SB451 Alabama 2012 Session

Summary

Primary Sponsor

Trip Pittman

Republican

Session

Regular Session 2012

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

SB451 creates a licensing and regulatory framework for Alabama public adjusters to protect insureds by requiring licenses, exams, continuing education, and clear conduct standards.

What This Bill Does

It defines who is a public adjuster and requires licensing for both resident and nonresident individuals or business entities. It requires prelicensing courses, a written exam, and 24 hours of continuing education every two years. It establishes financial responsibility through a bond or irrevocable letter of credit, escrow requirements for client funds, and written contracts with insureds that disclose fees and conflicts of interest. It gives the Insurance Commissioner authority to enforce the act, set rules, and impose penalties for violations.

Who It Affects

• Public adjusters (individuals and business entities) must obtain and renew licenses, meet education and bonding requirements, maintain financial responsibility, and follow conduct rules.
• Policyholders/insureds will interact with regulated contracts, disclosures, and escrow requirements intended to protect their interests and ensure ethical practices by public adjusters.

Key Provisions

• Defines public adjuster and limits licensure to assisting insureds with first party claims.
• Requires licensing for resident and nonresident public adjusters, including prelicensing courses and a written exam.
• Requires continuing education of 24 hours every two years, including 3 hours of ethics.
• Requires financial responsibility through a bond or irrevocable letter of credit with minimum amounts of 20,000 dollars.
• Public adjuster contracts must be in writing with detailed terms and disclosures of conflicts of interest.
• Funds held for insureds must be in non-interest bearing escrow or trust accounts and kept in the home state or where the loss occurred.
• Maintains five-year recordkeeping for transactions and allows the Commissioner to inspect records.
• Sets standards of conduct restricting misrepresentation, conflicts of interest, and engagement in the practice of law by public adjusters.
• Requires fingerprints and criminal background checks for license eligibility, with potential delays for implementation up to 24 months.
• Gives the Commissioner authority to suspend, revoke, probation, or fine up to 10,000 per violation for violations.
• Updates license and fee structure for adjusters in the Alabama Code, including application, license, and examination fees.
• Requires reporting of administrative actions in other jurisdictions within 30 days and reporting of criminal actions within 30 days.
• Provides for civil actions to enforce the act and require damages or penalties as appropriate.
• Effective date is the first day of January following passage and approval.

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