2.1 Claims Adjuster Standards of Conduct, Adjuster Compensation Limits & Insurer Referrals (RS 22:1674.1, 1675, 1676)
Key Takeaways
- R.S. 22:1674.1(A) contains twenty-two standards of conduct binding on all Louisiana claims adjusters; Act 372 of 2026 added the twenty-second standard effective August 1, 2026.
- Standard (22) requires an adjuster to include his Louisiana license number in all electronic communications to the insured, other than text messages, sent for business.
- Claims adjusters must read and acknowledge the standards of conduct at license issuance and at every renewal (R.S. 22:1674.1(B)).
- A violation is grounds for administrative action and is deemed an unfair trade practice under R.S. 22:1964, enforceable with R.S. 22:1969 penalties, but it creates no private civil cause of action (R.S. 22:1674.1(C)–(D)).
- An insurer may not knowingly refer a claim to an unlicensed adjuster and must confirm licensure with the commissioner before referring (R.S. 22:1676).
Where the Standards Came From
Act 402 of the 2021 Regular Session repealed the former R.S. 22:1674 and enacted R.S. 22:1674.1, a code of conduct for claims adjusters handling Louisiana claims. The Act also requires adjusters to acknowledge the standards when the license is issued and at each renewal; the LDI builds that acknowledgment into initial and renewal applications. Act 372 of 2026 added standard (22), effective August 1, 2026, so the LDI's acknowledgment form (revised 8/2026) now lists twenty-two standards. Treat any study source that counts "21 standards" as out of date.
The Twenty-Two Standards (R.S. 22:1674.1(A))
| # | An adjuster... |
|---|---|
| 1 | shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee or other consideration established with the insurer |
| 2 | shall not acquire any interest in salvage of property subject to the contract with the insurer |
| 3 | shall not solicit employment for, recommend or solicit engagement of any attorney, contractor or subcontractor in connection with a loss the adjuster is handling |
| 4 | shall not solicit or accept compensation from any contractor or subcontractor engaged by or for the insured |
| 5 | shall treat all claimants fairly |
| 6 | shall not provide favored treatment to any claimant |
| 7 | shall adjust all claims strictly in accordance with the insurance contract |
| 8 | shall not approach investigations, adjustments and settlements in a manner prejudicial to the insured |
| 9 | shall make truthful and unbiased reports of the facts after a thorough investigation |
| 10 | shall handle every adjustment and settlement with honesty and integrity, with no remuneration beyond what the adjuster is legally entitled to |
| 11 | shall act with dispatch and due diligence in achieving a proper disposition of the claim |
| 12 | shall promptly report to the Department any conduct by a licensed insurance representative that violates Title 22 or a department rule |
| 13 | shall exercise appropriate care when dealing with elderly claimants |
| 14 | shall not negotiate or effect settlement with a third-party claimant represented by an attorney without the attorney's consent, if the adjuster knows of the representation; "third-party claimant" does not include the insured or the insured's resident relatives |
| 15 | may interview any witness without the consent of opposing counsel or party, but must scrupulously avoid suggesting that the witness suppress or deviate from the truth; a witness who gives a signed or recorded statement must receive a copy on request |
| 16 | shall not advise a claimant to refrain from seeking legal advice, or advise against retaining counsel |
| 17 | shall not knowingly misrepresent applicable policy provisions, contract conditions or pertinent state laws, orally or in writing |
| 18 | shall not undertake a claim for which the adjuster is not currently competent and knowledgeable about the coverage terms, or that exceeds the adjuster's current expertise |
| 19 | shall not permit an unlicensed employee or representative to conduct business that requires a license |
| 20 | shall not, while licensed as a claims adjuster, represent or act as a public adjuster |
| 21 | shall not materially misrepresent the terms and coverage of an insurance contract to an insured or other interested party with intent to settle a claim on less favorable terms than the contract provides |
| 22 | shall include his Louisiana license number in all electronic communications to the insured, other than text messages, composed and sent as part of business or employment |
Enforcement Without a Private Lawsuit
- Acknowledgment (R.S. 22:1674.1(B)): read and acknowledge the standards at issuance and renewal, in the manner the commissioner prescribes. NIPR captures it as a Louisiana-specific application question.
- Administrative action (R.S. 22:1674.1(C)): any violation is grounds for administrative action against the licensee. It is also deemed an unfair trade practice under R.S. 22:1964, so the commissioner may enforce the R.S. 22:1969 penalties: up to $1,000 per violation, or up to $25,000 per violation when the adjuster knew or should have known.
- No new civil claim (R.S. 22:1674.1(D)): the section does not create a civil action or any cause of action not otherwise provided by law. An insured cannot sue the adjuster for "violating standard 5." Remedies against insurers for claim handling come from R.S. 22:1892 and 22:1892.2.
Frequently Tested Distinctions
| Trap | Correct rule |
|---|---|
| "Once any party hires a lawyer, the adjuster may never talk to them." | Standard (14) covers third-party claimants represented by counsel. The insured and the insured's resident relatives are excluded from that term, and the attorney may consent. |
| "Interviewing a witness requires the other side's permission." | Standard (15) lets the adjuster interview witnesses without opposing counsel's consent, but the adjuster must not influence testimony, and must give the witness a copy of a signed or recorded statement on request. |
| "An adjuster can suggest a good roofer." | Standard (3) bars recommending or soliciting engagement of contractors, subcontractors or attorneys on a loss the adjuster is handling, and standard (4) bars taking compensation from them. |
| "Licensed claims adjusters may moonlight as public adjusters." | Standard (20) prohibits it while the claims adjuster license is held. |
| "The license-number rule covers every message." | Standard (22) covers electronic communications to the insured, excluding text messages. |
Payments to Adjusters (R.S. 22:1675)
- No savings-based pay: an insurer may not pay any adjuster, or anyone engaged in adjusting losses, a fee or compensation beyond a regular fixed salary or stipend. Nor may it contract to pay the adjuster any portion of the amount "saved" to the insurer through the adjuster's efforts, in addition to or instead of salary. An adjuster's pay may never depend on how much less the insurer pays.
- Reciprocal fee: an adjuster licensed in a jurisdiction that imposes a higher tax, fee, license, bond or deposit than Louisiana does must pay the commissioner a license fee equal to that jurisdiction's before adjusting a Louisiana loss. Adjusters permanently employed by an authorized insurer are excluded.
Referral by Insurer (R.S. 22:1676)
An insurer may not knowingly refer a claim or loss for adjustment to a person acting as an adjuster unless the person holds a Louisiana license. Before referring, the insurer must confirm with the commissioner that the person is licensed. The insurer may keep referring claims until it learns, or the commissioner tells it, that the person no longer holds a license.
Exam Scenarios
Scenario 1: The elderly insured and the depreciation claim
An adjuster tells an 84-year-old insured that Louisiana law bars recovery of depreciation on any roof over ten years old, even though her replacement cost policy allows recoverable depreciation. She signs a low settlement. The adjuster violated standards (13), (17) and (21): appropriate care with elderly claimants, knowing misrepresentation of policy provisions and state law, and material misrepresentation to settle on less favorable terms. The LDI may act against the license and treat the conduct as an unfair trade practice.
Scenario 2: The roofer's referral bonus
A roofing company offers an adjuster $250 for every insured who hires it. Accepting violates standard (4). Steering insureds to the roofer violates standard (3). If a licensed public adjuster arranged the scheme, the claims adjuster must also report it promptly to the Department under standard (12).
As of September 2026, how many standards of conduct does R.S. 22:1674.1(A) contain, and what did the newest one add?
A third-party claimant in an auto liability claim retains an attorney, and the adjuster is notified. Under standard (14), what may the adjuster do?
A witness gives an adjuster a recorded statement and later asks for a copy. What does R.S. 22:1674.1(A)(15) require?
Which statement correctly describes the consequences of violating the Louisiana claims adjuster standards of conduct?
Under R.S. 22:1675, which adjuster compensation arrangement is prohibited?