HB 1972 — An Act amending the act of December 20, 1983 (P.L.260, No.72), referred to as the Public Adjuster Licensing Law, further providing for definitions, for license, for written disclosure of financial interest and for bond; providing for fees, for requirements and prohibitions and for separate pre-contract disclosure; and further providing for contract and for revocation, etc., of license.

PRINTER'S NO.     2487

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1972
                                                Session of
                                                  2025

     INTRODUCED BY MERSKI, OLSOMMER, PICKETT, SANCHEZ, K.HARRIS,
        HILL-EVANS, NEILSON, CIRESI AND D. WILLIAMS, OCTOBER 20, 2025

     REFERRED TO COMMITTEE ON INSURANCE, OCTOBER 20, 2025


                                    AN ACT
 1   Amending the act of December 20, 1983 (P.L.260, No.72), entitled
 2      "An act providing for the licensing and regulating of public
 3      adjusters and public adjuster solicitors," further providing
 4      for definitions, for license, for written disclosure of
 5      financial interest and for bond; providing for fees, for
 6      requirements and prohibitions and for separate pre-contract
 7      disclosure; and further providing for contract and for
 8      revocation, etc., of license.
 9      The General Assembly of the Commonwealth of Pennsylvania
10   hereby enacts as follows:
11      Section 1.    The definition of "public adjuster" in section 1
12   of the act of December 20, 1983 (P.L.260, No.72), referred to as
13   the Public Adjuster Licensing Law, is amended and the section is
14   amended by adding definitions to read:
15   Section 1.   Definitions.
16      The following words and phrases when used in this act shall
17   have the meanings given to them in this section unless the
18   context clearly indicates otherwise:
19      * * *
20      "Catastrophic claim settlement."     A settlement for a claim
21   arising from a major disaster as declared by the President of
 1   the United States or a disaster emergency proclaimed by the
 2   Governor under 35 Pa.C.S. § 7301 (relating to general authority
 3   of Governor).
 4      * * *
 5      "Negotiate."   To confer directly with or to offer advice
 6   directly to a purchaser or prospective purchaser of a particular
 7   contract for public adjuster services concerning the substantive
 8   benefits, terms or conditions of the contract.
 9      * * *
10      "Public adjuster."   Any person advertising, soliciting
11   business or holding himself out to the public as an adjuster of
12   claims, excluding claims for personal or commercial auto lines
13   of insurance, for losses or damages arising out of policies of
14   insurance, surety or indemnity upon property, persons or
15   insurable business interests within this Commonwealth, and
16   receiving any compensation or reward for the giving of advice or
17   assistance to the insured in the adjustment of claims for such
18   losses, or who for compensation or reward, whether by way of
19   salary or commission or otherwise, directly or indirectly,
20   solicits business, investigates or adjusts losses or advises the
21   insured with reference to claims for losses on behalf of any
22   other person engaged in the business of adjusting losses. The
23   term does not include an agent or employee of an insurance
24   company, association or an exchange, through whom a policy of
25   insurance was written, in adjusting loss or damage under such
26   policy, nor does it include an insurance producer acting as an
27   adjuster if the services of the insurance producer in the
28   adjustment are without compensation.
29      "Relative."    A spouse, parent, child, stepparent, stepchild,
30   grandparent, grandchild, brother, sister, half brother, half

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 1   sister, aunt, uncle, niece, nephew or first or second cousin.
 2      * * *
 3      "Sell."     To exchange a contract by any means for money or
 4   anything of value.
 5      "Solicit."     To attempt to sell, ask or urge a person to
 6   obtain public adjuster services.
 7      Section 2.     Sections 2(a) and (d), 3.1 and 4 of the act are
 8   amended to read:
 9   Section 2.   License.
10      (a)   License required.--No person or entity shall represent
11   as or advertise to be a public adjuster, sell, solicit or
12   negotiate a contract for public adjusting services or, directly
13   or indirectly, act within the Commonwealth as a public adjuster
14   without first procuring from the Insurance Commissioner a
15   license as a public adjuster.
16      * * *
17      (d)   License not to be issued to certain persons.--No license
18   as a public adjuster shall be issued to any person engaged or
19   interested in, or receiving any profit from, nor shall the
20   holder of any such license engage or be interested in, or
21   receive any profit from, any salvage, repair, replacement,
22   restoration, renovation or demolition of damaged property, real
23   or personal, or similar business.
24   Section 3.1.    [Written disclosure] Prohibition of financial
25                interest.
26      (a)   Requirement.--A public adjuster [shall provide the
27   insured a written disclosure concerning], or any of the public
28   adjuster's employees, relatives or affiliates, may not have a
29   direct or indirect financial interest [the public adjuster has
30   with another party involved in an] in any aspect of the claim

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 1   being adjusted, other than the salary, fee, commission or other
 2   consideration established in the written contract with the
 3   insured[, including ownership of or compensation expected to be
 4   received from a construction firm, building appraisal firm,
 5   motor vehicle repair shop or another firm that provides
 6   estimates for work or that performs work in conjunction with
 7   damages caused by the insured loss on which the public adjuster
 8   is engaged].
 9      (a.1)     Referrals.--The public adjuster, or any of the public
10   adjuster's employees, relatives or affiliates, may not refer or
11   direct an insured to get needed repairs or services in
12   connection with a loss from any person:
13            (1)   with whom the public adjuster or any of the public
14      adjuster's employees, relatives or affiliates has a financial
15      interest; or
16            (2)   from whom the public adjuster or any of the public
17      adjuster's employees, relatives or affiliates may receive
18      direct or indirect compensation for the referral.
19      (b)   Definition.--As used in this section, the term "firm"
20   shall include a corporation, partnership, association, joint-
21   stock company or person.
22   Section 4.     Bond.
23      (a)   Public adjuster's bond.--Each person receiving a public
24   adjuster's license shall, before issuance and renewal of a
25   license or transacting any business thereunder, execute and
26   deliver to the Insurance Commissioner a bond in the minimum
27   penal sum of [$20,000] $40,000 with such sureties as the
28   Insurance Commissioner may approve[.] and shall provide proof of
29   the bond to the Insurance Commissioner.
30      (a.1)     Termination or replacement of public adjuster bond.--

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 1   The issuer of a bond issued to a public adjuster shall not
 2   terminate or replace the bond unless written notice is filed
 3   with the Insurance Commissioner and given to the licensee no
 4   less than 30 days prior to the termination or replacement of the
 5   bond.
 6      (b)   (Reserved).
 7      (c)   Condition of bond.--The bond of the public adjuster
 8   shall be conditioned that said public adjuster will faithfully
 9   comply with all the requirements of this act and shall not
10   embezzle, take, secrete or otherwise dispose of or fraudulently
11   withhold, appropriate, lend, invest or otherwise use or apply
12   any money or substitutes for money or any salvage, goods or
13   property received by him as such public adjuster or employee of
14   a public adjuster[, contrary to the instructions or without the
15   consent of the assured or his legal representative]. Any person,
16   firm or corporation who has entered into a contract with a
17   public adjuster, as provided in section 5, and who shall suffer
18   loss by reason of the failure of the public adjuster to comply
19   with this act and faithfully perform his duties shall have the
20   right to intervene and be made a party to any action instituted
21   by the Commonwealth on the bond of the public adjuster and to
22   have his, her or its rights and claims adjudicated in such
23   action and judgment rendered thereon, subject, however, to the
24   priority of the claim and judgment of the Commonwealth. If the
25   amount of the liability of the surety on said bond is sufficient
26   to pay the full amount due the Commonwealth, the remainder shall
27   be distributed pro rata among said intervenors. If no suit
28   should be brought by the Commonwealth of Pennsylvania, upon
29   application therefore and furnishing affidavit to the department
30   that loss has been suffered by reason of failure of the public

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 1   adjuster to comply with this act or faithfully perform his
 2   duties, such insured shall be furnished with a certified copy of
 3   said bond, upon which he, she or it shall have a right of
 4   action, and shall be and are hereby authorized to bring suit in
 5   the name of the Commonwealth for his, her or its use and benefit
 6   against said public adjuster and his sureties and to prosecute
 7   the same to final judgment and execution. [Where suit is
 8   instituted by any such insureds on the bond of the public
 9   adjuster, it shall be commenced within one year after the
10   performance and final settlement of said contract, and not
11   later. Where suit is so instituted by an insured or insureds, no
12   other action shall be brought by any other claimant, but any
13   other claimant may file his claim in the action first brought
14   and be made party thereto within one year from the completion of
15   the work under said contract, and not later. If two or more
16   actions be brought on the same day, the action in which the
17   largest claim is demanded shall be regarded as the first action.
18   Any creditor who has brought an action within one year as
19   aforesaid, but after suit brought by another creditor or on the
20   same day, may intervene in the suit first brought within the
21   year, notwithstanding the fact that the intervention in such
22   case be after the expiration of the year, provided said
23   intervention be made within 30 days after the expiration of the
24   year.] If the recovery on the bond should be inadequate to pay
25   the amounts found due to all of said creditors, judgment shall
26   be given to each creditor pro rata of the amount of the
27   recovery. The surety on said bond may pay into the court, for
28   distribution among said claimants and creditors, the full amount
29   of the surety's liability, to wit, the penalty named in the
30   bond, less any amount which said surety may have had to pay to

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 1   the Commonwealth by reason of the execution of said bond, and,
 2   upon so doing, the surety will be relieved from further
 3   liability. In all suits instituted under the provisions of this
 4   act, such personal notice of the pendency of such suits,
 5   informing them of their right to intervene, as the court may
 6   order, shall be given to all known creditors and, in addition
 7   thereto, notice shall be given by publication in newspapers of
 8   general circulation, published in the county or municipality
 9   where the contract was performed, once a week for at least three
10   successive weeks: Provided, however, That, when such suit has
11   begun within three weeks of the end of the year within which
12   suit may be brought, said notice by publication shall be only
13   for the period intervening between the time of instituting such
14   suit and the end of the year.
15      Section 3.    The act is amended by adding sections to read:
16   Section 4.1.    Fees.
17      (a)   Limits.--A public adjuster may not charge, agree to or
18   accept as compensation or reimbursement any payment, commission,
19   fee or another thing of value that is more than:
20            (1)   for a catastrophic claim settlement, 10%; or
21            (2)   for an insurance claim settlement, 15%.
22      (b)   Prohibition.--A public adjuster may not:
23            (1)   require, demand or accept any fee, retainer,
24      compensation, deposit or other thing of value prior to
25      settlement of a claim; or
26            (2)   collect a fee from the portion of a claim offered to
27      or received by the insured before the public adjuster was
28      retained.
29   Section 4.2.    Requirements and prohibitions.
30      (a)   Notification letter.--A public adjuster shall provide

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 1   the insurer a notification letter, which must be signed by the
 2   insured, authorizing the public adjuster to represent the
 3   insured's interest. The insurer shall verify that the person
 4   acting as the public adjuster holds a valid license with the
 5   department. If the person acting as the public adjuster does not
 6   hold a valid license, the insurer:
 7            (1)   Shall notify the department, who may refer the
 8      matter to the Office of Attorney General for investigation of
 9      a violation of any of the following:
10                  (i)    The act of December 17, 1968 (P.L.1224, No.387),
11            known as the Unfair Trade Practices and Consumer
12            Protection Law.
13                  (ii)    The act of October 17, 2008 (P.L.1645, No.132),
14            known as the Home Improvement Consumer Protection Act.
15                  (iii)   Section 6(b.1).
16            (2)   May not issue payment to the person acting as an
17      adjuster associated with the claim.
18      (b)   Assignment.--
19            (1)   Subject to a policy's terms relating to
20      assignability, a property insurance policy, regardless of
21      when issued, may provide that the rights and benefits under
22      the insurance policy may only be assigned to a person who has
23      the legal authority to represent the named insured or to a
24      subsequent owner of the property to whom title is
25      transferred, and may prohibit assignment of rights and
26      benefits to any other person, including a property repair
27      contractor.
28            (2)   For the purposes of this subsection, having "legal
29      authority to represent the named insured" includes the person
30      named by the named insured as having the named insured's

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 1      power of attorney, the person who is the named insured's
 2      licensed public adjuster or any other comparable person.
 3      Property repair contractors operating in this Commonwealth
 4      may not subvert the public adjuster licensing requirements of
 5      the act through the acquisition of a power of attorney from
 6      the named insured.
 7      (c)   Prohibitions.--A public adjuster may not:
 8            (1)   Suggest that the property is damaged unless an
 9      inspection of the property has been completed.
10            (2)   Offer to pay an insured's deductible or indicate
11      that the insured's deductible will be waived.
12            (3)   Acquire any interest in the salvage of property
13      subject to a contract with the insured.
14            (4)   Withhold funds due to an insured in excess of the
15      amount of the fee due to the public adjuster for more than 30
16      d ays subject to section 5(e)(4).
17            (5)   Restrict or prevent an insurer or other person
18      acting on behalf of the insurer from:
19                  (i)    Accessing the insured property that is the
20            subject of the claim.
21                  (ii)    Obtaining information necessary to investigate
22            and process a claim.
23                  (iii)    Contacting the insured directly regarding the
24            claim, except the insurer shall send to the public
25            adjuster a copy of any correspondence with the insured
26            relating to the claim.
27      (d)   Inquiry or request for information.--For a written
28   inquiry by the department or a request for documentation related
29   to an application or renewal of a license or an investigation, a
30   public adjuster must provide a written response or produce the

20250HB1972PN2487                       - 9 -
 1   requested documents within 30 days of receiving the inquiry or
 2   request.
 3      (e)     Cooperation with investigation.--A public adjuster shall
 4   cooperate with the department in any investigation related to a
 5   violation of this act. Cooperation includes, but is not limited
 6   to, being interviewed by the department, providing a written
 7   statement to the department, providing pertinent documentation,
 8   testifying at a proceeding and completing an authorization for
 9   release of information, as necessary, in a form specified by the
10   department.
11      (f)     Failure to respond.--If a public adjuster fails to
12   respond to an inquiry as specified in subsection (d) and fails
13   to correct the violation within 15 days, the department may file
14   an order to show cause against the public adjuster on that basis
15   and seek a fine of no more than $100 per day in addition to the
16   denial, suspension or revocation of a license.
17      (g)     Required reporting of denial, suspension or revocation
18   of license.--A public adjuster must report having a public
19   adjuster license or other professional license, or an
20   equivalent, denied, suspended or revoked by a governmental
21   entity or self-regulating professional association to the
22   department within 30 days of the occurrence.
23      (h)     Required reporting of criminal charge.--Within 30 days
24   of being charged with criminal conduct, a public adjuster shall
25   report the charges to the department. The public adjuster shall
26   provide the department with the following within 30 days of
27   availability to the public adjuster:
28            (1)   A copy of the criminal complaint, information or
29      indictment.
30            (2)   A copy of the order resulting from a pretrial

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 1      hearing, if any.
 2          (3)     A report of the final disposition of the charges.
 3   Section 4.3.    Separate pre-contract disclosure.
 4      Prior to the signing of a contract, a public adjuster shall
 5   provide the insured with a separate disclosure document
 6   regarding the claim process, which must contain the following
 7   information:
 8          (1)     That a property insurance policy obligates the
 9      insured to present a claim to the insurance company for
10      consideration.
11          (2)     An explanation of the three types of adjusters that
12      could be involved in the claim consideration process under
13      paragraph (1), as follows:
14                (i)    A company adjuster who is an insurance adjuster
15          who is an employee of an insurance company. A company
16          adjuster represents the interest of the insurance company
17          and is paid by the insurance company. A company adjuster
18          will not charge the insured a fee.
19                (ii)    An independent adjuster who is the insurance
20          adjuster hired on a contract basis by an insurance
21          company to represent the insurance company's interest in
22          the settlement of the claim. An independent adjuster is
23          paid by the insured's insurance company. An independent
24          adjuster will not charge the insured a fee.
25                (iii)    A public adjuster who is an insurance adjuster
26          who does not work for an insurance company. A public
27          adjuster works for the insured to assist in the
28          preparation, presentation and settlement of the claim.
29          The insured hires a public adjuster by signing a contract
30          agreeing to pay the public adjuster a fee or commission

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 1            based on a percentage of the settlement or other method
 2            of compensation.
 3            (3)   That the insured may, but is not required to, hire a
 4      public adjuster to help the insured meet the obligations
 5      under the policy.
 6            (4)   That the insured may initiate direct communications
 7      with an attorney retained by the insured, the insurer, the
 8      insurer's adjuster, the insurer's attorney or any other
 9      person regarding the settlement of the insured's claim.
10            (5)   That the public adjuster is not a representative or
11      employee of the insurer.
12            (6)   That the salary, fee, commission or other
13      consideration paid to a public adjuster is the obligation of
14      the insured.
15            (7)   The public adjuster's license number and the web
16      address of or a link to the department's publicly accessible
17      Internet website to verify current licensure.
18            (8)   A statement that the individual may file a complaint
19      with the department that contains the web address of or a
20      link to the department's current publicly accessible Internet
21      website, email and telephone number.
22      Section 4.     Sections 5(a), (a.1), (a.2) and (d) and 6(a)
23   introductory paragraph and (7) of the act are amended and the
24   sections are amended by adding subsections to read:
25   Section 5.     Contract.
26      (a)   Written contract required.--No public adjuster shall,
27   directly or indirectly, act within this Commonwealth as a public
28   adjuster without having first entered into a contract, in
29   writing, on a form approved by the department prior to the
30   issuance of the public adjuster's license and executed in

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 1   duplicate by the public adjuster and the insured or a duly
 2   authorized representative. One copy of this contract shall be
 3   kept on file by the public adjuster, available at all times for
 4   inspection by the department. The department shall disapprove a
 5   contract form if, in the department's opinion, the contract or
 6   its provisions:
 7             (1)   Fail to comply with this section or any regulation.
 8             (2)   Are unreasonable.
 9             (3)   Are contrary to the interests of the public.
10             (4)   Are misleading or unfair to the insured.
11   At the department's discretion, the department may also require
12   the submission of advertising or solicitation material.
13      (a.1)    Rescission.--
14             (1)   A contract with a public adjuster may be rescinded
15      by any person signing the contract[.] within:
16                   (i)    five business days after signature for all
17             contracts; or
18                   (ii)    15 business days if the contract was signed
19             within five business days after the loss was discovered
20             by the insured.
21             (2)   If the insured exercises the right to rescind the
22      contract, anything of value given by the insured under the
23      contract shall be returned to the insured within 15 business
24      days following the receipt by the public adjuster of the
25      rescission notice.
26             (3)   If an insured exercises the insured's right to
27      rescind under this subsection, the insured shall be liable
28      for:
29                   (i)    the reasonable value of services performed by
30             the public adjuster; and

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 1                 (ii)   the reasonable and necessary emergency out-of-
 2          pocket expenses or services that were paid for or
 3          incurred by the public adjuster during the period
 4          preceding rescission.
 5      (a.2)   Disclosure.--The contracts shall disclose the
 6   following items with each of these items separately signed or
 7   initialed by the insured and the public adjuster:
 8          (1)     That the insured has the right to rescind the
 9      contract [within three calendar days after signature]
10      pursuant to subsection (a.1).
11          (2)     Fees to be charged or assessed by the public
12      adjuster together with an explanation about how the fees will
13      come from a portion of the claims payment, if any, made by
14      the insurer under the policy and are not in addition to the
15      payments.
16          (3)     That the adjuster will provide the insured a copy of
17      an estimate or report of losses and, upon the insured's
18      request, any supporting documentation it sends to the
19      insurer.
20          (4)     That the public adjuster is not a representative or
21      employee of the insurer and is an independent licensee of the
22      department.
23          (5)     The public adjuster's license number and the web
24      address of or a link to the department's publicly accessible
25      Internet website to verify current licensure.
26          (6)     A description and location of the loss, if
27      applicable.
28          (7)     A description of services to be provided to the
29      insured.
30          (8)     Attestation language stating that the public

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 1      adjuster is fully bonded under the laws of this Commonwealth.
 2          (9)    A statement that the individual may file a complaint
 3      with the department, which shall contain the department's
 4      current publicly accessible Internet website, email and
 5      telephone number.
 6      * * *
 7      (a.4)   Co-payee.--A contract may specify that a public
 8   adjuster shall be named as a co-payee on an insurer's payment of
 9   a claim only if the following requirements are met:
10          (1)    The public adjuster's compensation is based on a
11      share of the insurance settlement, the exact percentage of
12      which must be specified.
13          (2)    Initial expenses to be reimbursed to the public
14      adjuster from the proceeds of the claim payment are specified
15      by type, with dollar estimates specified in the contract and
16      with any additional expenses first approved by the insured.
17          (3)    Compensation provisions in a public adjusting
18      contract may not be redacted in any copy of the contract
19      provided to the Insurance Commissioner.
20      (a.5)   Responsibilities of public adjuster.--If an insurer,
21   not later than five business days after the date on which a loss
22   is reported to the insurer, either pays or commits in writing to
23   pay to the insured the policy limit of the insurance policy, the
24   public adjuster:
25          (1)    May not receive a commission consisting of a
26      percentage of the total amount paid by an insurer to resolve
27      a claim.
28          (2)    Shall inform the insured that the loss recovery
29      amount might not be increased by the insurer.
30          (3)    Shall be entitled only to reasonable compensation,

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 1      as determined by the Insurance Commissioner, for services
 2      provided by the public adjuster based on the time spent on a
 3      claim and expenses incurred by the public adjuster during the
 4      five business days.
 5      * * *
 6      (d)   Contracts limited to adjustment of insurance losses.--No
 7   public adjuster shall, directly or indirectly, through or with
 8   any person, partnership, corporation or association in which it
 9   has an indirect or beneficial interest, enter into any contract
10   with any insured for the repair, replacement, restoration,
11   renovation or demolition of damaged property, real or personal,
12   [at any time prior to the date a verdict or award is entered or
13   payment is received from the insurance carrier, whichever event
14   shall occur first.] that the public adjuster has been contracted
15   to adjust.
16      (e)   Public adjuster contract contents.--A public adjuster
17   contract may not contain any contract term that:
18            (1)   allows the public adjuster's percentage fee to be
19      collected when money is due from an insurance company but not
20      paid or that allows a public adjuster to collect the entire
21      fee from the first check issued by an insurance company
22      rather than as percentage of each check issued by an
23      insurance company;
24            (2)   requires the insured to authorize an insurance
25      company to issue a check only in the name of the public
26      adjuster;
27            (3)   imposes collection costs or late fees; or
28            (4)   permits the public adjuster to:
29                  (i)   charge a fee for the negotiation of additional
30            living expenses; or

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 1                  (ii)   withhold a fee from payment of additional
 2            living expenses.
 3   Section 6.     Revocation, etc., of license.
 4      (a)   Grounds for fines, suspensions or revocations.--
 5   [Committing any of the following acts] The following acts are
 6   prohibited and shall be grounds for fine, suspension or
 7   revocation of a public adjuster's license:
 8            * * *
 9            (7)     Receiving, directly or indirectly, any compensation,
10      referral fee, commission or thing of value or profit from any
11      person, partnership, association or corporation engaged or
12      interested in the business of salvage, repair, replacement,
13      restoration, renovation or demolition of damaged property,
14      real or personal[, unless such compensation, commission or
15      thing of value or profit is disclosed to the insured and
16      agreed to in the contract].
17            * * *
18      (b.1)     Additional penalty.--In addition to a penalty provided
19   under this act, unlicensed activity prohibited under this act
20   shall constitute an offense under 18 Pa.C.S. § 4117 (relating to
21   insurance fraud) and shall subject a person or entity to
22   criminal prosecution as a felony of the third degree and to
23   civil penalties.
24      * * *
25      Section 5.      This act shall take effect in 180 days.




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