SENATE BILL REPORT

SHB 2514

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background: An adjuster is a person who, for compensation, investigates or reports claims arising under insurance contracts. An adjuster must be licensed or otherwise authorized under the Insurance Code. An adjuster may work solely for either the insurer as an independent adjuster; or for the insured as a public adjuster. Each category requires a separate license. A license requires a pre-license test specific to adjusters. There is also a requirement of experience or special education or training that can be met if the adjuster works as a trainee for a specified amount of time.

Crop insurance is a type of insurance that may protect producers from losses due to a variety of possible perils, or from a loss of revenue due to declines in the prices of agricultural commodities. A number of different types of policies are offered for a wide variety of crops via the Federal Crop Insurance Corporation, a government-owned corporation managed by the Risk Management Agency (RMA) of the U.S. Department of Agriculture.

The RMA has indicated that it will preempt state authority to oversee the licensing of crop adjusters on July 1, 2011, unless the state has recognized crop insurance as a special line of business, and the majority of the material in the education and testing of a crop adjuster is related to crop-related issues and procedures. A number of states, including this state, were recognized as possible candidates for preemption.

Summary of Bill: Licensing application fees of $50 each are established for independent adjusters and public adjusters, respectively.

Licensing application fees and licensing renewal fees of $50 each are established for crop adjusters.

The licensing of crop adjusters is separate from that of other adjusters. The requirements for licensure are specific to the business of crop adjustment. Employees of companies that are federally certified crop adjusters are exempt.

The separate and specific regulatory requirements include the following: (1) the terms crop adjuster and crop insurance are defined and include revenue insurance; (2) crop adjusters must be separately licensed; (3) an in-state applicant for a resident crop adjuster's license, who has a current crop adjuster's license from another state is not required to take a pre-licensing educational course or an examination; (4) if the pre-licensing education and examination of their home state are substantially similar to those of this state, those applying for a nonresident crop adjuster license are exempt from the examination requirement; (5) the commissioner has authority to establish by rule the pre-licensing, written examination, renewal, and continuing education requirements for crop adjusters. (6) Insurance producers may not act as crop adjusters unless they are licensed as crop adjusters; (7) a nonresident crop adjuster, who is licensed in another state or by the RMA, is not required to be licensed in this state to adjust a single loss or to adjust losses arising out of a common catastrophe.