Texas Public Insurance Adjuster Bonds
What is a Texas Public Insurance Adjuster Bond?
Texas Public Insurance Adjusters must post a surety bond in the amount of $10,000 as required by the Texas Department of Insurance, Financial Regulation Division, Agent and Adjuster Licensing Office. The surety bond is required to legally engage in the business as a Public Insurance Adjuster in the state. The adjuster surety bond is mandated for all persons in Texas who act on behalf of an insured, another Public Insurance Adjuster, or a person who advertises, solicits business, investigates, settles, adjusts, advises or assists an insured with the settlement of an insurance claim for losses or damage under a policy covering real or personal property for direct, indirect, or other compensation. Those or who publicly negotiate for, or effect the settlement of a claim for loss or damage under any insurance policy covering real or personal property also meet the definition and are subject to the surety bond requirement.
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Why is a Texas Public Adjuster Bond Required?
The bond ensures the public adjuster will comply with the Texas Administrative Code, Chapter 4102 and conduct business in an ethical manner, discharging losses that result from final judgments recovered against the principal by any customer.
This surety bond remains in full force and effect until its canceled without requiring a continuation or renewal certificates. The surety company may terminate this surety bond by submitting thirty days advance written notice to the Texas Department of Insurance. The surety company remains liable for any actions or defaults under this bond committed prior to the termination date but the aggregate liability of the surety company for any or all damages to all claimants is limited to the bond limit or penal sum of the surety bond.
Public Adjuster Bonds And Getting Your Texas Business License/Registration
The Public Insurance Adjuster Law (SB127 of the 78th Legislative Session) became effective June 11, 2003. Article 21.07-5 Section 3 (a) requires that: "A person may not act as a public insurance adjuster in this state or hold himself or herself out to be a public insurance adjuster in this state, unless the person holds a license or certificate issued by the commissioner under Section 5, 15, or 16 of this article."
Following are the key steps to securing your Texas Public Insurance Adjuster License;
- Take the Examination. Get information about testing, license applications and examination scheduling by contacting Pearson VUE toll free at (888) 754-7667. No provision in the Texas statute that allows Public Insurance Adjuster (PIA) to qualify for a license by taking a pre-license course.
- Furnish a $10,000 Public Adjuster Bond (FIN509)
- Review the Texas Statutes governing Public Adjusters - Senate Bill 127 along with the rules and regulations.
General Rules Governing Licensed Public Adjuster Business Conduct in Texas
- The role of public insurance adjusters is to charge fees to insureds to assist in negotiating claim settlements with insurance companies.
- The public insurance adjuster fee is typically a percentage of the claim settlement and is paid out of settlement funds received from an insurer. The public insurance adjuster is entitled only to reasonable compensation for time and expenses when a claim is settled within seventy two hours of the date the loss is reported to the insurance company.
- The public insurance adjuster's fee may not exceed 10 percent of a claim settlement and must be disclosed in the public insurance adjuster's written contract.
- Public insurance adjusters are not permitted to provide legal advice.
- Public insurance adjusters are not permitted to participate in the repair or reconstruction of damaged property that is also the subject of a claim being adjusted by the public insurance adjuster.
The Texas Department of Insurance, Agent and Adjuster Licensing Office (AAL) is responsible for the licensing, registration, certification and regulation of those authorized to sell insurance or adjust property and casualty claims in the state of Texas. This includes, but is not limited to public insurance adjusters, insurance agents, insurance adjusters, risk managers, life insurance counselors, reinsurance intermediaries, navigators, discount healthcare operators, title agents, escrow officers, and small employer health benefit plans.