Nevada’s Unfair Claims Practices Act (NRS 686A.310(2)) creates a private right of action against an “insurer” for violations of the act. Adjusters might believe that when Plaintiffs allege Unfair Claims Practice that they can point to the “insurer” as the only party who must answer for their violations.
However, independent adjusters would be mistaken in their belief.
Nevada Licensed Independent Adjusters are familiar with NRS Chapter 684A. That is the section of the law that details how Independent Adjusters are licensed and regulated. NRS 684A is called the Nevada Insurance Adjusters Law.
Tucked away in that Chapter is a little known provision that says:
NRS 684A.035 Applicability of other provisions of NRS.
1. The provisions of NRS 683A.341 and 686A.310 apply to adjusters and associate adjusters.
2. For the purposes of subsection 1, unless the context requires that a section apply only to producers of insurance or insurers, any reference in those sections to “producer of insurance” or “insurer” must be replaced by a reference to “adjuster or associate adjuster.”
In other words, where the Nevada Unfair Claims Practices Act is involved, the Nevada Legislature clearly intended to regulate many others besides the insurance underwriter. As it applies to the Nevada Unfair Claims Practices Act, the legislature intended to regulate independent adjusters and their associate adjusters as well.
Applying this adjuster regulatory statute to NRS 686A.310, the operative language found in subsection (2) of that law would read as follows:
2. In addition to any rights or remedies available to the Commissioner, [insurance adjuster or associate adjuster] is liable to its insured for any damages sustained by the insured as a result of the commission of any act set forth in subsection 1 as an unfair practice.
That broad scope of the regulatory scheme just makes sense. Adjusters are the people who deal every day with the folks who make the claims. Adjusters wield a lot of power when it comes to processing insurance claims. Adjusters are the ones who keep the claims moving forward timely. (NRS 686A.310(b)). Adjusters are often the only conduit for information between the underwriter and the insured regarding policy coverage information. (NRS 686A.310(a)). It is the adjusters that communicate to the insured claimant regarding why and how a claim is valued. (NRS 686A.310(n)). These and many other actions of the adjuster are critical to the claims handling process and are specifically addressed by the Nevada Unfair Claims Practices Act.
Our blog readers who are not independent adjusters but instead are employed by Nevada licensed insurance companies will be happy to know that I am skeptical as to whether they can be called to personally answer for violating the Nevada Unfair Claims Practices Act. However, it appears to me that the Nevada Insurance Adjusters Law makes Nevada Licensed Independent Insurance Adjusters targets when Plaintiffs’ attorneys draft complaints that allege Unfair Claims Practices violations.