28 TAC §19.713
The Commissioner of Insurance adopts new §19.713 concerning Public Insurance Adjusters Rules of Professional Conduct and Ethics. The new section is adopted without changes to the proposed text as published in the July 2, 2004 issue of the Texas Register (29 TexReg 6223) and will not be republished.
This section is necessary to implement Texas Insurance Code Article 21.07-5, §18(1), enacted as part of Senate Bill 127, 78 th Legislature Regular Session. New §19.713 concisely states certain significant legal and ethical requirements for public insurance adjusters´ professional conduct. Thus, §19.713 will instruct public insurance adjusters regarding their required professional ethical behavior.
The additional requirements contained in §19.713 will enhance consumer protection efforts by providing a reference point for consumers and others regarding public insurance adjusters´ professional conduct. The requirements will serve as a tool for directing public insurance adjusters´ interactions with the public and will facilitate the continued improvement of the professional ethical conduct of public insurance adjusters.
Legal and ethical requirements that regulate public insurance adjusters´ professional conduct are found in existing laws, such as laws relating to matters of licensure, as well as those defining specific obligations of public insurance adjusters. Accordingly, although §19.713 contains certain requirements for the legal and ethical professional conduct of public insurance adjusters, it does not contain an exhaustive list of the legal or ethical requirements that govern the actions of public insurance adjusters.
Adopted §19.713 provides public insurance adjusters with a statement of certain legal and ethical requirements that are of prime importance in the conduct of their business. It also provides that the list of legal and ethical requirements is not exhaustive.
Specifically, §19.713 states that the requirements for public insurance adjusters include: conducting their business "fairly and in good faith without detriment to the public," refraining from improper solicitation, refraining from using misrepresentations in the conduct of their business, charging appropriate fees and commissions, completing continuing education, possessing adequate knowledge and experience to handle their work appropriately, not engaging in the unauthorized practice of law, not engaging in activities that may be construed as presenting a conflict of interest or obtaining a financial interest in salvaged property that is the subject of a claim, using only advertisements that do not violate the Insurance Code, and using contract forms that are approved by the commissioner.
Comment: A commenter expressed support for § 19.713, but also stated that other jurisdictions have approved more specific regulations concerning ethical conduct of public adjusters, and emphasized that the department should not be precluded from being more specific in future regulations if necessary.
Agency Response: The department appreciates the commenter´s support. Section 19.713 does not contain all of the requirements by which public insurance adjusters must abide, but provides standards of fair and reasonable conduct for public insurance adjusters to follow within their industry. Other statutory provisions, such as licensure, have overlapping requirements regarding the conduct of public insurance adjusters. The department will monitor the effect of the rule and, if necessary, propose expansion to address issues that might arise in the future.
NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTIONS.
For: Office of Public Insurance Counsel.
This section is adopted under Insurance Code Article 21.07-5 and §36.001. Article 21.07-5, §18(1) directs the commissioner to adopt a code of ethics for public insurance adjusters that governs their conduct and sets forth various requirements for public insurance adjusters. Section 36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
§19.713. Public Insurance Adjuster Rules of Professional Conduct and Ethics.
(a) This section states certain legal and ethical requirements that are of prime importance for public insurance adjusters´ professional conduct. This section does not exhaust the legal or ethical requirements that govern public insurance adjusters.
(b) All public insurance adjuster licensees shall comply with the following requirements :
(1) Licensees shall conduct business with their clients, insurance companies, and the public, in a spirit of fairness and justice.
(2) Licensees shall not employ any improper solicitation which would violate Insurance Code Article 21.07-5 or this subchapter.
(3) Licensees shall not make a misrepresentation, in violation of Insurance Code Article 21.07-5, §23(m)(1), to an insured or to an insurance company in the conduct of their actions as a public insurance adjuster.
(4) Licensees shall charge only commissions and fees which are in compliance with the requirements set forth in Insurance Code Article 21.07-5 and this subchapter.
(5) Licensees shall complete continuing education as required by Insurance Code Article 21.07-5 and this subchapter.
(6) Licensees shall have appropriate knowledge and experience for the work they undertake and should obtain competent technical assistance, when necessary, to help handle claims and losses outside their area of expertise.
(7) Licensees shall not engage in the unauthorized practice of law.
(8) Licensees shall avoid situations of conflict of interest, including acquiring any interest in salvaged property or participating in any way, directly or indirectly, in the reconstruction, repair or restoration of damaged property that is the subject of a claim adjusted by the licensee, except as allowed in Insurance Code Article 21.07-5 and this subchapter.
(9) Licensees shall not disseminate or use any form of agreement, advertising, or other communication, regardless of format or medium, in this state that is harmful to the profession of public insurance adjusting and that does not comply with Insurance Code Article 21.07-5, this subchapter or other provisions of the Insurance Code.
(10) Licensees shall use only contracts that comply with Insurance Code Article 21.07-5 and this subchapter.