N.Y. Comp. Codes R. & Regs. tit. 11 § 25.6

Current through Register Vol. 46, No. 45, November 2, 2024

Section 25.6 - Compensation agreement

(a) A public adjuster may be compensated by an insured for or on account of services rendered to the insured by the public adjuster solely as provided for by a written compensation agreement obtained by the public adjuster consistent with Form 1 in section 25.13(a) of this Part.

(b) Every such compensation agreement shall contain the names and addresses of the public adjuster and the insured. If the public adjuster is a business entity, then a sublicensee of the public adjuster shall also be named.

(c) Every such compensation agreement shall be signed by the public adjuster or, if a business entity, then by a sublicensee, or by the duly authorized licensed employee who entered into the agreement; and by the insured, or other party to be charged.

(d) Every such compensation agreement shall be in the same language as that principally used in the oral negotiations and presentation.

(e)

(1) Pursuant to Insurance Law section 2108(s)(2)(A), a public adjuster shall not receive any compensation, either directly or indirectly, for a referral of the insured to an individual or entity for services, work, or repairs relating to any insurance claim for which the public adjuster represents the insured or has negotiated or effected a settlement, unless the compensation is prominently and clearly disclosed to the insured in the written compensation agreement.

(2) Pursuant to Insurance Law section 2108(s)(2)(B), a public adjuster who has a financial or ownership interest, directly or indirectly, in an individual or entity that performs services, work, or repairs, or is the spouse of the individual having such an interest, shall not refer the insured to the individual or entity unless the financial or ownership interest is prominently and clearly disclosed to the insured in the written compensation agreement. If a public adjuster refers an insured to such an individual or entity, then the written compensation agreement required by this section shall be a separate document from any agreement or contract entered into to perform services, work, or repairs. Every such agreement or contract shall itemize all fees in writing and shall not be used as a means to circumvent or in any way increase the amount that the public adjuster may charge pursuant to section 25.7 of this Part.

(3) Pursuant to Insurance Law section 2108(s)(2)(B), if a public adjuster refers an insured to an individual who is related to the public adjuster by blood or affinity within the second degree of consanguinity, or to an entity owned or controlled by such an individual, for services, work, or repairs relating to any insurance claim for which the public adjuster represents the insured or has negotiated or effected a settlement, then the public adjuster shall disclose the relationship to the insured in the written compensation agreement.

(4) If a public adjuster refers an insured to an individual or entity described in this subdivision subsequent to the written compensation agreement being signed by the party to be charged, then the public adjuster shall not receive any compensation for the referral unless the public adjuster obtains an acknowledged disclosure statement consistent with Form 2 in section 25.13(b) of this Part. The disclosure statement shall be limited to the disclosure of the referral fees, and the party to be charged who signed the original compensation agreement shall acknowledge by signature the disclosure statement. The public adjuster shall provide a copy of the signed disclosure statement to the insurer.

(5) A public adjuster shall not require an insured to use any individual or entity for services, work, or repairs relating to any insurance claim for which the public adjuster represents or represented the insured or has negotiated or effected a settlement.

(f) If services rendered by an outside expert or consultant retained or employed by the public adjuster directly relate to the adjusting function of a public adjuster, then the public adjuster shall include the fees for those services in the compensation agreement and shall be subject to the maximum compensation set forth in Section 25.7 of this Part.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 25.6

Amended New York State Register August 11, 2021/Volume XLIII, Issue 32, eff. 10/8/2021