Verify Adjuster Licensing Status

Even if an adjuster provides documentation showing that they have a valid license in a particular state, it’s important that the firm verify the adjuster’s status with the state. At the time the adjuster is initially hired or contracted for work, the adjuster should submit all valid license documentation for all the states that the adjuster holds a license. 

The firm’s compliance staff should then perform a state-by-state check to verify the adjuster is in good standing in that state.  This is a pretty simple process because every state has their licensing information available on a website.  Simply access the records portion of the site and enter the required information.  Most often a legal name and address will suffice. Some states, like New York, require more information like social security numbers or license numbers.

Once an adjuster is working claims for the firm, licenses should continue to be monitored and verified by the firm on the state website.  Self-compliance, trusting and expecting that the adjuster is properly maintaining their licenses, is the least favorable option and exposes the adjusting firm to the most risk.  First, they are professionals at adjusting claims, not trying to keep licenses current.  Good adjusters, while organized, are also very busy and often on the road. 

Furthermore, state rules are forever changing and it’s difficult enough for a full-time compliance person to stay on top of all the changes with requirements, much less a busy claims adjuster.  Even a small change such as a renewal date switching from a calendar date to the date the adjuster received a license can easily be missed.

Ultimately, the risk and liability for adjuster licensing falls on the firm.  A carrier who experiences the ramifications of an unlicensed adjuster will not accept “it’s the adjuster’s fault” that their license wasn’t valid.  Take the extra step and ensure compliance.  It’s to everyone’s benefit.

About Xeneros: Xeneros helps organizations maintain business entity and independent adjuster licenses and the associated requirements.  Xeneros uses an innovative web-based software program which is supported and maintained by a knowledgeable compliance staff. For more information go to www.xeneros.net.

Improper Licensing Is The Fastest Growing Risk Issue

In 2007, licensing issues were not identified as a Top 10 risk exposure concern.  In 2010, it was number 4.  No other risk item has risen so fast. 

Recently I read a very good article in The Claim Spot addressing concerns that the market has regarding claims departments.  Within the article are links to Wolters Kluwer’s annual Top 10 Most Frequent Market Conduct Issues.    In 2010, licensing issues were the number 4 concern.  In 2007, licensing wasn’t even listed in the top ten.  Licensing was ranked tenth and sixth in 2008 and 2009 respectively. 

What does this mean? State agencies are becoming more vigilant about license regulation.  For example during emergencies, licensing department officials are increasingly in the field checking adjuster’s licenses.  Failure to be properly licensed can have serious consequences for the adjuster as well as the firm and carrier that they work for. 

If a claim is litigated, one of the first items to be reviewed is the adjuster’s license.  An invalid license immediately means trouble for the defendants.    

What doesn’t this mean? I don’t think this means that the industry as a whole has become increasingly lax about licensing because I think the opposite is true.  It think firms and carriers are paying more attention to licensing and are most likely more compliant today than they were in 2007.

More importantly, what does this mean to you?  If your firm has been soft on licensing, you should reconsider the priority that you give to licensing.  Marc Lanzkowsky offers some great advice in the article referenced above:  

1. Audit for compliance:  Review where adjusters are being assigned claims.  Check each state’s website to make sure the state considers every license to be in good standing. Also, audit the business entity licenses to make sure the entity is properly licensed in the states that services are performed.  Remember, 19 states require the entity to be licensed.
2. Fix and track problems: If you find serious issues with compliance, chances are you need to review your license management procedures.  First and foremost, self-regulation (adjusters being responsible for their own licensing) is not a good practice.  Look seriously at the level of importance given to licensing.  It needs to be a priority.  Assign a compliance person.  Someone within the organization needs to oversee licensing.  Don’t simply rely on information provided by the adjusters.  Go to each state’s website and verify an adjuster’s standing. 

In this regulatory and litigious environment, scrutiny of licensing will only continue to increase.  Do what you can to not be put under the microscope. 

About Xeneros: Xeneros helps organizations maintain business entity and independent adjuster licenses and the associated requirements.  Xeneros uses an innovative web-based software program which is supported and maintained by a knowledgeable compliance staff. For more information go to www.xeneros.net.

Where Can I find Information On Licensing Requirements?

Today, every state that requires a license for claims adjusters has all of the information that you need on their government website.  For almost every state, you can start at the department of insurance website for the state.   Xeneros has updated the 'list of states that require a license” document to now include links to each state’s website.  It can be accessed here. 

Now, sorting through the site to find the relevant information is another matter. As easy as this sounds, navigating each state’s website is not that simple.  If you’ve been a claims adjuster for any period of time, you know that the licensing requirements vary by state.  Navigating a state’s website to find the little bit of information you need can as complicated as understanding the licensing requirements themselves. 

Another resource for licensing information it LinkedIn.  If you aren’t ‘on’ LinkedIn I suggest you get an account and join a couple of groups.  Xeneros hosts one group called Insurance Licensing and Credentials.  You can pose questions and follow discussions.  A word of caution, however, most input is provided by other adjusters.

Finally, there are companies like Xeneros which will provided the administrative services to acquire and renew licenses and serve as in adjuster licensing clearinghouse.  All the licensing information is available on a single website or by calling a toll-free number and speaking to a compliance specialist. 

About Xeneros: Xeneros helps organizations maintain business entity and independent adjuster licenses and the associated requirements.  Xeneros uses an innovative web-based software program which is supported and maintained by a knowledgeable compliance staff. For more information go to www.xeneros.net.