15.1 The Florida Adjuster Code of Ethics and Conflicts of Interest

Florida Adjuster Code of Ethics (FAC Rule 69B-220.201)

Quick Answer: Promulgated by the Florida Department of Financial Services (DFS), Florida Administrative Code (FAC) Rule 69B-220.201 establishes the mandatory Adjuster Code of Ethics governing all company, independent, and public adjusters. It mandates utmost good faith, integrity, and fair dealing, while strictly barring financial conflicts of interest, salvage acquisition without written consent, and referral kickbacks. Crucially, adjusters must never advise claimants against seeking legal counsel. For public adjusters, Florida law mandates a $50,000 surety bond, strict advertising standards, prompt 30-day communications, and statutory fee caps: 10% on declared emergency claims (for 1 year) and 20% on non-emergency claims. Florida strictly bans holding an all-lines license (6-20/7-20) and public adjuster license (3-20) concurrently.

Claims adjusting is a position of public trust. When policyholders experience catastrophic property loss, bodily injury, or commercial disruption, they interact with insurance claims adjusters during moments of profound financial and personal vulnerability. To ensure that insurance claims are administered with uncompromised integrity, the Florida Department of Financial Services (DFS) enacted Rule 69B-220.201 of the Florida Administrative Code (FAC). This rule codifies an exhaustive, legally enforceable Adjuster Code of Ethics that binds every licensed adjuster operating within the state of Florida.

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Universal Ethical Mandates Governing All Adjusters

FAC Rule 69B-220.201 applies universally across the claims profession. Whether an individual is licensed as a Company (Staff) Adjuster (6-20), an Independent Adjuster (6-20/7-20) representing multiple carriers, or a Public Adjuster (3-20) advocating for policyholders, they must strictly adhere to the ethical baselines established in Rule 69B-220.201.

1. Duty of Utmost Good Faith and Fair Dealing

Every adjuster must conduct claims investigations, evaluations, and negotiations with scrupulous integrity, utmost good faith, and honesty. Adjusters must approach every claim with open, unbiased minds, according fair and equitable treatment to all parties involved—including insureds, claimants, carriers, and third-party vendors.

2. Courtesy and Impartial Objectivity

Adjusters are ethically mandated to treat all claimants and policyholders with courtesy and impartial objectivity. An adjuster must never allow personal prejudice, frustration, or corporate pressure to distort their claims determination. Adjusters must never take unfair advantage of a claimant who is unrepresented or unsophisticated in insurance coverages, policy language, or claims adjusting procedures.

3. Competence and Diligence

An adjuster must handle each assigned claim with reasonable promptness and diligence. An adjuster must possess thorough knowledge of the Florida Insurance Code, administrative rules, and the precise provisions of the insurance policies they interpret. When an adjuster encounters a loss outside their technical competence (such as an intricate commercial boiler explosion or complex maritime salvage), they must seek appropriate expert technical guidance or reassign the file.

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Prohibitions on Financial Conflicts of Interest

Financial conflicts of interest represent one of the most heavily tested areas on the Florida adjuster licensing examination. FAC Rule 69B-220.201 establishes rigorous firewalls designed to prevent adjusters from self-dealing or exploiting damaged property for personal financial gain.

Salvage, Repair, and Reconstruction Restrictions

Under Rule 69B-220.201(3), an adjuster is strictly prohibited from acquiring any direct or indirect financial interest in the salvage, repair, or reconstruction of property involved in any claim they adjust, unless they have received the prior, express written consent of both the first-named insured and the insurer:

• Salvage Transactions: An adjuster cannot purchase damaged vehicles, structural building materials, or salvaged commercial inventory from a claim they handled, even through an intermediary or corporate shell.
• Repair and Restoration: An adjuster cannot steer policyholders toward a reconstruction firm, roofing company, or water mitigation contractor in which the adjuster, their spouse, or an immediate family member holds an equity interest, financial stake, or management role, without full written disclosure and mutual written consent.

Strict Ban on Kickbacks, Referral Fees, and Gratuities

Adjusters are categorically forbidden from soliciting, accepting, or agreeing to accept any kickback, referral fee, gratuity, commission, or thing of value from any contractor, public adjuster, appraiser, building consultant, attorney, auto body shop, or salvage dealer.

• An independent adjuster cannot accept a $500 referral fee from a water extraction company for assigning a loss.
• An auto physical damage adjuster cannot accept free automotive repairs, gifts, or discounted parts from a collision center in exchange for steering damaged fleet vehicles to that shop.
• Any violation of these kickback prohibitions constitutes an immediate ground for administrative license suspension, revocation, and severe civil monetary penalties by the DFS.

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Prohibited Conduct Regarding Legal Representation

A core tenet of Florida's regulatory framework is safeguarding the claimant's legal rights. Under FAC Rule 69B-220.201, claims adjusters must adhere to strict behavioral boundaries when a claimant considers or retains legal counsel.

Prohibition Against Discouraging Legal Counsel

An adjuster must never advise a claimant against seeking legal counsel or discourage them from retaining an attorney.

• An adjuster cannot state or imply that hiring an attorney will delay the settlement, reduce the net payout, or trigger an adversarial response from the carrier.
• An adjuster cannot threaten to withdraw a settlement offer or close a file simply because the claimant expresses an intention to consult legal representation.

Direct Communication with Represented Claimants

Once an adjuster receives notice that a claimant or policyholder is officially represented by an attorney with respect to a claim, the adjuster must not communicate or negotiate directly with the claimant regarding the claim without the prior consent of the claimant's legal counsel. All correspondence, requests for records, settlement offers, and investigative interviews must be routed directly through the claimant's attorney of record.

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Identifying Yourself and Answering the Department

Two duties in this area are separately listed on the Florida examination content outline, and both are enforceable.

Adjuster Identification

• At the inspection. Under F.S. § 627.70131(3)(b), when a residential property investigation involves a physical inspection, the licensed adjuster assigned by the insurer must give the policyholder a printed or electronic document containing the adjuster's name and state adjuster license number.
• In every later communication. Under § 627.70131(3)(c), any subsequent communication with the policyholder about the claim must also include the adjuster's name and license number, though it may be delivered together with other claim information.
• In the insurer's records. Under § 627.70131(4)(a), the insurer must keep a log of each adjuster who communicates with the policyholder and must produce that list to the insured, the office or the department on request.
• Under the Code of Ethics. An adjuster must promptly and truthfully identify himself or herself and the principal represented, and may not misrepresent the identity of the employing insurer or adjusting firm. Truthful identification is also what makes the ethical bar on negotiating directly with a represented claimant workable.

Response to Department Inquiries

Florida treats silence toward the regulator as its own violation. Under F.S. § 624.307(10)(b), any person licensed, issued a certificate of authority, or made an eligible surplus lines insurer by the department or the office must respond, in writing or electronically, to the Division of Consumer Services within 14 days after receiving a written request for documents and information concerning a consumer complaint. The division may impose an administrative penalty for non-compliance of up to $5,000 per violation against a licensed entity and up to $1,000 per violation against an individual. The response must address the issues and allegations raised in the complaint and include the requested documents that are not subject to attorney-client or work-product privilege.

The division may impose an administrative penalty for non-compliance:

These penalties sit alongside, not instead of, the department's general disciplinary powers. Refusing or failing to comply with a lawful subpoena issued by the department is separately a discretionary ground for suspension or revocation under F.S. § 626.621, and a willful failure to comply with a proper order or rule is a mandatory ground under F.S. § 626.611.

Practical Rule

A consumer complaint letter from DFS is not correspondence to be triaged behind claim work. Calendar the 20-day deadline the day it arrives, answer every allegation in writing, and attach the file documents. The response itself becomes part of the department's record and is frequently the first document a market conduct examiner reads.