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The absurd effect of commerce law on claims adjusting


September 1, 2018   by Greg Meckbach


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It is easier for Canadian insurance companies to bring in adjusters from the United States than to move Canadian adjusters from one province to another, due in part of the North American Free Trade Agreement (NAFTA), speakers said at the recent Canadian Claims Summit.

Each Canadian province and territory has its own licensing requirements for adjusters, affecting the ability of adjusters to work outside their home provinces. Say, for example, Alberta experiences a catastrophe and the insurers do not have enough adjusters in Alberta to handle the claims. Canadian adjusters in other provinces will not necessarily be allowed to work in Alberta if they are not licensed in Alberta.

The Canadian Independent Adjusters’ Association (CIAA) has been pushing for years to make it easier for adjusters to work in multiple provinces.

“It’s sometimes easier to bring adjusters over the border (from the United States) than it is to do inter-provincial movement, which is ludicrous,” Patti Kernaghan, president and CEO of S.J. Kernaghan Adjusters Ltd., said during the recent Canadian Claims Summit.

Claims professionals “need to push” this issue with regulators, Kernaghan suggested during the summit, hosted Aug. 28 by CIAA in Toronto.

In Canada, there are inter-provincial trade barriers in many industries because provinces regulate many trades and professions such as doctors, engineers and claims adjusters. The issue goes beyond insurance and is rooted in the separation of powers between the federal government and the provinces. Provinces have the power to regulate “property and civil rights.” Some courts have interpreted this as giving the provinces the power to regulate certain occupations.

NAFTA, which is intended to reduce trade barriers among Canada, the U.S. and Mexico, makes it easier for Canadian insurers to bring in claims adjusters from Mexico or the U.S. It does this in part by creating a special category of more than 60 professionals, including “disaster relief insurance claims adjusters,” who can be employed either by an insurer or an independent adjuster.

For example, there is a general rule that if a Canadian firm wants to hire a temporary foreign worker, that employer must get a labour market impact assessment showing that no Canadian worker is available for the job. NAFTA creates an exception to this rule for Canadian insurers wanting to temporarily employ Mexican and American claims adjusters.

NAFTA is currently being renegotiated. Foreign Affairs Minister Chrystia Freeland is in Washington this week meeting with her American counterpart, U.S. Trade Representative Robert Lighthizer.

If NAFTA were to be repealed, it is possible that Canadian insurers would need to jump through more hoops if they want to employ American adjusters in Canada during a catastrophe.

Claims adjusters from the United States have “a different style of adjusting when it comes to a catastrophe,” Kernaghan said during the Town Hall, a Claims Summit session comprised of presidents and CEOs of independent adjusting firms.

She heard examples of this different style from the 2016 wildfire that affected Fort McMurray, Alberta.

“An insurer during the Fort Mac fires said to me that they had all these U.S. adjusters working for them and they had to teach them empathy,” Kernaghan said. “Coming out of Fort Mac, there were a number of companies that said to me, ‘We don’t want to use U.S. adjusters.’”

Also on the Town Hall was Lorri Frederick, president of SCM Insurance Services Ltd.’s ClaimsPro unit.

“We prefer to use Canadian adjusters first,” Frederick said, but added it is sometimes easier to bring in adjusters from the United States.


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