Canadian Underwriter

How this province is tackling inconsistent adjuster licensing

May 24, 2019   by Jason Contant

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Will there soon be a consistent approach to adjuster licensing across Canada?

New Brunswick is one province moving towards that goal. Earlier this month, the Insurance Division of New Brunswick’s Financial and Consumer Services Commission released a consultation paper on licensing of adjusters and damage appraisers in the province, with proposed changes to the definition of an adjuster as well as the removal of one licence level.

The Commission, New Brunswick’s insurance regulator, is undertaking a comprehensive review of the current licensing regimes, nearly a decade after the current Adjusters Regulation was implemented on July 1, 2009.

“The goals are to ensure that the regimes are current, enhance consumer protection and remove any unnecessary administrative burdens,” the Commission said in the paper. “The commission also wishes to increase harmonization with other provinces.”

In New Brunswick, the Insurance Act requires that adjusters – both independent and staff adjusters employed by an insurance company – hold a licence.

The Commission reviewed adjuster licensing regimes in other Canadian jurisdictions. It found that there is no consistency regarding staff adjusters’ licensing. Some jurisdictions, like New Brunswick, require staff adjusters to be licensed, others do not. “The Commission proposes to continue requiring staff adjusters to be licensed because we believe that it enhances consumer protection.”

The Commission also reviewed the definitions for “adjuster” in other jurisdictions, and proposed a new one to harmonize New Brunswick’s definition with that of several other jurisdictions and to include exceptions within that definition.

For example, the current Adjusters Regulation, among other things, specifically exempts an adjuster dealing exclusively with ocean marine losses from requiring a licence. Several other jurisdictions exempt marine insurance claims. Prince Edward Island and Newfoundland and Labrador also exempt a person who is adjusting or dealing solely with claims for aircraft insurance, life insurance or accident and sickness insurance from being licensed.

“Given the unique nature of the claims that they deal with, the Commission proposes to exempt individuals who are dealing with claims for life insurance, accident and sickness insurance, marine insurance, aircraft insurance and legal expense insurance,” the paper said. “Life and accident and sickness claims are not ‘adjusted’ like property and casualty claims and no jurisdiction, including New Brunswick, requires individuals dealing with them to be licensed.”

The current Adjusters Regulation creates a graduated licensing regime by having four different levels of licence:

  • Level 1 – probationary adjuster
  • Level 2 – assistant adjuster
  • Level 3 – adjuster
  • Level 4 – general adjuster

In New Brunswick, there are mandatory progression requirements for Level 1 through to Level 3. However, a Level 3 licensee (whose specializations include property damage, automobile physical damage, automobile accident benefits, and bodily injury) can remain at that level indefinitely and are not required to move to Level 4.

“New Brunswick is unique in having specializations,” the report said. “Level 3 licensees can only work in the specialization(s) for which they hold a licence, but can be licensed for multiple specializations.”

The Commission proposes the following licence levels:

  • Level 1 – assistant adjuster
  • Level 2 – adjuster
  • Level 3 – senior adjuster.

“Many jurisdictions have a similar three level licensing regime, so this will enhance harmonization,” the paper said.

As well, the regulator proposes eliminating mandatory progression, meaning that “Level 1 assistant adjusters can stay at that level for their entire career should they wish. However, they would be subject to direct supervision and would have restrictions on the activities that they are permitted to carry out.”

It also proposes eliminating the specializations for a Level 2 licensee (currently a Level 3 licensee). Level 2 Licensees would be permitted to do several types of adjusting, but their employer would be responsible to ensure that a Level 2 adjuster is competent for the files assigned to them.

A Level 3 licensee under the proposed regime would be permitted to adjust all types of claims and act as a manager of an adjusting firm and/or a designated representative of an adjusting firm (the proposed Level 2 licensee could not).

Comments on the consultation paper must be received in writing on or before July 2.

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