The Honorable Joseph D. Hawkins      Opinion NO. h-846
Commissioner of Insurance
State Board of Insurance             Re: Authority of the
1110 San Jacinto                     State Board of Insurance
Austin, Texas 78786                  to license public adjusters
                                     under article 21.07-4,
                                     Insurance Code.

Dear Mr. Hawkins:
     You have requested our opinion regarding whether the
State Board of Insurance may license a person who investigates
losses on behalf of an insured.
     Article 21.07-4, Texas Insurance Code, defines an
'adjuster' as
          any person who, as an independent con-
          tractor, or as an employee of an
          independent contractor, adjustment
          bureau, association, insurance company
          or corporation, local recording agent,
          managing general aqent, or self-insured,
          investigates or adjusts losses on behalf
          of either an insurer or a self-insured,
          or any person who supervises the handling
          of claims. Sec. l(a).
Such definition excludes perrons who investigate losses on
behalf of an insured, someti s referred   to as "public
adjusters." Prior  to the er-, tment of article 21.07-4,
such persons were included within tf+ definition of "insurance
adjuster" contained in section (3) zf article 19.01, Title
122A, Taxation-General, V.T.C.S. That provision, however,
was specifically repea! d by section 21 of article 21.07-4
of the Insurance Code.




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              The Honorable Joseph D. Hawkins - page 2 W-846)


                   Although he is not included within the definition of
              "adjuster" in section l(a) of article 21.07-4, neither is a
              public adjuster expressly excepted therefrom by section
              l(b), which provides:
                            (b) 'Adjuster' shall not include:
                            (1) an attorney at law who adjusts
                        insurance losses from time to time and
                        incidental to the practice of law, and
                        who does not advertise   or represent that
                        he is an adjuster:
                            (2) a salaried employee of an insurer
                        who is not regularly engaged in the adjust-
                        ment, investigation, or supervision of
                        insurance claims:
                            (3) persons employed only for the purpose
                        of furnishing technical assistance to a
                        licensed adjuster, including, but not
                        limited to, photographers, estimators,
                        private detectives, engineers, handwriting
                        experts, and attorneys at law;
                            (4) a licensed agent or general agent
                        of an authorized insurer who processes
                        undisputed and/or uncontested losses for
                         such insurer under policies issued by said
                        agent or general agent;
                             (5) a person who performs clerical duties
                        with no negotiations with the parties on
                         disputed and/or contested claims;
                             (6) any person who handles claims arising
                         under life, accident and health insurance
                         policies.
               Public adjusters are presently excluded from licensing by
               rule of the State Board of Ins.rance.
                    Since a public adjuster i- not included within the
               definition of "adjuster" in section l(a), such a person is
               not required to comply with the mandatory licensing pro-
               visions of section 2(a), which are applicable only to every
               person who "hold[s] him% .f out to be an adjuster." The
               Board of Insurance is, honever, required to issue a license to
               any applicant who meets the licensing qualifications set forth
               in section 7:




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             The Honorable Joseph 0. Hawkins - page 3 (H-8461


                          Sec. 7. The commissioner shall license
                       as an insurance adjuster only an individual
                       who has otherwise complied with this Act,
                       and who has furnished evidence satisfactory
                       to the board that:
                           (1) he is at least 18 years of age:
                           (2) he is a bona fide resident of
                       this state, or is a resident of a state
                       or country which will permit residents of
                       this state to act as insurance adjusters
                       in such other state or country;
                           (3) if he is a nonresident of the
                       United States, he has complied with all
                       federal laws pertaining to employment or
                       the transaction of business in the United
                       States;
                           (4) he is a trustworthy person;
                           (5) he has had experience or special
                       education or training with reference to
                       the handling of loss claims under insur-
                       ance contracts of sufficient duration
                       and extent to make him competent to
                       fulfill the responsibilities of an
                       insurance adjuster: and
                           (6) he has successfully passed an
                       examination as required by the commissioner
                        in accordance with this Act or has been
                       exempted according to the provisions of
                        this Act.
             Article 21.07-4 does not contain a requirement that a person
             must investigate or adjust losses on behalf of an insurer
             or a self-insured in order to obtain a license. Thus, in
             our opinion, although a public adjuster is not required to
             comply with the licensing pr isions of article 21.07-4 of the
             Insurance Code, the State Bo&.;dof Insurance is required to
             issue a license to any person who complies with the statutory
             qualifications for obtaining an adjuster's license.




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The Honorable Joseph D. Hawkins - page 4 (H-8461


                       SUMMARY
            Although a public adjuster is not required
            to comply with the licensing provisions of
            article 21.07-4 of the Insurance Code, the
            State Board of Insurance is required to
            issue a license to any person who complies
            with the statutory qualifications for
            obtaining an adjuster's license.

                                 Very truly yours,



                                 Attorney General of Texas
APPROVED:                 w




Opinion Committee

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