Quiz Time! Public Adjuster Compensation Question for NY Property Insurance Claims Professionals

You’ve just reached a $100K settlement with the named insured’s public adjuster on the building claim under a NY property insurance policy (homeowners, commercial property, etc.) and are about to cut checks.

The policy has a listed mortgagee, the mortgage balance is $100K, and the PA has provided a Regulation 10 (11 NYCRR § 23.13(d)) Direction to Pay Letter signed by your named insured, checking the first, one-check-payable-only-to-the-PA-for-their-10%-fee and one-check-for-the-balance-payable-to-the-NI-and-mortgagee option. The mortgagee has not signed either a PA compensation agreement or a Direction Pay Letter.

How many checks do you issue, in what amounts and to whom?

Answer A:
Two checks.
> One check for $90K to the NI and the mortgagee; and
> One check for $10K to the PA.

Answer B:
Two checks.
> One check for $90K to the NI and the mortgagee; and
> One check for $10K to the PA and the mortgagee.

Answer C:

One check for $100K payable to the NI, mortgagee and the PA.

What say you?  Record your answer in the comments.  I’ll then wait a week or so and provide the correct answer with its explanation.