Should Independent and Public Adjusting Firms Be Subject to Market Conduct Studies?

Is there any downside to departments of insurance making independent and public adjusting firms subject to market conduct studies? While market conduct studies, also called market conduct examinations, are common regarding insurance companies, why shouldn’t there be regular market conduct studies of the adjusting organizations?

From the policyholder’s perspective, I would hope that it would lead to greater consumer protection. Unfair methods of adjustment by either group would be uncovered. Indeed, just the concern that independent examiners would review their adjustment practices should lead to better adjustment practices that adhere to good faith and legal practices.

Is there a downside from the policyholder’s perspective for departments of insurance to conduct regular examinations of these adjusting entities? Do any independent or public adjusters think that having their files critically examined is bad for policyholders, and why?

I wrote a lot about market conduct studies over the past week, and for those interested, I would suggest you start with What Is a Market Conduct Study.

Thought For The Day

The consumer, so it is said, is the king… but is he a king who is being treated in royal fashion? For the consumer’s kingdom is largely a kingdom of illusion.

—Franklin D. Roosevelt