| (a) A public insurance adjuster may not, directly or
indirectly, act within this state as a public insurance adjuster without
having first entered into a written contract executed in duplicate
by the licensee and the insured or the insured's duly authorized representative.
(b) A public insurance adjuster's written contract
with an insured must contain:
(1) the name, address, and license number of the public
insurance adjuster negotiating the contract and, if applicable, the
name, address, and license number of the public insurance adjuster's
employing public insurance adjuster, with each page of the contract
prominently displaying the license number(s);
(2) the public insurance adjuster's telephone and fax
number, including area code;
(3) the mailing and physical addresses to which notice
of cancellation and all communications to the public insurance adjuster
may be delivered;
(4) if any part of the contract or solicitation is
made via the Internet, the email and website address to which notice
of contract cancellation and all communications to the public insurance
adjuster may be delivered;
(5) the date and time the contract was signed;
(6) for each nonresident public insurance adjuster
named in the contract, the name and address of the nonresident public
insurance adjuster's agent for service of process;
(7) the following separate statements in 12-point bold
type on the signature page of the contract:
(A) "NOTICE: The insured may cancel this contract by
written notice to the public insurance adjuster within 72 hours of
signature for any reason.";
(B) "We represent the insured only."; and
(C) "You are entering into a service contract. You
are being charged a fee for this service. You do not have to enter
into this contract to make a claim for loss or damage on a policy
of insurance."
(8) the statement: "If the insurance carrier pays or
commits in writing to pay to the insured the policy limits of the
insurance policy under Insurance Code §862.053, concerning Fire
and Marine Insurance Companies, within 72 hours of the loss being
reported to the insurer, the public insurance adjuster is not entitled
to compensation based on a percentage of the insurance settlement,
but is entitled to reasonable compensation for the public insurance
adjuster's time and expenses provided to the insured before the claim
was paid or the written commitment to pay was received.";
(9) the statement: "NOTICE: A public insurance adjuster
may not participate directly or indirectly in the reconstruction,
repair, or restoration of damaged property that is the subject of
a claim adjusted by the public insurance adjuster or engage in any
other activities that may reasonably be construed as presenting a
conflict of interest, including soliciting or accepting any remuneration
from, or having a financial interest in, any salvage firm, repair
firm, or other firm that obtains business in connection with any claim
the public insurance adjuster has a contract or agreement to adjust.";
(10) on the first or second page of the contract, the
following English and Spanish notices in 10-point bold type:
(A) "IMPORTANT NOTICE: You may contact the Texas Department
of Insurance to get information about public insurance adjusters,
your rights as a consumer, or information about how to file a complaint
by calling 1-800-252-3439; or you may write the Texas Department of
Insurance, at MC: CO-CP, P.O. Box 12030, Austin, Texas 78711-2030.";
(B) "ADVISO IMPORTANTE: Puede communicarse con el Departamento
de Seguros de Texas para obtener informacion acera ajustadores publicos
de seguros, sus derechos como consumidor, o informacion sobre como
presenter una queja llamando 1-800-252-3439; o puede escribir al Departamento
de Seguros de Texas, en MC: CO-CP, P.O. Box 12030, Austin, Texas 78711-2030.";
(11) a statement that under any method of compensation,
the total commission payable to the public insurance adjuster, including
expenses, direct costs, or any other costs accrued by the public insurance
adjuster, must not exceed 10% of the amount of the insurance settlement;
(12) if applicable, a statement disclosing how payments
issued before the effective date of the contract will be used in determining
compensation to the public insurance adjuster; and
(13) a clear and prominent statement of the public
insurance adjuster's commission including:
(A) the method of calculating the commission for the
public insurance adjuster, whether an hourly rate, flat fee, percentage
of settlement, or another method of compensation, specifically:
(i) if an hourly rate, the contract must state the
hourly rate and how it will be applied to hours of service provided
by the public insurance adjuster to calculate the amount payable;
(ii) if a flat fee, the contract must state the amount
that will be payable to the public insurance adjuster;
(iii) if a percentage, the contract must state the
exact percentage that will be applied to the settlement on the claim
to calculate the amount payable to the public insurance adjuster;
or
(iv) if another method of calculation is chosen, the
contract must include a detailed explanation of how the amount payable
will be determined based on services provided by the public insurance
adjuster;
(B) a general description of services the public insurance
adjuster will provide under the contract;
(C) a description of the claim and property damage,
location, and event date;
(D) if based on an hourly rate, a provision that the
public insurance adjuster will provide an invoice for services that
includes a detailed listing of services provided and separate costs
payable to the public insurance adjuster as part of the commission
based on the claim settlement, including expenses, direct costs, and
any other accrued costs.
(c) The contract must not contain any terms or conditions
that have the effect of limiting or nullifying any requirements of
the Insurance Code, this subchapter, or other rules of the department.
(d) All public insurance adjusters in Texas must use
a written contract that is in the form prescribed by the department
and that complies with all relevant Insurance Code requirements and
department rules. Public insurance adjusters must select from the
following contract form options:
(1) a standard language contract developed by the department,
identified by FIN 535; or
(2) a contract filed and approved by the department
before use.
(e) All contracts must be submitted with an original
adjuster license application or an application for renewal to the
department's Agent and Adjuster Licensing Office. Contracts also must
be submitted to the office upon any modification or amendment of terms
or conditions between license renewals.
(f) The failure by a public insurance adjuster or other
individual to use a properly authorized and approved contract may
result in suspension, nonrenewal, revocation of the adjuster's license,
or other administrative penalty.
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