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Arkansas Committee Considering Public Insurance Adjuster Bill By Mark Friedman


Committee Considering Public Insurance Adjuster Bill 3/21/2011 A bill that would allow property owners to hire their own insurance adjuster on Tuesday will again be discussed in the Arkansas Senate Committee on Insurance & Commerce. The committee held a hearing on Senate Bill 387, sponsored by Sens. Joyce Elliott, D-Little Rock, and Steve Harrelson, D-Texarkana, on Thursday, but no action was taken. The bill would create a new licensed profession for public adjusters, who would work for the policyholder, said Steve Joiner, an attorney and lobbyist for the National Association of Public Insurance Adjusters, which supports the bill. They would be regulated by the Arkansas Insurance Department. The public adjuster "passes the same tests and has to have the same training and adhere to the same rules as the company adjuster," Joiner said. "Except these people are hired and work for the insured - the homeowner or business owner - rather than the insurance company." Arkansas is one of the few states that don't allow public adjusters, and the insurance industry in Arkansas wants to keep it that way. "We don't think there is a need in Arkansas to have public adjusters," said Will Rijksen, vice president of public affairs for the American Insurance Association in Washington, D.C. He said that if the bill did pass, public adjusters would need to be regulated. Jay Bradford, the commissioner of the Arkansas Insurance Department, said in a statement to Arkansas Business that he didn't see a need for them either. He said the insurance agent was supposed to make sure the clients were helped with the claim. "Also the Arkansas Insurance Department's Consumer Services Division has been very effective in helping the consumer," Bradford said in the statement. And if property owners still aren't happy with the proposed settlement, they can hire a lawyer and take their case to court. Joiner said having a public adjuster, though, could reduce the number of lawsuits. "The public adjusters can work with the insurance company and their adjuster and give the consumer some confidence that they're being treated fairly," which might avoid a lawsuit, he said. He expects there will be about 50 public adjusters in Arkansas if the bill passes. Those opposed to the bill said public adjusters would drive up insurance costs. "The public adjuster, obviously, has to be paid by somebody," said Wayne White, the executive vice president for Farmers Union Mutual in Bryant and a board member of the National Association of Mutual Insurance Companies. He said the public adjuster was going to be paid by the consumer, which would reduce the amount of the claim. A public adjuster typically charges about 10 percent of the claim. In some cases, White said, public adjusters have inflated the amount of damage in the claim to cover their costs, which is fraud. Those supporting the bill, however, say there is no proof that having public adjusters will result in higher premiums. "A public adjuster can't get anything the man's not entitled to under the terms and conditions of the insurance policy," said Wes Baldwin of Charlotte, N.C. Baldwin is a former president of the National Association of Public Insurance Adjusters. "So if he's getting what he's entitled to, how does that affect rates? [The insurance companies] want him to get what he's entitled to, don't they?" Joiner, the lobbyist, said no single event sparked the idea for the bill. Members of the National Association of Public Insurance Adjusters "practice all over the country with Arkansas being a notable exception," Joiner said. "They would like to be able to help Arkansas consumers."