SB326 Alabama 2011 Session

Summary

Primary Sponsor

Ben H. Brooks

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

SB326 would create a licensed public adjuster system in Alabama to represent insureds in first party claims, with rules for licensing, education, bonding, ethics, contracts, and discipline.

What This Bill Does

The bill creates licensing and regulation for public adjusters who work for insureds on first party property, casualty, and workers compensation claims. It requires public adjusters to be licensed, pass a written exam, complete a prelicensing course, and meet continuing education and fingerprinting requirements, with authority for delayed enforcement dates. It establishes financial responsibility via bonds or letters of credit, contract standards, escrow rules, disclosure duties, and penalties for violations, all enforced by the Insurance Commissioner.

Who It Affects

• Public adjusters (both individuals and business entities) who want to operate in Alabama must obtain licensure, meet education, bonding, fingerprinting, and ongoing conduct requirements.
• Policyholders or insureds who hire public adjusters will gain new protections, including written contracts, clear fee disclosures, cancellation rights, and information about potential conflicts of interest.

Key Provisions

• Creates licensing and regulation of public adjusters who represent insureds in first party property casualty and workers compensation claims.
• Requires a 20 hour prelicensing course and a written exam, with certain exemptions for those already licensed in another state; includes home state and nonresident licensing provisions.
• Requires 24 hours of continuing education every two years, including 3 hours on ethics.
• Establishes a financial responsibility requirement with a $20,000 bond or irrevocable letter of credit and ongoing proof of financial responsibility.
• Allows delayed enforcement for fingerprinting, prelicensing, and continuing education up to 24 months after the act becomes law.
• Imposes licensing and examination fees for public adjusters (example amounts include a $20 application fee, $80 license fee for individuals, $200 for business entities, and up to $100 per examination).
• Contracts for public adjuster services must be in writing and include specified information; insureds have a three business day cancellation window (five days during a state of emergency) and protections regarding return of anything of value and disclosure of compensation.
• Requires disclosures of any financial interests with other firms involved in the claim and limits certain fee arrangements; prohibits redacting fee terms in contracts.
• Requires escrow or trust accounts for funds held for insureds and detailed recordkeeping for each transaction, maintained for at least five years.
• Gives the Insurance Commissioner authority to suspend, revoke, or impose penalties for violations, including fines up to 10,000 per violation; permits enforcement and fines for violations even if a license is surrendered or lapsed.
• Authorizes the commissioner to issue rules, contract with NAIC for licensing functions, and allow delayed enforcement dates for implementing key provisions.
• Effective date is January 1 following passage, with some provisions allowing for delayed enforcement as noted.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance Department