In filing with regulators, Florida citizens want appraisers to be licensed adjusters
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Citizens Property Insurance Corp. weighed in on an issue that could upend the appraisal process in insurance claims litigation in Florida, urging state regulators to require appraisers to be licensed adjusters.
In a motion to intervene in a motion filed with the Florida Department of Financial Services, the state’s largest property insurer said a decision that appraisers need not be adjusters would have a “perverse and unforeseen outcome” and could potentially impact premiums and valuations. paid by Florida policyholders.
Controversy erupted in January in the case of an infamous adjuster and property appraiser who Citizens and other insurers say had repeatedly blocked company adjusters from accessing the property and even threatened with violence at least one claims adjuster from an insurer. An administrative law judge has recommended that Scott David Thomas’ adjuster’s license be suspended for two years and that he pay a $5,000 fine.
DFS officials can accept the judge’s decision or go further and revoke his expert license altogether. Thomas can appeal the decision to a Florida court of appeals.
In its recommendation to the Administrative Law Judge, DFS noted that “because the work of an appraiser falls within the statutory definition of ‘public expert’, an appraiser is subject to the requirements of the Florida Insurance Code” and the Code of Ethics from the expert.
This has raised concerns for appraiser associations and the Windstorm Insurance Network, which offers training courses for appraisers. The network, known as WIND, along with the Insurance Appraisal and Umpire Association and the Property Loss Appraisal Network, filed a petition Feb. 23 with DFS, seeking clarification on the matter.
Appraisers are widely used to help settle the value of damages in claims disputes. But requiring them to be licensed adjusters could lead to a shortage of appraisers in Florida, said WIND, the associations and some insurance attorneys. Many appraisers are considered experts in their field, such as engineering, but may not want to take the time to become licensed adjusters, appraiser associations have said.
Citizens disagrees and noted in its motion that without the licensing requirement, troublemakers like Thomas could continue to serve as appraisers, which could lead to inappropriate appraisals and higher costs for insurers.
“It would be the natural consequence of granting the relief sought by the petitioners despite the fact that much of the problematic conduct that led to the administrative complaint against Mr. Thomas involved his actions in an assessment proceeding, including an assessment procedure involving citizen policyholders,” said the insurer’s motion reads.
State law appears to require appraisers to be licensed, Senior Citizens Advocate Russell Kent wrote in the petition.
Citizens, created by the Florida legislature in 2002 as an insurer of last resort, has a “special interest” in the matter. Kent’s motion noted that a DFS ruling that avoids a license requirement would have a significant impact on Citizens, which participated in 4,605 assessment proceedings in 2022 and has already been party to 3,471 in the first months of 2023.
“Citizens’ situation is unique among insurers in Florida,” the motion explains. “Consequently, the Citizen respectfully asks the Ministry to allow him to intervene in this declaratory declaration procedure.
The filing pointed out that licensed attorneys are exempt from adjuster licensing requirements and could serve as appraisers.
DFS has until the end of May to decide on the matter.
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