public adjuster is not competent and knowledgeable as to the terms and
 38        conditions  of the insurance coverage, or which otherwise exceeds the pub-
 39        lic adjuster's current expertise;
 40        (b)  A public adjuster shall not knowingly make any oral or written  mate-
 41        rial misrepresentations or statements which are false or maliciously crit-
 42        ical  and  intended to injure any person engaged in the business of insur-
 43        ance to any insured client or potential insured client;
 44        (c)  No public adjuster, while so licensed by the department,  may  repre-
 45        sent  or  act  as  a company adjuster or as an independent adjuster on the
 46        same claim;
 47        (d)  The contract shall not be construed to prevent an insured from pursu-
 48        ing any civil remedy after the three (3) business day revocation  or  can-
 49        cellation period;
 50        (e)  A  public  adjuster shall not enter into a contract or accept a power
 51        of attorney that vests in the public adjuster the effective  authority  to
 52        choose the persons who shall perform repair work; and
 53        (f)  A  public  adjuster  shall  ensure  that all contracts for the public
 54        adjuster's services are in writing and set forth all terms and  conditions

                                       12

  1        of the engagement.
  2        (9)  A  public  adjuster  may not agree to any loss settlement without the
  3    insured's knowledge and consent.

  4        41-5819.  REPORTING OF ACTIONS. (1) The public adjuster  shall  report  to
  5    the  department any administrative action taken against the public adjuster in
  6    another jurisdiction or by another governmental agency in  this  state  within
  7    thirty  (30)  days  of  the final disposition of the matter. This report shall
  8    include a copy of the order, consent to order, or other relevant  legal  docu-
  9    ments.
 10        (2)  Within  thirty  (30)  days  of the initial pretrial hearing date, the
 11    public adjuster shall report to the department any criminal prosecution of the
 12    public adjuster taken in any jurisdiction. The report shall include a copy  of
 13    the  initial  complaint  filed,  the order resulting from the hearing, and any
 14    other relevant legal documents.

 15        41-5820.  RULES. The department may, in accordance  with  section  41-211,
 16    Idaho  Code,  promulgate  reasonable rules as are necessary or proper to carry
 17    out the purposes of this chapter.

 18        41-5821.  SEVERABILITY. If any provisions of this chapter, or the applica-
 19    tion of a provision to any persons or circumstances, shall  be  held  invalid,
 20    the  remainder of the chapter, and the application of the provision to persons
 21    or circumstances other than those to which it is held invalid,  shall  not  be
 22    affected.

 23        SECTION  2.  This  act shall be in full force and effect on and after July
 24    1, 2008. Provided however, that the provisions of section 41-5805, Idaho Code,
 25    do not become effective until a  state  participates  in  the  NAIC's  central
 26    repository for the purpose of obtaining criminal background information.

Amendment




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                                                      Moved by    Goedde

                                                      Seconded by   Werk


                                       IN THE SENATE
                             SENATE AMENDMENT TO S.B. NO. 1397

  1                               AMENDMENTS TO SECTION 1
  2        On page 1 of the printed bill, delete lines 27 through  29;  in  line  30,
  3    delete  "(2)"  and  insert: "(1)"; delete lines 32 through 40; and in line 41,
  4    delete "(4)" and insert: "(2)".
  5        On page 2, in line 3, delete "(5)" and insert: "(3)"; in line  11,  delete
  6    "(6)"  and  insert:  "(4)"; in line 12, delete "(7)" and insert: "(5)"; and in
  7    line 13, delete "(8)" and insert: "(6)".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                                       IN THE SENATE

                              SENATE BILL NO. 1397, As Amended

                         BY COMMERCE AND HUMAN RESOURCES COMMITTEE

  1                                        AN ACT
  2    RELATING TO PUBLIC ADJUSTING; AMENDING TITLE 41, IDAHO  CODE, BY THE  ADDITION
  3        OF  A  NEW  CHAPTER  58, TITLE 41, IDAHO CODE,  TO PROVIDE FOR PURPOSE AND
  4        SCOPE, TO DEFINE TERMS, TO REQUIRE A LICENSE, TO PROVIDE FOR EXCEPTIONS TO
  5        LICENSING, TO PROVIDE FOR APPLICATION FOR LICENSE, TO PROVIDE FOR  LICENSE
  6        QUALIFICATIONS, TO PROVIDE FOR EXAMINATION, TO PROVIDE FOR EXEMPTIONS FROM
  7        EXAMINATION,  TO  PROVIDE  FOR NONRESIDENT LICENSE RECIPROCITY, TO PROVIDE
  8        FOR LICENSE, TO PROVIDE FOR LICENSE DENIAL, NONRENEWAL OR  REVOCATION,  TO
  9        REQUIRE BOND OR LETTER OF CREDIT, TO REQUIRE CONTINUING EDUCATION, TO PRO-
 10        VIDE LIMITATIONS OF FEES PAID BY PUBLIC ADJUSTER, TO PROVIDE FOR CONTRACTS
 11        BETWEEN  PUBLIC  ADJUSTERS  AND  INSURED,  TO  PROVIDE FOR ESCROW OR TRUST
 12        ACCOUNTS, TO PROVIDE FOR RECORD RETENTION, TO PROVIDE STANDARDS OF CONDUCT
 13        OF PUBLIC ADJUSTER, TO PROVIDE FOR REPORTING OF ACTIONS, TO GRANT  AUTHOR-
 14        ITY  TO  PROMULGATE  RULES AND TO PROVIDE FOR SEVERABILITY; AND TO PROVIDE
 15        FOR AN EFFECTIVE DATE WITH A CONTINGENCY.

 16    Be It Enacted by the Legislature of the State of Idaho:

 17        SECTION 1.  That Title 41, Idaho Code, be, and the same is hereby  amended
 18    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 19    ter 58, Title 41, Idaho Code, and to read as follows:

 20                                      CHAPTER 58
 21                            PUBLIC ADJUSTER LICENSING ACT

 22        41-5801.  PURPOSE AND SCOPE. This chapter governs the  qualifications  and
 23    procedures  for  the licensing of public adjusters. It specifies the duties of
 24    and restrictions on public adjusters, which include limiting  their  licensure
 25    to assisting insureds in first party claims.

 26        41-5802.  DEFINITIONS. As used in this chapter:
 27        (1)  "Business entity" means a corporation, association, partnership, lim-
 28    ited liability company, limited liability partnership or other legal entity.
 29        (2)  "Fingerprints"  means  an impression of the lines on the finger taken
 30    for purpose of identification. The impression may be electronic or in ink con-
 31    verted to electronic format.
 32        (3)  "Home state" means the District of Columbia or any state or territory
 33    of the United States in which the public adjuster's principal place  of  resi-
 34    dence or principal place of business is located. If neither the state in which
 35    the  public  adjuster maintains the principal place of residence nor the state
 36    in which the public adjuster maintains the principal place of business  has  a
 37    substantially  similar law governing public adjusters, the public adjuster may
 38    declare another state in which it  becomes  licensed  and  acts  as  a  public
 39    adjuster to be the home state.
 40        (4)  "Individual" means a natural person.
 41        (5)  "Person" means an individual or a business entity.

                                       2

  1        (6)  "Public adjuster" means any person who, for compensation or any other
  2    thing of value on behalf of the insured:
  3        (a)  Acts  or aids, solely in relation to first party claims arising under
  4        insurance contracts that insure the  real  or  personal  property  of  the
  5        insured, on behalf of an insured in negotiating for, or effecting the set-
  6        tlement of, a claim for loss or damage covered by an insurance contract;
  7        (b)  Advertises for employment as a public adjuster of insurance claims or
  8        solicits business or represents himself or herself to the public as a pub-
  9        lic adjuster of first party insurance claims for losses or damages arising
 10        out of policies of insurance that insure real or personal property; or
 11        (c)  Directly  or  indirectly  solicits  business, investigates or adjusts
 12        losses, or advises an insured about first party claims for losses or  dam-
 13        ages  arising  out  of  policies of insurance that insure real or personal
 14        property for another person engaged in the business of adjusting losses or
 15        damages covered by an insurance policy, for the insured.

 16        41-5803.  LICENSE REQUIRED. (1) A person shall not act or hold himself out
 17    as a public adjuster in this state unless the person is licensed as  a  public
 18    adjuster in accordance with this chapter.
 19        (2)  A  person  licensed  as a public adjuster shall not misrepresent to a
 20    claimant that he or she is an adjuster representing an insurer in  any  capac-
 21    ity,  including  acting as an employee of the insurer or acting as an indepen-
 22    dent adjuster unless so appointed by an insurer  in  writing  to  act  on  the
 23    insurer's  behalf  for  that  specific  claim  or  purpose.  A licensed public
 24    adjuster is prohibited  from  charging  that  specific  claimant  a  fee  when
 25    appointed  by  the  insurer  and  the  appointment  is  accepted by the public
 26    adjuster.

 27        41-5804.  EXCEPTIONS TO LICENSING. Notwithstanding section 41-5803,  Idaho
 28    Code,  a license as a public adjuster shall not be required of the following:
 29        (1)  An attorney admitted to practice in this state, when acting in his or
 30    her professional capacity as an attorney;
 31        (2)  A  producer  licensed  in Idaho who acts only on behalf of his or her
 32    own insured and does not hold himself or herself out to the public as a public
 33    adjuster;
 34        (3)  A person who negotiates or settles claims arising  under  a  life  or
 35    health insurance policy or an annuity contract;
 36        (4)  A person employed only for the purpose of obtaining facts surrounding
 37    a  loss  or  furnishing  technical  assistance  to  a licensed public adjuster
 38    including, but not limited to, photographers, estimators, private  investigat-
 39    ors, engineers and handwriting experts;
 40        (5)  A  licensed  health  care  provider, or employee of a licensed health
 41    care provider, who prepares or files a  health  claim  form  on  behalf  of  a
 42    patient; or
 43        (6)  A person who settles subrogation claims between insurers.

 44        41-5805.  APPLICATION  FOR  LICENSE.  (1)  A  person applying for a public
 45    adjuster license shall make application to the department  on  an  application
 46    form prescribed by the department.
 47        (2)  The  applicant  shall declare under penalty of perjury and under pen-
 48    alty of refusal, suspension or revocation of the license that  the  statements
 49    made  in  the  application  are  true, correct and complete to the best of the
 50    applicant's knowledge and belief.
 51        (3)  In order to make a determination of license eligibility, the  depart-
 52    ment  is  authorized  to  require  fingerprints  of  applicants and submit the

                                       3

  1    fingerprints and the fee required  to  perform  the  criminal  history  record
  2    checks to the Idaho state police and the federal bureau of investigation (FBI)
  3    for  state  and  national criminal history record checks; the department shall
  4    require a criminal history record check on each applicant in  accordance  with
  5    this chapter. The department shall require each applicant to submit a full set
  6    of  fingerprints  in  order  for the department to obtain and receive national
  7    criminal history records from the FBI criminal  justice  information  services
  8    division.
  9        (a)  The  department  may  contract  for  the collection, transmission and
 10        resubmission of fingerprints required under this section. If  the  depart-
 11        ment   does  so,  the  fee  for  collecting,  transmitting  and  retaining
 12        fingerprints shall be payable directly to the contractor  by  the  person.
 13        The  department may agree to a reasonable fingerprinting fee to be charged
 14        by the contractor.
 15        (b)  The department is  authorized  to  receive  criminal  history  record
 16        information  in  lieu  of  the  Idaho  state  police  that  submitted  the
 17        fingerprints to the FBI.

 18        41-5806.  LICENSE  QUALIFICATIONS.  (1)  Before  issuing a public adjuster
 19    license to an applicant under this section, the department shall find that the
 20    applicant:
 21        (a)  Is at least eighteen (18) years of age;
 22        (b)  Is eligible to designate this state as his or her home state or is  a
 23        nonresident  who  is  eligible  for a license under section 41-5809, Idaho
 24        Code;
 25        (c)  Has successfully passed the public adjuster examination;
 26        (d)  Has not committed any act that is a ground for denial, suspension  or
 27        revocation of a license as set forth in section 41-5811, Idaho Code;
 28        (e)  Is  trustworthy,  reliable, and of good reputation, evidence of which
 29        may be determined by the department;
 30        (f)  Is financially responsible to exercise the license and  has  provided
 31        proof  of  financial  responsibility as required in section 41-5812, Idaho
 32        Code;
 33        (g)  Has paid the fees set forth  by  rule  adopted  pursuant  to  section
 34        41-401, Idaho Code; and
 35        (h)  Maintains an office in the home state of residence with public access
 36        by  reasonable  appointment and/or regular business hours. This includes a
 37        designated office within a home state of residence.
 38        (2)  In addition to satisfying the requirements of  subsection  (1),  when
 39    applicable, a business entity shall:
 40        (a)  Designate  a  licensed individual public adjuster responsible for the
 41        business entity's compliance with the insurance laws  and  rules  of  this
 42        state;
 43        (b)  Designate  only  licensed individual public adjusters to exercise the
 44        business entity's license; and
 45        (c)  The department may require any documents reasonably necessary to ver-
 46        ify the information contained in the application.

 47        41-5807.  EXAMINATION. (1) An individual applying for  a  public  adjuster
 48    license under this chapter shall pass a written examination unless exempt pur-
 49    suant to section 41-5808, Idaho Code. The examination shall test the knowledge
 50    of  the  individual  concerning  the  duties  and responsibilities of a public
 51    adjuster and the insurance laws and rules of this state. Examinations required
 52    by this section shall be developed and conducted under rules prescribed by the
 53    department.

                                       4

  1        (2)  The department may make arrangements, including contracting  with  an
  2    outside  testing  service,  for  administering examinations and collecting the
  3    nonrefundable fee set forth by rule of the department.
  4        (3)  Each individual applying for an examination shall remit a  nonrefund-
  5    able  fee  as  prescribed  by  the  department in an amount set by rule of the
  6    department adopted pursuant to section 41-401, Idaho Code.
  7        (4)  An individual who fails to appear for the examination as scheduled or
  8    fails to pass the examination shall reapply for an examination and  remit  all
  9    required fees and forms before being rescheduled for another examination.

 10        41-5808.  EXEMPTIONS FROM EXAMINATION. (1) An individual who applies for a
 11    public  adjuster license in this state who was previously licensed as a public
 12    adjuster in another state based on a public adjuster examination shall not  be
 13    required  to  complete  any  prelicensing  examination. This exemption is only
 14    available if the person is currently licensed in that state or if  the  person
 15    applies for a license in this state within ninety (90) days of cancellation of
 16    the applicant's previous license and if the prior state issues a certification
 17    that,  at the time of cancellation, the applicant was in good standing in that
 18    state or the state's producer database records or records  maintained  by  the
 19    national  association  of  insurance  commissioners (NAIC), its affiliates, or
 20    subsidiaries, indicate that the public adjuster is or was licensed and in good
 21    standing.
 22        (2)  A person licensed as a public adjuster in another state  based  on  a
 23    public  adjuster  examination  who  moves to this state shall make application
 24    within ninety (90) days of establishing legal residence to become  a  resident
 25    licensee  pursuant to section 41-5805, Idaho Code. No prelicensing examination
 26    shall be required of that person to obtain a public adjuster license.
 27        (3)  An individual who applies for a public adjuster license in this state
 28    who was previously licensed as a public adjuster in this state  shall  not  be
 29    required  to  complete  any  prelicensing  examination. This exemption is only
 30    available if the application is received within twelve (12) months of the can-
 31    cellation of the applicant's previous license in this state  and  if,  at  the
 32    time of cancellation, the applicant was in good standing in this state.
 33        (4)  A  licensed  individual  who  moves and establishes residency in this
 34    state must apply for a resident license within ninety (90) days of  establish-
 35    ing  residency  here  and  must  relinquish his or her resident license in the
 36    former home state.

 37        41-5809.  NONRESIDENT LICENSE RECIPROCITY.  (1)  Unless  denied  licensure
 38    pursuant  to  sections  41-5810  or  41-5811, Idaho Code, a nonresident person
 39    shall receive a nonresident public adjuster license if:
 40        (a)  The person is currently licensed as a resident public adjuster and in
 41        good standing in his or her home state;
 42        (b)  The person has submitted the proper request for licensure,  has  paid
 43        the  fees  required  by rule of the department adopted pursuant to section
 44        41-5806(1)(g), Idaho Code, and has provided proof of  financial  responsi-
 45        bility as required in section 41-5812, Idaho Code;
 46        (c)  The  person has submitted or transmitted to the department the appro-
 47        priate completed application for licensure; and
 48        (d)  The person's home state awards nonresident public  adjuster  licenses
 49        to residents of this state on the same basis.
 50        (2)  The  department  may  verify  the  public adjuster's licensing status
 51    through the producer database maintained by the NAIC, its affiliates, or  sub-
 52    sidiaries.
 53        (3)  As  a  condition  to continuation of a public adjuster license issued

                                       5

  1    under this section, the licensee shall maintain  a  resident  public  adjuster
  2    license  in  his  or  her  home state. The nonresident public adjuster license
  3    issued under this section shall terminate and be  surrendered  immediately  to
  4    the  department  if  the home state public adjuster license terminates for any
  5    reason, unless the public adjuster has been issued a  license  as  a  resident
  6    public  adjuster  in  his  or her new home state. Notification to the state or
  7    states where a nonresident license is issued must be made as soon as possible,
  8    within thirty (30) days of the change  in  new  state  resident  license.  The
  9    licensee  shall include new and old addresses. A new state resident license is
 10    required for nonresident licenses to remain  valid.  The  new  state  resident
 11    license  must have reciprocity with the licensing nonresident state(s) for the
 12    nonresident license not to terminate.

 13        41-5810.  LICENSE. (1) Unless denied licensure under this chapter, persons
 14    who have met the requirements  of  this  chapter  shall  be  issued  a  public
 15    adjuster license.
 16        (2)  A public adjuster license shall remain in effect unless revoked, ter-
 17    minated  or suspended as long as the request for renewal and the fee set forth
 18    in the rule promulgated under section 41-5806(1)(g), Idaho Code, is  paid  and
 19    any other requirements for license renewal are met by the due date.
 20        (3)  The  licensee  shall inform the department by any means acceptable to
 21    the department of a change of address, change of  legal  name,  or  change  of
 22    information  submitted  on  the  application  within  thirty  (30) days of the
 23    change.
 24        (4)  A public adjuster who allows his or her license to lapse may,  within
 25    twelve (12) months from the due date of the renewal, reinstate his or her pub-
 26    lic adjuster license upon the department's receipt of the request for renewal,
 27    payment of a penalty in the amount of double the unpaid renewal fee and certi-
 28    fication  that  all  continuing  education requirements have been met. The new
 29    public adjuster license shall be effective the date  the  department  receives
 30    all of the above stated items required for reinstatement.
 31        (5)  A  licensed  public  adjuster  who  is  unable to comply with license
 32    renewal procedures due to military service, a long-term medical disability  or
 33    some other extenuating circumstance, may request a waiver of those procedures.
 34    The  public adjuster may also request a waiver of any examination requirement,
 35    fine or other sanction imposed for failure to comply with renewal procedures.
 36        (6)  The license shall contain the licensee's  name,  city  and  state  of
 37    business  address,  license  number, the date of issuance, the expiration date
 38    and any other information the department deems necessary.
 39        (7)  In order to assist in the performance of the department's duties, the
 40    department may contract with nongovernmental entities, including the  NAIC  or
 41    any affiliates or subsidiaries that the NAIC oversees, to perform any ministe-
 42    rial  functions, including the collection of fees and data, related to licens-
 43    ing that the department may deem appropriate.

 44        41-5811.  LICENSE DENIAL, NONRENEWAL OR REVOCATION. (1) The department may
 45    place on probation, suspend, revoke or refuse  to  issue  or  renew  a  public
 46    adjuster's  license  or  may  levy  a civil penalty in accordance with section
 47    41-1016, Idaho Code, or any combination of actions, for any one (1) or more of
 48    the following causes:
 49        (a)  Providing incorrect,  misleading,  incomplete  or  materially  untrue
 50        information in the license application;
 51        (b)  Violating any insurance laws, or violating any rule, regulation, sub-
 52        poena  or  order of the department or of another state's insurance depart-
 53        ment;

                                       6

  1        (c)  Obtaining or attempting to obtain a license through misrepresentation
  2        or fraud;
  3        (d)  Improperly withholding, misappropriating or converting any moneys  or
  4        properties received in the course of doing insurance business;
  5        (e)  Intentionally  misrepresenting  the  terms  of  an actual or proposed
  6        insurance contract or application for insurance;
  7        (f)  Having been convicted of a felony, or a misdemeanor  which  evidences
  8        bad moral character, dishonesty, a lack of integrity and financial respon-
  9        sibility,  or  an unfitness and inability to provide acceptable service to
 10        the consuming public;
 11        (g)  Having admitted to or been found  to  have  committed  any  insurance
 12        unfair trade practice or insurance fraud;
 13        (h)  Using  fraudulent,  coercive or dishonest practices; or demonstrating
 14        incompetence, untrustworthiness or financial irresponsibility in the  con-
 15        duct of business in this state or elsewhere;
 16        (i)  Having  an insurance license, or its equivalent, denied, suspended or
 17        revoked in any other state, province, district or territory;
 18        (j)  Forging another's name to an application for insurance or to any doc-
 19        ument related to an insurance transaction;
 20        (k)  Cheating, including improperly using notes  or  any  other  reference
 21        material, to complete an examination for an insurance license;
 22        (l)  Knowingly  accepting insurance business from an individual who is not
 23        licensed but who is required to be licensed by the department;
 24        (m)  Failing to comply with an administrative or court  order  imposing  a
 25        child support obligation, provided however, that nothing in this provision
 26        shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code; or
 27        (n)  Failing  to pay state income tax or comply with any administrative or
 28        court order directing payment of state income tax.
 29        (2)  The license of a business entity may be suspended, revoked or refused
 30    if the department finds, after hearing, that an individual  licensee's  viola-
 31    tion  was  known or should have been known by one (1) or more of the partners,
 32    officers or managers acting on behalf of the business entity and the violation
 33    was neither reported to the department nor corrective action taken.
 34        (3)  In addition to or in lieu of any  applicable  denial,  suspension  or
 35    revocation  of  a  license, a person may, after hearing, be subject to a civil
 36    fine or administrative penalty according to section 41-1016, Idaho Code.
 37        (4)  The department shall retain the authority to enforce  the  provisions
 38    of  and  impose any penalty or remedy authorized by this chapter and title 41,
 39    Idaho Code, against any person who is under investigation for or charged  with
 40    a  violation  of  this  chapter  or title 41, Idaho Code, even if the person's
 41    license or registration has been surrendered or has  lapsed  by  operation  of
 42    law.

 43        41-5812.  BOND  OR  LETTER  OF CREDIT. Prior to issuance of a license as a
 44    public adjuster and for the duration  of  the  license,  the  applicant  shall
 45    secure  evidence  of  financial  responsibility  in a format prescribed by the
 46    department through a security bond or irrevocable letter of credit.
 47        (1)  A surety bond executed and issued by an insurer authorized  to  issue
 48    surety bonds in this state, which bond:
 49        (a)  Shall be in the minimum amount of twenty thousand dollars ($20,000);
 50        (b)  Shall  be  in  favor  of  this state and shall specifically authorize
 51        recovery by the department on behalf of any person in this state who  sus-
 52        tained  damages as the result of erroneous acts, a failure to act, convic-
 53        tion of fraud, or conviction of unfair practices in his or her capacity as
 54        a public adjuster; and

                                       7

  1        (c)  Shall not be terminated unless at least thirty (30) days' prior writ-
  2        ten notice will have been filed with  the  department  and  given  to  the
  3        licensee.
  4        (2)  An  irrevocable  letter  of  credit  issued  by a qualified financial
  5    institution, which letter of credit:
  6        (a)  Shall be in the minimum amount of twenty thousand dollars ($20,000);
  7        (b)  Shall be to an account within the department and  subject  to  lawful
  8        levy  of execution on behalf of any person to whom the public adjuster has
  9        been found to be legally liable as the result of erroneous acts, a failure
 10        to act, fraudulent acts, or unfair practices in his or her capacity  as  a
 11        public adjuster; and
 12        (c)  Shall not be terminated unless at least thirty (30) days' prior writ-
 13        ten  notice  will  have  been  filed  with the department and given to the
 14        licensee.
 15        (3)  The issuer of the evidence of financial responsibility  shall  notify
 16    the department upon termination of the bond or letter of credit, unless other-
 17    wise directed by the department.
 18        (4)  The  department  may ask for the evidence of financial responsibility
 19    at any time deemed relevant.
 20        (5)  The authority to act as a public adjuster shall automatically  termi-
 21    nate  if  the  evidence  of  financial  responsibility  terminates  or becomes
 22    impaired.

 23        41-5813.  CONTINUING EDUCATION. (1) An  individual,  who  holds  a  public
 24    adjuster  license and who is not exempt under subsection (2)  of this section,
 25    shall satisfactorily complete a minimum of twenty-four (24) hours of  continu-
 26    ing education courses, including three (3) hours of law or ethics, reported on
 27    a biennial basis in conjunction with the license renewal cycle.
 28        (2)  This section shall not apply to:
 29        (a)  Licensees  not licensed for one (1) full year prior to the end of the
 30        applicable continuing education biennium; or
 31        (b)  Licensees holding nonresident public adjuster licenses who  have  met
 32        the  continuing  education requirements of their home state and whose home
 33        state gives credit to residents of this state on the same basis.
 34        (3)  Only continuing education courses approved by the department shall be
 35    used to satisfy the continuing education requirement of subsection (1) of this
 36    section.
 37        (4)  Failure of the licensee  to  comply  with  the  applicable  education
 38    requirement  by  the  expiration  date of the license shall be grounds for the
 39    director to refuse to continue any such license. The  licensee  may  reinstate
 40    his  or  her  license by submitting proof of all education requirements within
 41    ninety (90) days from the date of expiration of the license and by  submitting
 42    an  additional  administrative  penalty  of  one  hundred dollars ($100) for a
 43    delinquency of one (1) day to thirty (30) days, two hundred dollars ($200) for
 44    a delinquency of thirty-one (31) days to sixty (60) days,  and  three  hundred
 45    dollars  ($300)  for a delinquency of sixty-one (61) days to ninety (90) days.
 46    Following the ninetieth day from the date of nonrenewal of the license and  up
 47    to  one  (1)  year  from  the  nonrenewal date, the licensee must complete all
 48    requirements for licensure including retesting, submission of a  new  applica-
 49    tion  and payment of all new licensing fees.  In addition, the individual must
 50    submit proof of completion of the required  education  requirements  from  the
 51    licensing  period  in which the license was terminated.  After the license has
 52    been expired for one (1) year or more, the individual must reapply and  retest
 53    as a new applicant.

                                       8

  1        41-5814.  PUBLIC ADJUSTER FEES. (1) A public adjuster shall not pay a com-
  2    mission,  service fee or other valuable consideration to a person for investi-
  3    gating or settling claims in this state if  that  person  is  required  to  be
  4    licensed under this chapter and is not so licensed.
  5        (2)  A person shall not accept a commission, service fee or other valuable
  6    consideration  for investigating or settling claims in this state if that per-
  7    son is required to be licensed under this chapter and is not so licensed.
  8        (3)  A public adjuster may pay or assign commission, service fees or other
  9    valuable consideration to persons who do not investigate or settle  claims  in
 10    this state, unless the payment would violate section 41-1314, Idaho Code.

 11        41-5815.  CONTRACT BETWEEN PUBLIC ADJUSTER AND INSURED. (1) Public adjust-
 12    ers shall ensure that all contracts for their services are in writing and con-
 13    tain the following terms:
 14        (a)  Legible  full name of the adjuster signing the contract, as specified
 15        in department records;
 16        (b)  Permanent home state business address and phone number;
 17        (c)  Department license number;
 18        (d)  Title of "public adjuster contract";
 19        (e)  Insured's full name, street address, insurance company name and  pol-
 20        icy number, if known, or upon notification;
 21        (f)  Description of the loss and its location, if applicable;
 22        (g)  Description of services to be provided to the insured;
 23        (h)  Signatures of the public adjuster and the insured;
 24        (i)  Date contract was signed by the public adjuster and date the contract
 25        was signed by the insured;
 26        (j)  Attestation language stating that the public adjuster is fully bonded
 27        pursuant to state law; and
 28        (k)  Full  salary,  fee,  commission, compensation or other considerations
 29        the public adjuster is to receive for services.
 30        (2)  The contract may specify that the public adjuster shall be named as a
 31    co-payee on an insurer's payment of a claim.
 32        (a)  If the compensation is based on a share of the insurance  settlement,
 33        the exact percentage shall be specified.
 34        (b)  Initial  expenses  to  be  reimbursed to the public adjuster from the
 35        proceeds of the claim payment shall be  specified  by  type,  with  dollar
 36        estimates set forth in the contract and with any additional expenses first
 37        approved by the insured.
 38        (3)  If  the insurer, not later than seventy-two (72) hours after the date
 39    on which the loss is reported to the insurer, either pays or commits in  writ-
 40    ing to pay to the insured the policy limit of the insurance policy, the public
 41    adjuster shall:
 42        (a)  Not  receive  a  commission  consisting  of a percentage of the total
 43        amount paid by an insurer to resolve a claim;
 44        (b)  Inform the insured  that  the  loss  recovery  amount  might  not  be
 45        increased by insurer; and
 46        (c)  Be entitled only to reasonable compensation from the insured for ser-
 47        vices  provided  by the public adjuster on behalf of the insured, based on
 48        the time spent on a claim and expenses incurred by  the  public  adjuster,
 49        until  the  claim  is paid or the insured receives a written commitment to
 50        pay from the insurer.
 51        (4)  A public adjuster shall provide the insured a written disclosure con-
 52    cerning any direct or indirect financial interest that the public adjuster has
 53    with any other party that is involved in any aspect of the claim,  other  than
 54    the  salary, fee, commission or other consideration established in the written

                                       9

  1    contract with the insured including, but not limited  to,  any  ownership  of,
  2    other  than  as  a  minority  stockholder,  or any compensation expected to be
  3    received from, any construction firm, salvage firm, building  appraisal  firm,
  4    motor vehicle repair shop, or any other firm that provides estimates for work,
  5    or  that  performs any work, in conjunction with damages caused by the insured
  6    loss on which the public adjuster is engaged. The word  "firm"  shall  include
  7    any person.
  8        (5)  A public adjuster contract may not contain any contract term that:
  9        (a)  Allows  the  public  adjuster's  percentage  fee to be collected when
 10        money is due from an insurance company, but not paid,  or  that  allows  a
 11        public  adjuster  to collect the entire fee from the first check issued by
 12        an insurance company, rather than as a percentage of each check issued  by
 13        an insurance company;
 14        (b)  Requires  the  insured  to  authorize an insurance company to issue a
 15        check only in the name of the public adjuster;
 16        (c)  Imposes collection costs or late fees; or
 17        (d)  Precludes a public adjuster from pursuing civil remedies.
 18        (6)  Prior to the signing of the contract the public adjuster  shall  pro-
 19    vide the insured with a separate disclosure document regarding the claim proc-
 20    ess that states:
 21        (a)  Property  insurance  policies obligate the insured to present a claim
 22        to his or her insurance company for consideration.  There  are  three  (3)
 23        types of adjusters that could be involved in that process. The definitions
 24        of the three types are as follows:
 25             (i)   "Company  adjuster" means the insurance adjusters are employees
 26             of an insurance company. They represent the interest of the insurance
 27             company and are paid by the insurance company. They will  not  charge
 28             you a fee.
 29             (ii)  "Independent  adjuster" means the insurance adjusters are hired
 30             on a contract basis by an insurance company to represent  the  insur-
 31             ance company's interest in the settlement of the claim. They are paid
 32             by your insurance company. They will not charge you a fee.
 33             (iii) "Public adjuster" means the insurance adjusters do not work for
 34             any  insurance  company.  They  work for the insured to assist in the
 35             preparation, presentation and settlement of the  claim.  The  insured
 36             hires  them  by signing a contract agreeing to pay them a fee or com-
 37             mission based on a percentage of the settlement or  other  method  of
 38             compensation.
 39        (b)  The  insured  is  not  required to hire a public adjuster to help the
 40        insured meet his or her obligations under the policy, but has the right to
 41        do so.
 42        (c)  The insured has the right to initiate direct communications with  the
 43        insured's attorney, the insurer, the insurer's adjuster, and the insurer's
 44        attorney,  or  any  other person regarding the settlement of the insured's
 45        claim.
 46        (d)  The public adjuster is  not  a  representative  or  employee  of  the
 47        insurer.
 48        (e)  The  salary, fee, commission or other consideration is the obligation
 49        of the insured, not the insurer.
 50        (7)  The contract shall be executed in duplicate to  provide  an  original
 51    contract  to the public adjuster, and an original contract to the insured. The
 52    public adjuster's original contract  shall  be  available  at  all  times  for
 53    inspection without notice by the department.
 54        (8)  The  public adjuster shall provide the insurer a notification letter,
 55    which has been signed by the insured, authorizing the public adjuster to  rep-

                                       10

  1    resent the insured's interest.
  2        (9)  The  public  adjuster  shall  give  the insured written notice of the
  3    insured's rights as provided in this section.
  4        (10) The insured has the right to rescind the contract  within  three  (3)
  5    business  days after the date the contract was signed. The rescission shall be
  6    in writing and mailed or delivered to the public adjuster at  the  address  in
  7    the contract within the three (3) business day period.
  8        (11) If  the insured exercises the right to rescind the contract, anything
  9    of value given by the insured under the  contract  will  be  returned  to  the
 10    insured  within  twenty-eight  (28)  days  following the receipt by the public
 11    adjuster of the cancellation notice.

 12        41-5816.  ESCROW OR  TRUST  ACCOUNTS.  A  public  adjuster  who  receives,
 13    accepts  or holds any funds on behalf of an insured, towards the settlement of
 14    a claim for loss or damage, shall deposit the funds in a  noninterest  bearing
 15    escrow  or  trust  account  in  a  financial institution that is insured by an
 16    agency of the federal government in the public adjuster's home state or  where
 17    the loss occurred.

 18        41-5817.  RECORD  RETENTION.  (1)  A public adjuster shall maintain a com-
 19    plete record of each transaction as a public adjuster. The records required by
 20    this section shall include the following:
 21        (a)  Name of the insured;
 22        (b)  Date, location and amount of the loss;
 23        (c)  Copy of the contract between the public adjuster and insured;
 24        (d)  Name of the insurer, amount, expiration date and number of each  pol-
 25        icy carried with respect to the loss;
 26        (e)  Itemized statement of the insured's recoveries;
 27        (f)  Itemized  statement  of  all  compensation  received  by  the  public
 28        adjuster, from any source whatsoever, in connection with the loss;
 29        (g)  A  register of all moneys received, deposited, disbursed or withdrawn
 30        in connection with a transaction with an insured, including  fees,  trans-
 31        fers  and disbursements from a trust account and all transactions concern-
 32        ing all interest bearing accounts;
 33        (h)  Name of public adjuster who executed the contract;
 34        (i)  Name of the attorney representing the insured, if applicable, and the
 35        name of the claims representatives of the insurance company; and
 36        (j)  Evidence of financial responsibility in a format  prescribed  by  the
 37        department.
 38        (2)  Records  shall  be  maintained  for at least five (5) years after the
 39    termination of the transaction with an insured and shall be open  to  examina-
 40    tion by the department at all times.
 41        (3)  Records  submitted  to the department in accordance with this section
 42    that contain information identified in writing as proprietary  by  the  public
 43    adjuster  shall  be treated as confidential by the department pursuant to sec-
 44    tion 9-340D, Idaho Code.

 45        41-5818.  STANDARDS OF CONDUCT OF PUBLIC ADJUSTER. (1) A  public  adjuster
 46    is obligated, under his or her license, to serve with objectivity and complete
 47    loyalty  the interest of his or her client alone; and to render to the insured
 48    such information, counsel and service, as within the knowledge,  understanding
 49    and  opinion  in  good faith of the licensee, as will best serve the insured's
 50    insurance claim needs and interests.
 51        (2)  A public adjuster shall  not  solicit,  or  attempt  to  solicit,  an
 52    insured  during the progress of a loss-producing occurrence, as defined in the

                                       11

  1    insured's insurance contract.
  2        (3)  A public adjuster shall not permit an unlicensed employee  or  repre-
  3    sentative  of  the  public adjuster to conduct business for which a license is
  4    required under this chapter.
  5        (4)  A public adjuster shall not  have  a  direct  or  indirect  financial
  6    interest in any aspect of the claim, other than the salary, fee, commission or
  7    other  consideration  established  in  the  written contract with the insured,
  8    unless full written disclosure has been made to the insured as  set  forth  in
  9    section 41-5815(6), Idaho Code.
 10        (5)  A  public adjuster shall not acquire any interest in salvage of prop-
 11    erty subject to the contract with  the  insured  unless  the  public  adjuster
 12    obtains written permission from the insured after settlement of the claim with
 13    the insurer as set forth in section 41-5815(4), Idaho Code.
 14        (6)  The public adjuster shall disclose to an insured if he or she has any
 15    interest or will be compensated by any construction firm, salvage firm, build-
 16    ing  appraisal firm, motor vehicle repair shop or any other firm that performs
 17    any work in conjunction with damages caused by  the  insured  loss.  The  word
 18    "firm" shall include any person.
 19        (7)  Any compensation or anything of value in connection with an insured's
 20    specific loss that will be received by a public adjuster shall be disclosed by
 21    the public adjuster to the insured in writing, including the source and amount
 22    of any such compensation.
 23        (8)  Public  adjusters  shall  adhere  to  the  following  general ethical
 24    requirements:
 25        (a)  A public adjuster shall not undertake the adjustment of any claim  if
 26        the public adjuster is not competent and knowledgeable as to the terms and
 27        conditions  of the insurance coverage, or which otherwise exceeds the pub-
 28        lic adjuster's current expertise;
 29        (b)  A public adjuster shall not knowingly make any oral or written  mate-
 30        rial misrepresentations or statements which are false or maliciously crit-
 31        ical  and  intended to injure any person engaged in the business of insur-
 32        ance to any insured client or potential insured client;
 33        (c)  No public adjuster, while so licensed by the department,  may  repre-
 34        sent  or  act  as  a company adjuster or as an independent adjuster on the
 35        same claim;
 36        (d)  The contract shall not be construed to prevent an insured from pursu-
 37        ing any civil remedy after the three (3) business day revocation  or  can-
 38        cellation period;
 39        (e)  A  public  adjuster shall not enter into a contract or accept a power
 40        of attorney that vests in the public adjuster the effective  authority  to
 41        choose the persons who shall perform repair work; and
 42        (f)  A  public  adjuster  shall  ensure  that all contracts for the public
 43        adjuster's services are in writing and set forth all terms and  conditions
 44        of the engagement.
 45        (9)  A  public  adjuster  may not agree to any loss settlement without the
 46    insured's knowledge and consent.

 47        41-5819.  REPORTING OF ACTIONS. (1) The public adjuster  shall  report  to
 48    the  department any administrative action taken against the public adjuster in
 49    another jurisdiction or by another governmental agency in  this  state  within
 50    thirty  (30)  days  of  the final disposition of the matter. This report shall
 51    include a copy of the order, consent to order, or other relevant  legal  docu-
 52    ments.
 53        (2)  Within  thirty  (30)  days  of the initial pretrial hearing date, the
 54    public adjuster shall report to the department any criminal prosecution of the

                                       12

  1    public adjuster taken in any jurisdiction. The report shall include a copy  of
  2    the  initial  complaint  filed,  the order resulting from the hearing, and any
  3    other relevant legal documents.

  4        41-5820.  RULES. The department may, in accordance  with  section  41-211,
  5    Idaho  Code,  promulgate  reasonable rules as are necessary or proper to carry
  6    out the purposes of this chapter.

  7        41-5821.  SEVERABILITY. If any provisions of this chapter, or the applica-
  8    tion of a provision to any persons or circumstances, shall  be  held  invalid,
  9    the  remainder of the chapter, and the application of the provision to persons
 10    or circumstances other than those to which it is held invalid,  shall  not  be
 11    affected.

 12        SECTION  2.  This  act shall be in full force and effect on and after July
 13    1, 2008. Provided however, that the provisions of section 41-5805, Idaho Code,
 14    do not become effective until a  state  participates  in  the  NAIC's  central
 15    repository for the purpose of obtaining criminal background information.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE

                            RS17818

This legislation licenses public adjusters in Idaho.  A public
adjuster is an insurance adjuster who works for an insured (rather
than an insurance company) to help evaluate and document losses to
support an insurance claim.  

The legislation is taken from the National Association of Insurance
Commissioners (NAIC) model act with minor modifications to
accommodate Idaho insurance laws.  Forty-two states currently license
or regulate public adjusters.  Idaho is one of only eight states
without a licensing mechanism.  

Unfortunately, because of ambiguity created by an Idaho Supreme Court
decision in 1994, without passage of legislation like this, it is
unclear whether public adjusters may lawfully conduct business in
Idaho.  This legislation would permit public adjusters to help
insureds document losses under their own polices while providing
regulatory oversight by the Department of Insurance.  



                          FISCAL NOTE

There will be modest increased costs to the Department of Insurance
that will be partially offset by licensing fees.  



CONTACT
Name:     Ken McClure
          Jeremy Chou
Phone:    388-1200


STATEMENT OF PURPOSE/FISCAL NOTE                            S 1397