1.1 Who Must Be Licensed: Definitions, Exemptions & the License Requirement (RS 22:1661–1663)
Key Takeaways
- Under La. R.S. 22:1663(A), a person may not act or hold himself out as a claims adjuster in Louisiana unless licensed under the Claims Adjuster Act.
- R.S. 22:1661(1) defines an adjuster as an individual who investigates or adjusts losses on behalf of an insurer, as an independent contractor or as an employee of a listed organization.
- A business entity acting as a claims adjuster needs its own license and must designate a licensed adjuster responsible for its compliance (R.S. 22:1663(B)).
- R.S. 22:1662(2)(b) exempts an insurer's employee who adjusts a first-party property and casualty loss of $2,000 or less.
- Attorneys acting as attorneys, technical experts assisting a licensed adjuster, and clerical staff who do not negotiate disputed claims are exempt under R.S. 22:1662.
Why This Section Matters on Series 204
PSI's content outline for the Louisiana Examination for Property and Casualty Adjuster (Series 204) gives Louisiana Insurance Regulation 23% of the exam, about 35 of the 150 scored questions. The outline lists licensing requirements (R.S. 22:1663), license types (R.S. 22:1665–1670) and each definition in R.S. 22:1661 by citation. Expect questions that describe a person's job duties and ask whether Louisiana law requires a license.
Where Louisiana's Adjuster Law Lives
| Topic | Location in Title 22 |
|---|---|
| Claims adjusters (staff and independent) | Part IV, R.S. 22:1661–1679 |
| Public adjusters (represent the insured) | Part V, R.S. 22:1691–1708 |
| Unfair trade practices, including unfair claims settlement practices | R.S. 22:1961–1972 |
| Payment and adjustment of claims | R.S. 22:1892, 22:1892.2 and 22:1892.3 |
| Insurance fraud | R.S. 22:1921 et seq. |
The Louisiana Department of Insurance (LDI), headed by the Commissioner of Insurance, licenses and disciplines adjusters. PSI Services runs the licensing examinations for the LDI, and license applications are filed electronically through the National Insurance Producer Registry (NIPR).
The Statutory Definitions (R.S. 22:1661)
- Adjuster: an individual who investigates or adjusts losses on behalf of an insurer, either as an independent contractor or as an employee of an adjustment bureau, an association, a property and casualty producer, an independent contractor, an insurer, or a managing general agent.
- Business entity: a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.
- Fingerprints: an impression of the lines on the finger taken for identification, either electronic or ink converted to electronic format.
- Home state: the District of Columbia or any U.S. state or territory where the adjuster's principal place of residence or principal place of business is located. If neither of those states has a substantially similar law governing adjusters, the adjuster may declare another state where he becomes licensed and acts as an adjuster to be the home state.
- Individual: a natural person.
- Insurer: any type of insurer, whether authorized or unauthorized, conducting business in Louisiana.
- Person: an individual or a business entity.
- Uniform individual application and 9. uniform business entity application: the current NAIC uniform license applications.
Exam tip: The claims adjuster definition is built around working for the insurer. A person paid to adjust for the policyholder is a public adjuster, which requires a separate license under R.S. 22:1693.
The License Requirement (R.S. 22:1663 and 22:1664)
- Acting or holding out: "A person shall not act or hold himself out as a claims adjuster in this state unless the person is licensed as a claims adjuster" (R.S. 22:1663(A)). Advertising or introducing yourself to a claimant as the adjuster counts as holding out, even before you adjust anything.
- Anyone working in Louisiana: R.S. 22:1664(A) requires any person who is employed or contracts to perform services in Louisiana as an adjuster to obtain a license from the Department.
- Truthful applications: the applicant declares under penalty of perjury, and under penalty of refusal, suspension or revocation of the license, that application statements are true, correct and complete (R.S. 22:1664(B)).
- Business entities: an adjusting firm acting as a claims adjuster must obtain its own license on the uniform business entity application. Before approving it, the commissioner must find that the entity paid the fees set in R.S. 22:821 and designated a licensed adjuster responsible for the entity's compliance with Louisiana insurance laws, rules and regulations (R.S. 22:1663(B)). R.S. 22:1665(C) adds that the entity may designate only licensed individual claims adjusters to exercise its license.
- Insurers must check first: an insurer may not knowingly refer a claim to an unlicensed person and must confirm licensure with the commissioner before referring a claim (R.S. 22:1676).
The General Exemptions (R.S. 22:1662)
The Claims Adjuster Act does not apply to the persons below. Paragraph (13), a former workers' compensation exemption, was repealed effective August 1, 2017.
| Paragraph | Exempt person | Key limit |
|---|---|---|
| (1) | Attorney admitted to practice in Louisiana | Only while acting in a professional capacity as an attorney |
| (2)(a) | Insurer employee | Not regularly engaged in adjusting or investigating claims |
| (2)(b) | Individual employed by an insurer | Adjusts a first-party P&C loss not exceeding $2,000, or authorizes payment where the specified coverage limit is $2,000 or less |
| (3) | Person furnishing technical assistance to a licensed adjuster | Investigator, attorney, engineer, estimator, handwriting expert, photographer, private detective |
| (4) | Producer of an authorized insurer, or the producer's licensed employee | Processes an undisputed or uncontested loss for the insurer under a policy the producer issued |
| (5) | Clerical staff | Does not negotiate with parties on disputed or contested claims |
| (6) | Claim-information and data-entry staff of a licensed business entity or its affiliate | Automated claims adjudication for consumer electronic products; no more than 25 people under one licensed adjuster or producer |
| (7) | Handlers of life, accident and health claims | Those lines are outside the Act |
| (8) | Right-of-way agents | Claims arising from servitudes, leases or permits they acquire |
| (9) | Fraud investigators | Do not adjust losses or determine claim payments |
| (10) | Full-time salaried employee of a property owner or management company | Not held out as an adjuster and not hired for a specific fire or casualty claim |
| (11) and (12) | Handlers of vehicle mechanical breakdown or property residual value claims | Specialty products defined elsewhere in Title 22 |
| (14) | Handlers of commercial excess-coverage claims | Excess coverages as classified by R.S. 22:47 |
| (15) | A person who settles only reinsurance or subrogation claims | No first-party or liability adjusting |
Insurers can also bring out-of-state adjusters into Louisiana after a catastrophe without a license, but those adjusters must be registered under R.S. 22:1667. The next section covers registration.
Applying the Rules: Exam Scenarios
Scenario 1: The $1,800 fence claim
A salaried underwriting employee of a Louisiana insurer handles a first-party wind claim for a damaged fence and authorizes an $1,800 payment. The employee is exempt under R.S. 22:1662(2)(b): the loss does not exceed $2,000 and the employee works for the insurer. If the insurer instead assigned the claim to an independent contractor, (2)(b) would not apply, because that exemption covers only individuals employed by an insurer.
Scenario 2: The engineer who starts negotiating
An engineer hired by a licensed field adjuster measures foundation movement after a hurricane and writes a technical report. That is technical assistance under R.S. 22:1662(3). If the engineer then tells the owner what the insurer will pay and presses for a settlement, the engineer is doing adjusting work the exemption does not cover.
Scenario 3: The agency's undisputed glass claim
A property and casualty producer processes an uncontested $600 glass claim under a policy the agency issued for the insurer, which is exempt under R.S. 22:1662(4). Once the insured disputes the amount, the claim is no longer "undisputed or uncontested," and the exemption no longer fits.
Scenario 4: The firm with unlicensed trainees
An adjusting LLC holds a business entity license and has a licensed responsible adjuster. It sends two unlicensed trainees out alone to settle disputed roof claims. The entity license does not cover them. R.S. 22:1665(C) lets only licensed individual adjusters exercise the entity's license, and R.S. 22:1663(A) bars the trainees from acting as adjusters.
Quick Review Checklist
- Know all nine R.S. 22:1661 definitions, especially adjuster, home state and person.
- Remember the $2,000 first-party threshold in R.S. 22:1662(2)(b) and that it covers only an insurer's own employees.
- Distinguish technical assistance (exempt) from negotiating a claim (licensed activity).
- A business entity license never replaces the individual licenses of the people who adjust.
Under La. R.S. 22:1662, which person is exempt from the Louisiana Claims Adjuster Act?
What must the commissioner find before approving a business entity's claims adjuster license under R.S. 22:1663(B)?
An adjuster lives in one state and works from another, and neither state has a substantially similar adjuster licensing law. Under R.S. 22:1661(4), what may the adjuster do?
Which statement about the Louisiana claims adjuster license requirement is correct?