HB 232 — AN ACT relating to insurance adjusters.

UNOFFICIALCHAPTER COPY11 231 RSCHAPTER 11 ( HB 232/EN232 ) AN ACT relating to insurance adjusters.

2.[(b)]2.[(b)]Is Is eligible to designate Kentucky as the individual's[his or her] home state;

4.[(d)]4.[(d)]Has Has not committed any act that is a ground for probation,[ or] suspension, revocation, or refusal of a license as set forth in KRS 304.9-304.9-440; 440;

Page 1 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN 6.[(f)] Has paid the fees established by the commissioner pursuant to KRS 304.4-010;

and 7.[(g)]7.[(g)]Is Is financially responsible to exercise the license.

and d.[c.]Notd.[c.] Not be terminated unless written notice is given to the licensee at least thirty (30) days prior to the termination;

Be subject to lawful levy of execution on behalf of any person to whom the public adjuster has been found to be legally liable as the result of erroneous acts, failure to act, Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY conviction of fraud, or conviction for unfair practices in his or her capacity as a public adjuster;

and Page 2 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN c.

2.[(b)]2.[(b)]Has Has designated a licensed independent or public adjuster responsible for the business entity's compliance with the insurance laws and regulations of Kentucky;

and 4.[(d)]4.[(d)]Has Has paid the fees established by the commissioner pursuant to Page 3 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN KRS 304.4-010.

PageCHAPTER 411 of3 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN (b) An attorney licensed to practice law in Kentucky, when acting in his or her professional capacity as an attorney;

(m) A licensed agent, attorney-in-fact of a reciprocal insurer, or managing general Page 5 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN agent of the insurer, to whom claim authority has been granted by an[the] insurer;

a.[1.]Isa.[1.] Is an employee of a licensed independent adjuster, is[ or] an employee of an affiliate that is a licensed independent adjuster, or is supervised by a licensed independent adjuster, if there are no more than twenty-five (25) persons under the supervision of one (1) licensed individual independent adjuster or licensed agent who is exempt from licensure pursuant to paragraph (m) of this subsection;

b.[2.]Collectsb.[2.] Collects claim information from insureds or claimants;

c.[3.]Entersc.[3.] Enters data into an automated claims adjudication system;

and d.[4.]Furnishesd.[4.] Furnishes claim information to insureds or claimants from the results of the automated claims adjudication system.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (c) A person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to a licensed public adjuster, including Page 6 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN photographers, estimators, private investigators, engineers, and handwriting experts;

(a) An insurer shall notify the commissioner by submitting an application for temporary emergency registration of each individual not already licensed in Page 7 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN the state where the catastrophe has been declared, who will act as an emergency independent adjuster on behalf of the insurer;

(b) Unless refused licensure in accordance with KRS 304.9-440, a nonresident person shall receive a nonresident independent, staff, or public adjuster Page 8 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN license if:

CHAPTER 11 5 3.

Page 9 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN Section 2.

and Page 10 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN 2.

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (d) A title of "Public Adjuster Contract";

Page2.[(b)]The 11 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN 2.[(b)] The initial expenses to be reimbursed to the [public ]adjuster from the proceeds of the claim payment, [shall be ]specified by type, with dollar estimates;[ set forth in the contract] and[ with] 3.

and (c) Be entitled only to reasonable compensation from the insured for services provided Page 12 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN by the public adjuster on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.

For purposes of this subsection, "firm" includes any corporation, partnership, association, joint-stock company, or person.] CHAPTER 11 7 (4)[(5)] A [public adjuster ]contract between a public adjuster and an insured shall[may] not contain any contract term that:

Page 13 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN (5)[(6)] Prior to the signing of a[the] contract with an insured, a public adjuster shall provide the insured with a separate disclosure document regarding the claim process that states[ shall state] the following:

The salary, fee, commission, or other Page 14 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN consideration paid to the public adjuster is the obligation of the insured, not the insurer." (6)[(7)] (a) A[The] contract between a[the] public adjuster and an[the] insured shall be executed in duplicate to provide an original contract to:

[(9) The public adjuster shall give the insured written notice of the insured's rights as provided in this section.] Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (8)[(10)] (a) The insured shall have[has] the right to rescind a[the] contract with a public adjuster within three (3) business days after the date the contract was signed.

(9)[(11)] If an[the] insured exercises the right to rescind a[the] contract under subsection (8) of this section, anything of value given by the insured under the contract to the public adjuster shall be returned to the insured within fifteen (15) Page 15 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN business days following receipt by the public adjuster of the rescission notice.

(1) A public adjuster shall give an insured written notice of the insured's rights under this section and Sections 2 and 4 of this Act.

(4) (a) A public adjuster shall not act or fail to reasonably act in any manner that obstructs or prevents the insurer or its adjuster from timely conducting an Page 16 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN inspection of any part of the insured property for which there is a claim for loss or damage.

CHAPTER 11 9 (b) Engage in any activities that may be reasonably construed as a conflict of interest, including, directly or indirectly, soliciting or accepting any remuneration of any kind or nature;

Page 17 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN SECTION 4.

Page 18 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN (b) A public adjuster may receive a commission for services provided under this subtitle consisting of:

and Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY b.

(1) The commissioner may place on probation, suspend, or may impose conditions Page 19 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN upon the continuance of a license for not more than twenty-four (24) months, revoke, or refuse to issue or renew any license issued under this subtitle or any surplus lines broker, life settlement broker, or life settlement provider license, or may levy a civil penalty in accordance with KRS 304.99-020, or any combination of actions for any one (1) or more of the following causes:

Page 20 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN (j) Surrendering or otherwise terminating any license issued by this state or by any other jurisdiction, under threat of disciplinary action, denial, or refusal of the issuance of or renewal of any other license issued by this state or by any other jurisdiction;

CHAPTER 11 11 (p) Having been convicted of a misdemeanor for which restitution is ordered in excess of three hundred dollars ($300), or of any misdemeanor involving dishonesty, breach of trust, or moral turpitude;

(t) If a licensee, having assigned, transferred, or pledged a policy subject to a life Page 21 of 24 HB023220.100 - 1207 - XXXX 3/15/2023 8:12 PM Engrossed UNOFFICIAL COPY 23 RS HB 232/EN settlement contract to a person other than a life settlement provider licensed in this state, an accredited investor or qualified institutional buyer as defined, respectively, in Regulation D, Rule 501 or Rule 144a of the Federal Securities Act of 1933, as amended, a financing entity, a special purpose entity, or a related provider trust;