Existing law, the Public Insurance Adjusters Act, governs the regulation, licensing, and registration of public insurance adjusters and requires the Insurance Commissioner to administer the act. The act prohibits a licensee from acting as a public insurance adjuster without having first entered into a written contract and governs the form and content of the contract, including setting forth required and prohibited contract terms, including requiring a description of the services to be provided to the insured. Existing law prohibits a public adjuster from receiving a fee or other consideration in excess of the amount or percentage provided in the contract. A person who violates these provisions is guilty of a misdemeanor.

This bill would require the contract between the public adjuster and the insured to include a description of the services to be provided, including the specific claim and coverages to which the services apply. The bill would prohibit a public adjuster contract from allowing a licensee’s fee, commission, or other valuable consideration to be for, or based upon, (1) any amount paid to the insured prior to the date of the written contract with the public adjuster if the claim pertains to a catastrophic disaster or a state of emergency, or, (2) on an insurer’s payment for specific claims or coverages to which the services do not apply.

Existing law prohibits licensees from soliciting or attempting to solicit employment from a client during a loss-producing occurrence, or from soliciting a policyholder or initiating contact with a policyholder during specified hours.

This bill would instead prohibit licensees from soliciting or attempting to solicit employment from a policyholder or their representative during a loss-producing occurrence and would prohibit a licensee from also soliciting or contacting a policyholder’s representative during those specified hours.

Existing law entitles an insured to rescind a contract without any time limit if the licensee misrepresents or conceals a material fact from the insured before the execution of the contract. Existing law authorizes an insured to cancel a contract with a public adjuster within 5 calendar days of signing it and being provided a copy of the signed contract if the loss is included in an area subject to catastrophic disaster.

This bill would expand those provisions to entitle an insured to void or rescind the contract if the licensee misrepresents or conceals a material fact before the execution of the contract or solicits employment in violation of the provisions described above. The bill would also extend the ability to cancel a contract within 5 calendar days if a property loss is included in an area subject to a state of emergency. The bill would make conforming changes to a “Notice of Cancellation” form required to be included with each contract and other related disclosures.

This bill would declare that it is to take effect immediately as an urgency statute.