December 4, 2018 by Jason Contant
There needs to be a hybrid system of self-regulation in concert with regulatory discipline to handle interprovincial mobility issues for independent adjusters, says the president and CEO of an independent adjusting firm.
“We need a hybrid system of self-regulation in concert with all of the regulators,” said Patti Kernaghan, president and CEO of Kernaghan Adjusters in an interview with Canadian Underwriter last week. “They can do the discipline, but we need to be there and create a harmonized licence across Canada. It is the only way that makes sense.”
Each province and territory has its own licensing requirements – and idiosyncrasies – for adjusters. This means that an adjuster from Ontario, for example, may not necessarily be allowed to work in Alberta if they are not licensed in that province. So, when there is a catastrophe, sometimes companies bring in an adjuster from the United States rather than move an adjuster from one province to another.
“That is a huge mobility issue,” said Kernaghan. “And yes, it is easy to get adjusters from the States into Canada and it is exasperating for Canadian companies when it comes to moving people from province to province. So, we could bring somebody up from the States, but an adjuster in the province of Ontario that has a letter of authority is going to have to write an exam before they get licensed in Alberta when there’s a storm.”
Canadian Underwriter asked Kernaghan about the existing mobility barriers for independent adjusters. She said the biggest one is licensing, adding that the Canadian Independent Adjusters’ Association (CIAA) has worked tirelessly for decades to address the interprovincial licensing issues that arise, especially during cats. “The regulators still don’t understand the urgency with which we need to move when a catastrophe occurs.”
Given that independent adjusting is a vertical market with the P&C industry – estimated at only 3-5% of the P&C market – perhaps the market doesn’t demand enough attention. As well, bylaws or the insurance laws could be affected, and then there needs to be regulatory approval.
Kernaghan said there were changes in Manitoba for independent adjusting licences a few years ago, but with a government change, they haven’t gone through. “It’s very frustrating.”
She hopes there will be changes in 2019 to interprovincial mobility. Kernaghan says when she began her insurance career in 1988, there were licences, but not with all the restrictions that there are now. “It’s slowly been built up over the decades. Now we need to tear it down and harmonize and work together as a profession.”