In this subtitle the following words have the meanings indicated. “Business entity” has the meaning stated in § 10–101 of this title. “Home state” means: the state where a public adjuster’s principal place of residence or principal place of business is located; or the state a public adjuster designates under § 10–409(a)(2) of this subtitle. “Immediate family member” means a public adjuster’s: spouse; child; child’s spouse; parent; spouse’s parent; sibling; or sibling’s spouse. “License” means a license issued by the Commissioner to act as a public adjuster. “Marketing” means the distribution of advertising materials regarding the services of a public adjuster. “Public adjuster” means a person who for compensation or any other thing of value: acts or aids, solely in relation to first–party claims arising under an insurance policy that insures the real or personal property of the insured, on behalf of the insured in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance policy; except as provided in § 10–403 of this subtitle, directly or indirectly solicits for employment as a public adjuster of insurance claims, solicits business, or represents oneself to the public as a public adjuster of first–party insurance claims for losses or damages arising out of insurance policies that insure real or personal property; or investigates or adjusts losses, or advises an insured about first–party claims for losses or damages arising out of an insurance policy that insures real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy, for the insured. “Public adjuster” does not include a person that investigates, adjusts, or appraises claims for loss or damage covered by a motor vehicle insurance policy.

This subtitle does not apply to: an adjuster for or an insurance producer or employee of an insurer or group of insurers under common control or ownership that, as representative of the insurer or group, adjusts losses or damages under policies issued by the insurer or group; an insurance producer that acts as an adjuster without compensation for an insured for whom the insurance producer is acting as an insurance producer; an attorney at law who does not: regularly act as a public adjuster; and represent to the public by sign, advertisement, or otherwise that the attorney at law acts as a public adjuster; a person who negotiates or settles claims arising under: a life, health, or motor vehicle insurance policy; or an annuity contract; a person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to a public adjuster, including a photographer, an estimator, a private investigator, an engineer, and a handwriting expert; a licensed health care provider, or an employee of a licensed health care provider, who prepares or files a health claim form on behalf of a patient; or a person who settles subrogation claims between insurers.

Except as otherwise provided in this subtitle or §§ 10–14A–03 and 10–14B–03 of the State Government Article, a person must obtain a license before the person acts as a public adjuster in the State. Marketing on behalf of a public adjuster, as defined in §�10–401 of this subtitle, does not require a license. A person that violates this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500 or imprisonment not exceeding 6 months or both for each violation.

To qualify for a license, an applicant must be: an individual who meets the requirements of subsection (b) of this section; or a business entity that meets the requirements of subsection (c) of this section. An individual applicant must be trustworthy and competent to transact business as a public adjuster so as to safeguard the interests of the public. Except as otherwise provided in this subsection, an individual applicant shall: pass a written examination given by the Commissioner under this subtitle in order to determine the competency of the applicant to act as a public adjuster; and pay the license fee required by § 2–112 of this article. The examination requirement of paragraph (2) of this subsection does not apply to an individual who was licensed as a public adjuster in the State on June 30, 1985. An individual applicant who fails an examination may not take another examination until at least 14 days after the date of the last examination that the applicant failed. A business entity applicant must: be trustworthy and competent to transact business as a public adjuster so as to safeguard the interests of the public; employ one or more individual licensed public adjusters; and pay the applicable license fee required by § 2–112 of this article.

An applicant for an initial license shall file with the Commissioner an application on the form that the Commissioner provides. The application form shall require: the name and address of the applicant; whether any other insurance license or certificate has been issued to the applicant; for a business entity applicant: the name of the individual licensed public adjuster employed by the business entity who is designated to act as the business entity’s principal contact with the Administration; and the name and address of each licensed public adjuster employed by the business entity, each individual who has direct control over its fiscal management, each owner, partner, member, or manager of the business entity, and each director of a business entity that is a corporation; and any other information that the Commissioner requires of applicants to enable the Commissioner to determine the trustworthiness and competence of the applicant to transact business as a public adjuster so as to safeguard the interests of the public. An application shall be signed under oath: in the case of an individual applicant, by the applicant; or in the case of an applicant that is a business entity, by an individual who has direct control over its fiscal management, an owner, partner, member, or manager of the business entity, or a director of a business entity that is a corporation.

The Commissioner shall issue a license to each applicant who meets the requirements of this subtitle.

The Commissioner may adopt regulations that specify: the scope, type, conduct, and grading of the written examination; and the frequency, times, and locations within the State where the written examination will be held.

A license expires every other year on the date stated on the license unless renewed as provided in this section. At least 1 month before a license expires, the Commissioner shall send to the holder of the license, at the last known address or e–mail address of the holder on record a notice that states: the process for renewing the license; the date by which the Commissioner must receive the renewal application for the renewal to be issued and mailed before the license expires; and the amount of the renewal fee. Before a license expires, the holder of the license may renew it for an additional 2–year term, if the holder: otherwise is entitled to a license; files with the Commissioner a renewal application: on the form that the Commissioner provides; or in an electronic format that the Commissioner approves; completes the continuing education requirements under subsection (e) of this section; and pays to the Commissioner the renewal fee required by § 2–112 of this article. A license renewed under this section for an individual shall have an expiration date that is the last day of the month in which the license holder was born. The Commissioner shall require a public adjuster who is not a business entity to receive continuing education as a condition of renewing a license of the public adjuster. A public adjuster shall complete the continuing education required under paragraph (1) of this subsection not later than 30 days before the expiration date of the public adjuster’s license. The public adjuster shall successfully complete 24 credit hours of approved continuing education for each 2–year license period as a condition for license renewal unless the Commissioner modifies the requirement by regulation. Of the required hours of continuing education required for a renewal period under paragraph (3) of this subsection, at least 3 hours shall relate directly to ethics. The Commissioner may grant a waiver to a public adjuster who has requested a waiver for reasons that the Commissioner determines warrant the waiver. This subsection may not apply to a holder of a license who has not been licensed for 1 full year before the end of the applicable continuing education period. A nonresident license holder shall be deemed to have met the continuing education requirements of this section if: the nonresident license holder satisfies the continuing education requirements of the home state of the nonresident license holder; and the home state of the nonresident license holder allows a public adjuster who is a resident of this State to satisfy the continuing education requirements of the home state on the same basis by meeting the continuing education requirements of this State. If mailed, an application for renewal of a license shall be considered made in a timely manner if it is postmarked on or before the expiration date of the license. If submitted electronically, an application for renewal shall be considered made in a timely manner if, on or before the expiration date of the license, the application: is addressed properly or otherwise directed properly to an information processing system that the Administration has designated or uses for the purpose of receiving electronic applications and from which the Administration is able to retrieve the application; is in a form capable of being processed by that system; and enters an information processing system outside the control of the sender or of a person that sent the electronic application on behalf of the sender; or enters a region of the information processing system designated or used by the Administration that is under the control of the Administration or an agent of the Administration. The Commissioner shall renew the license of each holder who meets the requirements of this section. If the holder of a license files an application for renewal before the license expires, the license shall remain in effect until: the Commissioner issues a renewal license; or 5 days after the Commissioner refuses in writing to renew the license and serves notice of the refusal on the holder. The Commissioner may adopt regulations to carry out this section.

For up to 1 year after the expiration date, a person whose public adjuster’s license has expired may reinstate the expired license by: filing with the Commissioner the appropriate reinstatement application; paying to the Commissioner the applicable reinstatement fee required under subsection (b) of this section; and submitting proof of completion of the continuing education requirements in § 10–408 of this subtitle. The fee for a reinstatement under this section shall be: the amount charged for a full renewal period for the type of license held by the person seeking the reinstatement; and a reinstatement fee of $100. The Commissioner may limit the reinstatement fee to the amount of the renewal fee in cases where the reinstatement applicant did not make timely renewal because of service in the uniformed services, temporary incapacity, hospitalization, or other hardship. A person whose public adjuster’s license has expired is prohibited from acting as a public adjuster until the effective date of reinstatement of the license. If a person applies for reinstatement of an expired license within 60 days after the license expired, the Commissioner shall reinstate the license retroactively, with the reinstatement effective on the date that the person’s license expired. If a person applies for reinstatement of an expired license more than 60 days after the license expired, the Commissioner shall reinstate the person’s license prospectively, with the reinstatement effective on the date that the license is reinstated. A person who does not comply with subsection (a) of this section on or before 1 year after the expiration date shall apply for a license under § 10–405 of this subtitle and meet the requirements specified by the Commissioner in regulation. The Commissioner may adopt regulations to carry out this section.

Except as otherwise provided in this section, the Commissioner shall waive the license requirements for an applicant who is not a resident of the State if: the applicant has a valid public adjuster license from the home state of the applicant; and the home state of the applicant awards nonresident public adjuster licenses to residents of the State on the same basis. If neither the state where the public adjuster maintains a principal place of residence nor the state where the public adjuster maintains a principal place of business has a law governing public adjusters substantially similar to this subtitle, the public adjuster may declare another state where the public adjuster is licensed and acts as a public adjuster to be the public adjuster’s home state for purposes of this subtitle. Unless denied a license under § 10–410 of this subtitle, a person who is not a resident of the State may obtain a nonresident license to act as a public adjuster if: the person currently is licensed as a resident public adjuster and in good standing in the person’s home state; the person files an application on the form that the Commissioner provides; the person has paid the applicable fee pursuant to § 2–112 of this article; and the person’s home state awards nonresident public adjuster licenses to residents of this State on the same basis. A person who is not a resident of this State and whose home state does not issue a public adjuster license must meet the license requirements of §§ 10–404 and 10–405 of this subtitle.

Except as otherwise expressly provided by law, a person may not pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, any valuable consideration to an insured as an inducement to use the services of a public adjuster. A public adjuster may pay a commission, service fee, or any other valuable consideration to a person only if that person is required to be licensed, and is licensed, as a public adjuster. A person may not accept a commission, service fee, or any other valuable consideration if the person is required to be licensed, but is not licensed, as a public adjuster.

The Commissioner may deny a license to an applicant or suspend, revoke, or refuse to renew or reinstate a license after notice and opportunity for a hearing under §§ 2–210 through 2–214 of this article if the applicant or licensee: has violated this article; has made a material misstatement in the application for the license; has engaged in fraudulent or dishonest practices; has demonstrated incompetency or untrustworthiness to act as a public adjuster; has misappropriated, converted, or unlawfully withheld money that belongs to an insurer, insurance producer, insured, or other person; has willfully and materially misrepresented the provisions of a policy; has been convicted of a felony, a crime of moral turpitude, or any criminal offense involving dishonesty or breach of trust; has willfully failed to comply with or has willfully violated a proper order or regulation of the Commissioner; has failed or refused to pay on demand money that belongs to an insurer, insurance producer, insured, or other person entitled to the money; is not carrying on or does not intend to carry on business in good faith while representing to the public that the person is a public adjuster; has been denied a license or has had a license suspended or revoked in another state; or has knowingly employed or knowingly continued to employ an individual acting in a fiduciary capacity who has been convicted within the preceding 10 years of a felony or crime of moral turpitude. The Commissioner may deny a license to a business entity applicant or suspend, revoke, or refuse to renew or reinstate the license of a business entity after notice and opportunity for a hearing under §§ 2–210 through 2–214 of this article, if an individual listed in paragraph (2) of this subsection: violates any provision of this article; is convicted of a felony, a crime of moral turpitude, or any criminal offense involving dishonesty or breach of trust; or has any professional license suspended or revoked for a fraudulent or dishonest practice. The sanctions provided for under this subsection may be imposed on a business entity if the violation was committed by an individual who: is a public adjuster employed by the business entity; in the case of a limited liability company, is an officer, director, member, or manager; in the case of a partnership, is a partner; and in the case of a corporation, is a director, officer, or controlling owner; or has direct control over the fiscal management of the business entity. Instead of or in addition to suspending or revoking the license of a public adjuster, the Commissioner may impose on the licensee a penalty of not less than $100 but not exceeding $5,000 for each violation of this article. Instead of or in addition to suspending or revoking the license, the Commissioner may require that restitution be made to any citizen who has suffered financial injury because of the violation of this article. If the license is suspended under this section, the Commissioner may require the individual to pass an examination and file a new application before the suspension is lifted.

A contract for public adjuster services shall: be in writing; be titled “Public Adjuster Contract”; and contain the following: the legible full name of the public adjuster signing the contract, as specified in the records of the Administration; the permanent business address and phone number of the public adjuster in the public adjuster’s home state; the license number issued by the Administration to the public adjuster; the insured’s full name, street address, insurance company name, and policy number, if known or on notification; a description of the loss and the location of the loss, if applicable; a description of services to be provided to the insured; the signatures of the public adjuster and the insured; the dates when the contract was signed by the public adjuster and the insured, respectively; notification to the insured that: the public adjuster may incur out–of–pocket expenses on behalf of the insured; and these expenses incurred by the public adjuster and approved by the insured will be reimbursed to the public adjuster from the insurance proceeds; and the full salary, fee, commission, compensation, or other consideration the public adjuster is to receive for services. The public adjuster contract may specify that the public adjuster be named as a co–payee on an insurer’s payment of a claim. If the compensation is based on a share of the insurance settlement, the public adjuster contract shall specify the exact percentage to be paid. A compensation provision in a public adjuster contract may not be redacted in any copy of the contract provided to the Commissioner. A redaction of a compensation provision constitutes an omission of material fact in violation of this subtitle. If the insurer, within 72 hours after the time the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster: may not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim; shall inform the insured that loss recovery amount might not be increased by the insurer; and may be entitled only to reasonable compensation from the insured for services the public adjuster provides on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer. A public adjuster shall provide to the insured a written disclosure signed by the public adjuster and the insured concerning any direct or indirect financial interest that the public adjuster or any immediate family member of the public adjuster has with any other party that is involved in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured. The disclosure shall include any ownership of, or any compensation expected to be received from, any construction firm, salvage firm, building appraisal firm, motor vehicle repair shop, or any other firm that provides estimates for work, or that performs any work, in conjunction with damages caused by the insured loss on which the public adjuster is engaged. A public adjuster contract may not contain any provision that: allows the public adjuster’s percentage fee to be collected when money is due from, but not yet paid by, an insurance company; allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as a percentage of each check issued by an insurance company; requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster; or precludes either party from pursuing any civil remedy. Before the signing of the public adjuster contract, the public adjuster shall provide the insured with a separate disclosure document signed by the insured regarding the claim process that substantially states: “(1)    Property insurance policies obligate the insured to present a claim to the insurance company for consideration. There are three types of adjusters that could be involved in that process. The definitions of the three types are: “Company adjuster” means an insurance adjuster who is an employee of an insurance company. A company adjuster represents the interest of the insurance company and is paid by the insurance company. A company adjuster will not charge you a fee. “Independent adjuster” means an insurance adjuster who is hired on a contractual basis by an insurance company to represent the insurance company’s interest in the settlement of the claim. An independent adjuster is paid by your insurance company. An independent adjuster will not charge you a fee. “Public adjuster” means an insurance adjuster who does not work for any insurance company. A public adjuster works for the insured to assist in the preparation, presentation, and settlement of a claim. The insured hires a public adjuster by signing a contract agreeing to pay the public adjuster a fee or commission based on a percentage of the settlement, or another method of compensation. The insured is not required to hire a public adjuster to help the insured meet the insured’s obligations under the policy but has the right to do so. The insured has the right to initiate direct communications with the insured’s attorney, the insurer, the insurer’s adjuster, the insurer’s attorney, or any other person regarding the settlement of the insured’s claim. A public adjuster is not a representative or an employee of the insurer. The salary, fee, commission, or other consideration of a public adjuster is the obligation of the insured, not the insurer.”. The public adjuster contract shall be executed in duplicate to provide an original contract to the public adjuster and an original contract to the insured. The public adjuster’s original contract shall be available at all times for inspection without notice by the Commissioner. A contract with an electronic signature shall constitute an original contract. The public adjuster contract shall contain a statement that: the insured has the right to rescind or cancel the contract within 10 business days after the date the contract was signed; the notice of rescission or cancellation shall be in writing and mailed or delivered to the public adjuster at the address stated in the contract within the time period specified in item (1) of this subsection; if the insured exercises the right to rescind or cancel the contract, the public adjuster shall, within 15 business days after the public adjuster receives the notice, return anything of value given by the insured under the contract; and provides a notice to the insured that a public adjuster, or anyone acting on behalf of a public adjuster, may not solicit or attempt to solicit a client between the hours of 8:00 p.m. and 8:00 a.m. The public adjuster shall give the insured written notice of the insured’s rights under the Maryland Consumer Protection Act.

A public adjuster who receives, accepts, or holds any funds on behalf of an insured toward the settlement of a claim for loss or damage shall deposit the funds in a noninterest–bearing escrow or trust account in a financial institution that is federally insured in the public adjuster’s home state or where the loss occurred.

A public adjuster shall maintain a complete record of each transaction entered into as a public adjuster. The records required by this section shall include: the name of the insured; the date, location, and amount of the loss; a copy of the contract between the public adjuster and the insured; the name of the insurer and the amount, expiration date, and number of each policy carried with respect to the loss; an itemized statement of the insured’s recoveries; an itemized statement of all compensation received by the public adjuster, from any source, in connection with the loss; a register of all money received, deposited, disbursed, or withdrawn in connection with a transaction with an insured, including: fees, transfers, and disbursements from a trust account; and all transactions concerning all interest–bearing accounts; the name of the public adjuster who executed the public adjuster contract; the name of the attorney representing the insured, if applicable; and the name of the claims representative of the insurance company. The records shall be: maintained for at least 5 years after the termination of the transaction with an insured; and open to examination by the Commissioner at all times. Any records required to be maintained under this section may be stored in an electronic format. Records submitted to the Commissioner in accordance with this section that contain information that the public adjuster identifies in writing as proprietary: shall be treated as confidential by the Commissioner; and may not be subject to Title 4, Subtitle 2 of the General Provisions Article.

A public adjuster is obligated to: serve with objectivity and complete loyalty the interest of the client alone; render to the insured the information, counsel, and service that will best serve the insured’s insurance claim needs and interests, within the knowledge, understanding, and opinion in good faith of the public adjuster; and disburse insurance settlement payments received on behalf of the insured within 15 business days after the date of the payment from an insurer. A public adjuster may not allow an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this subtitle. Unless full written disclosure has been made to the insured in accordance with § 10–411 of this subtitle, a public adjuster may not have a direct or indirect financial interest in any aspect of a claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured. A public adjuster may not acquire any interest in salvage of property subject to a public adjuster contract with the insured unless the public adjuster obtains written permission from the insured. A public adjuster, or anyone acting on behalf of a public adjuster, may not solicit or attempt to solicit a client between the hours of 8:00 p.m. and 8:00 a.m. A public adjuster who enters into a public adjuster contract during, or within 72 hours after, the loss giving rise to an insurance claim shall provide notice to the Commissioner that the public adjuster has entered into the contract. The notice required under paragraph (1) of this subsection shall be: provided to the Commissioner within 1 business day after the public adjuster enters into the contract; and in a form and manner the Commissioner determines.

A public adjuster shall adhere to the following general ethical requirements: a public adjuster may not undertake the adjustment of any claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage, or that otherwise exceeds the public adjuster’s current expertise; a public adjuster may not make a statement that the public adjuster knows to be false or with reckless disregard as to the statement’s truth or falsity concerning the qualifications or integrity of any person engaged in the business of insurance to any insured client or potential insured client; a public adjuster may not represent or act as a company adjuster or as an independent adjuster on the same claim; the public adjuster contract may not be construed to prevent an insured from pursuing any civil remedy after the rescission or cancellation period under § 10–411(h) of this subtitle; and a public adjuster may not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall perform repair work. A public adjuster may not agree to any loss settlement without the insured’s knowledge and consent.

A public adjuster shall report to the Commissioner, within 30 days after the final disposition of the matter, any administrative action taken against the public adjuster in another jurisdiction, or by another governmental unit in the State. The report shall include: a copy of any order; any consent to an order; and any other relevant legal documents. Within 30 days after the initial pretrial hearing date, a public adjuster shall report to the Commissioner any criminal prosecution of the public adjuster undertaken in any jurisdiction. The report shall include: a copy of the initial filed complaint; any order resulting from the hearing; and any other relevant legal documents.