More than 400 claims-adjusting firms have been licensed in Florida in the last month, in keeping with a state law that requires that firms, not just adjusters, go through the licensing process, the state’s chief financial officer announced.
Senate Bill 1598 was approved by the Legislature and the governor earlier this year, giving regulators another tool to help stem alleged fraud by some adjusters.
The law stipulates that an individual, a firm, a partnership, a corporation, an association, or any other entity may not act in its own name or under a trade name, directly or indirectly, as an adjusting firm unless it is licensed through the Florida Department of Financial Services.
“It’s not enough to yank a bad adjuster’s license,” state CFO Jimmy Patronis, head of the DFS, said in a bulletin. “We needed the authority to go after their entire business organization. Otherwise, we couldn’t get to the root core of some of these fraudulent activities.”
Patronis said that assignment-of-benefit reforms passed 2019 were important, but other measures were also needed. “While there are a lot of great adjusters, I saw firsthand from Hurricane Michael how a bad adjuster can ruin families’ lives,” he said, referring to the 2018 storm that struck the Florida Panhandle, where Patronis hails from.
Insurance companies have complained that some adjusters and their firms have conflicts of interest, in that their close relatives are owners of construction firms that are assigned home restoration work after the adjuster recommends unnecessary work. It’s all part of a web of adjusters, contractors and attorneys that insurers say have cost carriers severely in Florida and have led to litigation, insolvencies and premium increases.
Florida now has almost 175,000 licensed public and independent adjusters, the DFS said.
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