State RegulationsNY specificDifficulty 2/5
After a warehouse fire in Albany, an insurer retains a local firm to investigate the loss and negotiate the settlement with the policyholder. Under the New York Insurance Law, the firm must:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §§2101(g) and 2108, investigating and negotiating the settlement of claims for compensation is adjusting, and it requires an adjuster license issued by the Superintendent of Financial Services. Being retained by the insurer does not exempt the firm from licensing.
Why the other options are wrong
- A) Brokers place coverage for insureds under N.Y. Ins. Law §2101(c); they do not settle claims.
- B) Working at the insurer's direction does not remove the activity from adjuster licensing under N.Y. Ins. Law §2108.
- C) Consultants give coverage advice for fees under N.Y. Ins. Law §2107; claims investigation is a different occupation.
Memory hook
Claims investigation and settlement for pay = adjusting, and adjusting needs its own license.