In my previous article on prelicensing education, I carefully noted that the information pertained to producer licenses for the major lines of authority; and that requirements for other license types and lines of authority might differ. This is especially true for adjusters due to the lack of universal reciprocity among the states. Some jurisdictions do not license adjusters at all or license only certain types of adjusters.
For independent adjusters, in particular, the rules governing reciprocity between states are particularly complex. When two states have a large disparity in licensing requirements, they are less likely to offer reciprocity. Insurance professionals wanting to work in the “more difficult” state may find themselves required to pass the licensing exam there and meet any prelicensing and/or continuing education requirements in addition to any obligations owed to their resident state.
All this means that an adjuster needs to carefully consider their options when developing a licensing strategy. Understanding the rules and different educational requirements in each state can help them ensure that compliance doesn’t become overwhelming.
Not All Adjusters Are Alike
The complexities begin with the fact that not all adjusters operate in the same way. There are three main types of licenses, each offered by different states and imposing distinct educational requirements both before and after the license issues.
Company adjusters work directly for insurance companies and represent the interests of their employers in the claims resolution process. Currently, 15 states license company adjusters — although in Nevada licensing is optional.
Independent adjusters also represent the insurer’s interests but function as independent contractors for the carrier or a contracted Third Party Administrator (TPA). Increasingly, insurance companies utilize IAs rather than maintaining in-house teams. This popularity is reflected in the fact that 31 jurisdictions offer some form of this license.
Public adjusters, on the other hand, represent the interests of the policyholder. Forty-one (41) states currently license public adjusters — making it the most widely available license type of the three.
Some states also license “specialty” adjusters for areas such as crop insurance or workers’ compensation. A few still offer apprentice/trainee adjuster licenses, but these seem to be gradually phasing out. South Dakota is the only jurisdiction that does not license any type of adjuster.
Prelicensing education requirements vary greatly depending on the state. Some regulators want applicants to complete prelicensing courses, while others credit would-be adjusters for past experience or professional oversight. Thirty-seven (37) states impose no training demands at all.
Even within a single state, however, requirements can vary by the type of adjuster license. Indiana, for example, wants independent adjusters to complete 40 hours of training prior to licensing, while public adjusters have no such obligation. In New York, the situation is reversed — although public adjusters can submit a statement from their employer to be exempted.
For the seven states that require prelicensing coursework for at least some applicants, the total number of hours ranges from 20 to 40. For the ten states that accept experience, the amounts (if specified) can be anywhere from 6 months to 5 years. In fact, New Hampshire occupies both ends of the spectrum with independent adjusters on the low end and public adjusters on the high one!
When it comes to CE, all but 11 states require credits from at least some licensees. Four jurisdictions ask only independent adjusters to complete CE, with 24 hours — including 3 hours of ethics education — being the most common. Sixteen states want only public adjusters to take continuing education. Requirements vary from 12 to 24 hours, with most states also requiring a certain number of ethics credits.
For the remaining jurisdictions, requirements range from 12 to 24 hours. Often, independent and public adjusters have different requirements in the same state. It’s also common for regulators to include ethics, state law, and similar topics in these totals.
As with all CE, licensees must take courses from a state-approved provider and file certificates of completion with regulators prior to the license renewal deadline, usually every two years.
A Friendly Reminder from ILSA
Beginning in July 2022, Washington joins the list of states that require adjusters to submit appropriate continuing education credits in order to renew their licenses. Click here to read the legislation mandating this new requirement.
So What Does This Mean for Adjusters?
Adjusters, especially those working as independent contractors, often operate in multiple jurisdictions throughout the year, following the various “risk seasons” in order to meet consumers’ needs. When planning for such a career, they need to carefully consider not only the costs involved to obtain and maintain their actual licenses but also whether they have the time available to meet ongoing educational requirements. After all, for adjusters — perhaps more than any other type of insurance professional — time really is money.