Iowa Insurance Division Issues Financial Responsibility Guidance for Adjusters

The Iowa Insurance Division has released Bulletin 25-08 to provide clarity on the financial responsibility requirements established under Senate File 619 and Iowa Code § 522C.7. The guidance explains how public and independent adjusters, as well as adjuster business entities, may demonstrate compliance through approved options such as surety bonds, professional liability or E&O insurance, or an irrevocable letter of credit. The bulletin also outlines filing requirements, recordkeeping expectations, and consequences for failing to maintain continuous financial responsibility as Iowa continues implementing the expanded adjuster licensing framework.

Background on SF 619

Signed into law on April 22, 2025, SF 619 significantly amended Iowa Code chapter 522C, creating a comprehensive licensing structure for:

• Public adjusters
• Independent adjusters
• Staff adjusters (optional licensure)
• Appraisers
• Umpires

As implementation continues, the Division has received questions regarding how adjusters and adjuster business entities may satisfy the law’s financial responsibility requirement. Bulletin 25-08 is intended to address those questions and outline acceptable compliance options.

Who Must Comply

Under Iowa Code § 522C.7:

• Public adjusters and independent adjusters are required to demonstrate financial responsibility.
• Staff adjusters are exempt from this requirement but must comply with all other provisions of Chapter 522C.
• Appraisers and umpires are not subject to financial responsibility requirements under Iowa law.

Acceptable Forms of Financial Responsibility

The Division has confirmed that adjusters and adjuster business entities may meet the financial responsibility requirement through several approved options. These options are designed to balance consumer protection with flexible, least-burdensome compliance.

1. Surety Bonds

Adjusters may comply through either individual or business entity bonds issued by an insurer authorized to transact business in Iowa.

• Individual bonds must be issued in an amount of at least $50,000.
• Business entity bonds may be written as scheduled or blanket bonds, with aggregate limits based on the number of licensed adjusters employed:
  • 2–20 adjusters: minimum aggregate of $250,000
  • 21–40 adjusters: minimum aggregate of $500,000
  • 41+ adjusters: minimum aggregate of $1,000,000

Non-employee adjusters (such as 1099 contractors) must maintain their own qualifying financial responsibility unless they are specifically covered under the business entity’s bond.

2. Professional Liability or E&O Insurance

Adjusters may also satisfy the requirement through professional liability or errors and omissions (E&O) insurance, provided the coverage:

• Is issued by an insurer authorized in Iowa
• Covers acts or omissions related to adjusting services
• Provides at least $50,000 per adjuster, with an aggregate limit of $1,000,000
• Includes coverage for fraud, violations of Iowa Code Chapter 522C, and unfair or deceptive acts

As with bonds, independent contractors must carry their own coverage unless expressly covered by the business entity’s policy.

3. Irrevocable Letter of Credit

An adjuster or adjuster business entity may alternatively submit an irrevocable letter of credit, provided it:

• Is issued by a qualified financial institution authorized in Iowa
• Is in the minimum amount of $50,000
• Is subject to lawful execution for covered violations
• Cannot be terminated without at least 30 days’ written notice to the licensee

Filing and Recordkeeping Expectations

Adjusters currently using a previously filed bond may continue doing so without additional action, provided they remain compliant with Iowa Code § 522C.7.

Those electing to use a different approved method must submit appropriate documentation following the Division’s published instructions. Licensees are required to maintain continuous proof of financial responsibility and make documentation available upon request.

Any lapse or cancellation in coverage may result in license inactivation until acceptable proof is restored and approved.

Enforcement and Sunset Provision

Failure to comply with Iowa Code § 522C.7 may also be treated as an unfair or deceptive act or practice under Iowa Code Chapter 507B.

Bulletin 25-08 includes an automatic sunset date of June 30, 2026, allowing time for further legislative review or clarification if needed.

Questions or Additional Guidance

Questions regarding the bulletin may be directed to the Iowa Insurance Division’s Producer Licensing team via email or phone.