HB181 Alabama 2016 Session

Summary

Primary Sponsor

Jimmy Martin

Republican

Session

Regular Session 2016

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

HB181 would create a state-licensed, regulated system for public adjusters who help insureds with first-party insurance claims, and would update license fees and related requirements.

What This Bill Does

The bill establishes licensing and regulatory rules for public adjusters, including definitions, qualifications, and conduct standards. It requires a prelicensing course, a state exam, and ongoing continuing education, along with fingerprint background checks and a minimum financial responsibility bond or letter of credit. It also sets written contract requirements, fee restrictions, and disclosure duties, and creates enforcement mechanisms with possible penalties for violations. It allows for nonresident licensing and authorizes the commission to adopt additional rules and potentially phased enforcement dates.

Who It Affects

• Individuals who want to work as public adjusters in Alabama must meet licensure requirements (age, home state designation, prelicensing course, exam) and maintain ongoing education and financial responsibility.
• Public adjuster business entities must designate a licensed individual, possibly register and comply with related corporate requirements, and pay license-related fees.
• Nonresident public adjusters may obtain Alabama licenses if their home state licenses them and ongoing reciprocity conditions are met; they must maintain their home-state license.
• Policyholders/insureds gain contractual protections and disclosures when hiring a public adjuster, including written contracts, cancellation rights, and clear fee disclosures.
• The Alabama Department of Insurance and related regulatory bodies gain new authority to regulate, monitor, and enforce public adjuster compliance, including fines and license actions.

Key Provisions

• Public adjuster defined and limited to assisting insureds with first-party claims; exemptions for attorneys, certain health/life claims, and insurer employees.
• Licensing required to act as a public adjuster; entities must designate licensed individuals to exercise the entity's license.
• Qualifications include prelicensing course (20 hours), passing a written examination, and biennial continuing education (24 hours, with 3 ethics hours); fingerprints required for background checks.
• Financial responsibility achieved via a bond or irrevocable letter of credit of at least $50,000; termination rules and notification requirements for bonds/letters of credit.
• Public adjuster contracts must be in writing with specified details; insureds have a three-business-day cancellation window (five days during certain emergencies) and fee/disclosure provisions, plus prohibitions on certain practices.
• Standards of conduct require objectivity, prohibition on misrepresentation, prohibition on practicing law beyond licensure, and disclosure of ownership interests in related firms.
• Recordkeeping must cover detailed transaction records for at least five years and be open to the commissioner; funds may not be held by the public adjuster on behalf of the insured.
• Nonresident licensing and ongoing home-state license requirements; verification provisions and conditions for license continuation.
• Enforcement includes probation, suspension, revocation, or civil fines up to $10,000 per violation; rules may be promulgated by the commissioner and delayed enforcement dates may be established.
• License fees and related charges for public adjusters (and the licensing process) are added to the existing fee schedule, including specific amounts for individuals and business entities, exam fees, and application/renewal fees.

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