HB428 Alabama 2011 Session

Summary

Primary Sponsor

Steve McMillan

Republican

Session

Regular Session 2011

Title

Insurance Department, adjusters, public adjusters licensed and regulated, adjustment of claims on behalf of insured party, license fees, Sec. 27-4-2 am'd.

Summary

HB428 would create a licensing and regulatory framework for public adjusters in Alabama, who represent insureds in settling claims, with rules on qualifications, fees, and conduct.

What This Bill Does

It establishes qualifications for public adjusters (including exams and continuing education), requires financial responsibility (bond or letter of credit) and escrow handling, and sets contract and disclosure requirements for dealings with insureds. It also creates licensing rules for residents and nonresidents, outlines enforcement powers and penalties for violations, and sets fee structures and record-keeping rules. It further requires background checks and reporting of disciplinary actions to the state insurance commissioner.

Who It Affects

• Public adjusters and public adjuster business entities in Alabama, who must obtain and maintain a license, meet education and ethics requirements, post financial responsibility, keep records, and follow contract and conduct rules.
• Policyholders/insured individuals and their claims, who would receive written contracts and disclosures, have protections in the claims process (including cancellation rights and disclosure of conflicts of interest), and benefit from regulated, more transparent public adjuster practices.

Key Provisions

• Licensing and qualifications: defines public adjusters, requires residency/nonresidency rules, prelicensing course, written exam, and 24 hours of biennial continuing education including ethics.
• Financial responsibility and escrow: requires a minimum $20,000 bond or irrevocable letter of credit and handling of funds through a non-interest-bearing escrow account.
• Contracts and disclosures: contracts must be in writing with specified terms; insureds have a three-business-day (five-day during state of emergency for one year after loss) cancellation window; require disclosure of conflicts of interest and any third-party financial interests.
• Fees and processing: amends Section 27-4-2 to include license, renewal, and exam fees for public adjusters; allows electronic filing and use of NAIC forms; outlines various related fees for individuals and business entities.
• Nonresident licensing and reciprocity: allows nonresident licenses with home-state reciprocity, requires verification of license status, and ties continuation to maintaining a resident license in the home state.
• Enforcement and records: commissioner can suspend, revoke, or place license on probation, impose fines up to $10,000 per violation, require fingerprints/background checks, and maintain five years of records open to inspection (with confidentiality for proprietary information).

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance Department