SENATE, No. 991

STATE OF NEW JERSEY

INTRODUCED MARCH 21, 1996

By Senators CAFIERO and CARDINALE

An Act concerning public adjusters and amending and supplementing P.L.1993, c.66.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 13 of P.L.1993, c.66 (C.17:22B-13) is amended to read as follows:

    13. No individual, firm, association or corporation licensed under this act shall:

    a. solicit an insured to enter into any agreement, oral or written, [with an insured] to negotiate or settle claims for loss or damage occurring in this State between the hours of six p.m. and eight a.m. during the 24 hours after the loss has occurred;

    b. have any right to compensation from any insured for or on account of services rendered to an insured as a public adjuster unless the right to compensation is based upon a written memorandum, signed by the party to be charged and by the adjuster, and specifying or clearly defining the services to be rendered and the amount or extent of the compensation on a form and with such language as the commissioner may prescribe;

    c. induce cancellation of a duly executed written memorandum between an insured and a public adjuster;

    d. make any material misrepresentation of facts or advise any person on questions of law in connection with the transaction of business as an adjuster; or

    e. receive, accept or hold any moneys towards the settlement of a claim for loss or damage on behalf of an insured unless the public adjuster deposits the moneys in an interest bearing escrow account in a banking institution or savings and loan association in this State insured by an agency of the federal government. Any funds held in escrow together with interest accumulated thereon shall be the property of the insured until disbursement thereof pursuant to a written memorandum, signed by the insured and by the adjuster, specifying or clearly defining the services rendered and the amount of any compensation to be paid therefrom. In the event of the insolvency or bankruptcy of a public adjuster, the claim of an insured for any settlement moneys received, accepted or held by the adjuster shall constitute a statutory trust.

(cf: P.L.1993, c.66, s.13)

    2. (New section) It shall be a violation of P.L.1993, c.66 (C.17:22B-1 et seq.) for a person who holds himself out or acts as a public adjuster and does not hold a valid license as a public adjuster pursuant to P.L.1993, c.66 (C.17:22B-1 et seq.), an insurance producer licensed pursuant to P.L.1987, c.293 (C.17:22A-1 et seq.) or an insurance company to induce cancellation of a duly executed written memorandum between an insured and a public adjuster.

    3. This act shall take effect immediately.

STATEMENT

    This bill amends and supplements the "Public Adjusters' Licensing Act," P.L.1993, c.66 (C.17:22B-1 et seq.), with respect to certain prohibited acts and practices. It requires that a misrepresentation of fact by a public adjuster must be material for the misrepresentation to be considered a violation of the act. Current law prohibits a public adjuster from entering into an agreement with an insured to negotiate or settle claims between the hours of six p.m. and eight a.m. during the 24 hours after the loss has occurred. This bill changes that prohibition so that it only applies to the soliciting of an agreement by a public adjuster during those times. Additionally, the bill makes it a violation of the act for a person acting as a public adjuster who is not so licensed, a licensed insurance producer or an insurance company to induce cancellation of a duly executed written memorandum between an insured and a public adjuster.

Clarifies certain violations under the "Public Adjusters' Licensing Act."