Surplus lines exposure
Louisiana Banned the Anti-Public-Adjuster Clause, Then Exempted the Policies That Carry It
Four jurisdictions, one drafting variable: whether the statute names the non-admitted carrier that writes the endorsement.
Photo: Wikimedia Commons / Americasroof
In short
Louisiana banned anti-public-adjuster policy clauses in 2023, but subsection B of La. R.S. 22:1274 exempts commercial policies written by surplus lines insurers. New York has no such statute, and its Department of Financial Services told a federal court that surplus lines forms are not subject to its review or approval. Only Texas and Massachusetts reach non-admitted paper by name.
Run the Louisiana clocks on your file.
Enter the dates you know. Clocks without a date show what starts them.
- —La. R.S. 22:1892.2
Initiate loss adjustment (declared event)Carrier clock
30 days from notice of loss on a catastrophic loss to immovable property; the commissioner may extend by an additional 30 days.
This is the § 1892.2 track, and it applies only to a catastrophic loss — one arising from a presidentially or gubernatorially declared emergency or disaster (§ 1892(B)(1)(c)(i)). A non-declared loss stays on § 1892: 14 days to initiate adjustment. The declaration is the switch; put it on the file-open checklist next to the policy number and deductible.
- —La. R.S. 22:1892.2
Pay amount due — residential (declared event)Carrier clock
60 days from satisfactory written proof of loss for residential immovable property.
The § 1892.2 clock that replaced the old 30-day § 1892 deadline for hurricane claims on July 1, 2024. The carrier controls the start date until proof of loss is satisfactory; under § 1892.2(D) a request for information the insurer already has, or one the trier of fact finds unnecessary, does not reset the clock.
- —La. R.S. 22:1892.2
Pay amount due — other immovable / commercial (declared event)Carrier clock
90 days from satisfactory written proof of loss for immovable property other than residential; the commissioner may add 30 days for a commercial policy insuring multiple locations.
Same satisfactory-proof-of-loss trigger as the residential clock, thirty days longer.
- —La. R.S. 22:1892.2(C)(1)
Pre-suit cure period notice (condition precedent)Hard deadline
60 days' written notice of the violation to the insurer before filing suit — a condition precedent to any action for penalties and attorney fees.
It can be the Department of Insurance form or a formal written demand stating the facts and circumstances. Suit filed without it is automatically stayed until 60 days after the notice is received (§ 1892.2(C)(7)) and is dismissed at the insured's cost if the carrier then pays the full amount demanded. Recoverable expenses, including attorney fees, are capped at 20% of the amount alleged due (C)(3); a partial tender inside the window halves the penalty on the amount paid (C)(4).
- —La. R.S. 22:868(B); Wilson v. La. Citizens (2024)
Suit limitation: two years from inception of the lossHard deadline
The policy's own limitation clause, which R.S. 22:868(B) bars from being shorter than 24 months after the inception of the loss.
This is a policy term, not a prescriptive statute for the claim. In Wilson v. Louisiana Citizens (No. 2023-CC-01320, Jan. 2024) the Louisiana Supreme Court enforced a two-year policy clause and dismissed a late suit. Read the actual policy before calendaring; a cure notice transmitted inside the final 90 days suspends prescription under § 1892.2(C)(6).
- —La. R.S. 22:1892.2
Prescription on penalty claimsHard deadline
Two-year liberative prescription on the § 1892.2 penalty and attorney-fee claim, running separately from the underlying policy limitation.
Under § 1892.2(C)(6), a cure notice transmitted in the last 90 days before prescription runs suspends the period — for both the penalty action and the underlying policy dispute — until 30 days after the insurer's written response, which is due within 60 days.
- —La. R.S. 22:1264
Proof-of-loss submission window (declared event)Hard deadline
Not less than 180 days to submit proof of loss on a declared-event loss; the window does not run while the emergency declaration stands and civil authorities deny access to the property.
Coverage cannot be automatically denied for missing the policy's proof-of-loss timing on a declared-event loss. Replacement-cost policyholders get one year from the date of loss, or from issuance of proceeds, whichever is later, to complete repairs and recover withheld depreciation.
- —La. R.S. 22:1892.2(B)(1)
Penalty floor for arbitrary failure to payContext
Where the failure to pay is arbitrary, capricious, or without probable cause: the greater of 50% of the amount found due (or of the shortfall on a partial tender) plus proven economic damages, or $2,500, with reasonable attorney fees and costs.
Section 1892(J) now imposes a good-faith duty on the insured and the insured's representative; an estimate or cure notice without a good-faith evidentiary basis is a statutory factor the trier of fact must weigh before awarding any penalty or fees (§ 1892(J)(4)). Price the notice the way you would price a sworn statement.
Computed from the claimOS field guide for this state. Clocks the guide states as plain days are counted as calendar days; business days are counted as weekdays. Informational, not legal advice. Verify against the current statute and policy language.
Louisiana banned the anti-public-adjuster clause in 2023, then wrote a second subsection exempting the commercial surplus lines policies that carry it. Four months before that statute took effect, the state's insurance department had rescinded the directive it once used to police those same forms. The carve-out has a paper trail.
La. R.S. 22:1274, subsection B
Act 328 of the 2023 Regular Session began as S.B. 156. It was signed on June 12, 2023 and took effect August 1, 2023.13 Subsection A is as clean a prohibition as a public adjuster could ask for: "An insurer shall not include a provision in any policy of property insurance that prohibits an insured from hiring a public adjuster for services provided pursuant to the provisions of this Title."1
Then comes B.
"Subsection A of this Section does not apply to commercial insurance policies written by any surplus lines insurer as defined in R.S. 22:46."1 And R.S. 22:46(27) defines that term broadly: "an approved unauthorized insurer or eligible unauthorized insurer, as defined in this Section, or a domestic surplus lines insurer as provided in R.S. 22:436.1."2
Why ban a clause and then exempt the segment most likely to write it? The eighteen months before Act 328 answer that. On January 24, 2022 the Louisiana Department of Insurance issued Directive 219, which, in the department's own later words, "directed all authorized insurers and surplus lines insurers doing business in Louisiana to review policy forms and endorsements to ensure compliance with La. R.S. 22:1704(E)(2)."3 On August 23, 2022 the Division of Administrative Law issued an order in In the Matter of Velocity Risk Underwriters, LLC, Docket No. 2022-1574-INS, "stating that Directive 219 is invalid."3 On March 29, 2023 the department issued Directive 219-R and rescinded 219 outright.3
Ten weeks later the legislature passed Act 328 with subsection B in the enrolled text.13 A regulator had tried to reach surplus lines forms by directive, lost, and stood down. The statute that followed did not try again. For Louisiana commercial files, a market that leans hard on non-admitted and Lloyd's placements as an earlier arbitration-stay post describes, subsection A is real and subsection B governs the file.
New York's regulator wrote back
Peter Barbato sued in New York Supreme Court on May 28, 2025, Index No. 653259/2025. The carriers removed under CAFA on June 26, 2025, and the case landed in front of Judge John G. Koeltl as No. 1:25-cv-05312 (S.D.N.Y.).6 Paragraph 18 of that complaint, quoted in the removal notice, describes the defendants as "all foreign insurers writing surplus lines of insurance."6 Every carrier in the caption is non-admitted.
The underlying facts are ordinary. A fire loss. The insured retained North Jersey Public Adjusters, Inc. on a five percent fee, and on or about March 22, 2023 the insurers sent a demand letter giving ten days to cancel the public adjusting contract.4 The insured cancelled.
Then the docket turned. On October 8, 2025 the court invited the New York Department of Financial Services to state whether it held primary jurisdiction over the clause, and directed the Clerk to email the order and the filings to counsel@dfs.ny.gov.12 On October 17 the court denied remand and dropped Superintendent Adrienne A. Harris as a named defendant.12 On November 7, 2025 DFS filed its letter.12
The court recorded the department's position this way: the defendants' inclusion of the APA clause in the policy is "not expressly prohibited by the laws and regulations that DFS is tasked with implementing," and therefore "cannot violate the Insurance Law or the Financial Services Law because neither law expressly bars such language."4 Then the court said why, at page 8: "DFS has no direct authority to bar the defendants from including an anti-public-adjuster clause because the defendants are excess-line insurers whose policy forms are not subject to DFS's review or approval."4
Read the posture before reading the holding. It was the carriers who argued that DFS held primary jurisdiction, which in practice argues that no court should decide this; the department answered that it had no authority over the form; the court kept the case and then dismissed it on the merits.4 An admitted carrier's property form passes through a state form-filing process, where a department can object to an endorsement before a single policy issues, and where a policyholder who later fights the endorsement can point to an approval record. A surplus lines form goes through no such process, by design. Freedom of rate and form is the trade the non-admitted market makes for writing risks the admitted market declines. The consequence on your file is that there is no regulator standing behind the insured, and no filed form to measure the endorsement against.
Five counts, then eight
Barbato was dismissed twice. Barbato I is ECF No. 22, decided December 15, 2025: five counts, dismissed without prejudice, with 21 days to amend.4 The Amended Complaint arrived January 2, 2026 as ECF No. 23, pleading eight counts, and by then Barbato had dropped out, leaving NJPA as the sole plaintiff.12 Barbato II is ECF No. 30, decided May 15, 2026: all eight counts dismissed with prejudice, judgment entered, case closed.5
The reasoning is short and it repeats. On tortious interference with contract, at page 6: "Because the plaintiff[] do[es] not allege plausibly that the APA clause violates any law, and because the defendants' enforcement amounts to no more than the exercise of their contractual rights, the complaint fails to allege wrongful conduct sufficient to support a tortious interference with contract claim."5 With no statute to violate, enforcing the endorsement is simply performing the contract.
Legality does the work.
On tortious interference with prospective economic advantage, at page 8: "Because the complaint fails to allege conduct undertaken solely to harm the plaintiffs or the use of wrongful means tantamount to a crime or independent tort, the plaintiffs fail to state a plausible claim for tortious interference with economic advantage."5 The amended complaint had identified the prospective relationships as "all New York insureds with insurance policies covering them for property and casualty loss," which the court held too generalized.5
The Donnelly Act count, N.Y. Gen. Bus. Law § 340, failed on market definition. NJPA pleaded the relevant product market as "the furnishing of public adjusting services to insureds by State-licensed public adjusters," but the court found it "offers no facts in support of its contention that this is indeed the relevant, economically significant product market at issue," and concluded at pages 9 and 10 that "NJPA's failure to allege plausibly a relevant product and geographic market is thus fatal to its Donnelly Act claim."5 Count IV, prima facie tort, added on amendment, failed for want of "disinterested malevolence." NJPA conceded in its opposition brief that it had pleaded the count "simply to preserve it for the purpose of a potential future appeal."5
The appeal is live. A notice of appeal filed May 24, 2026 was deficient; a corrected notice followed on June 3, 2026, the fee was paid, and the record and docket sheet went to the Second Circuit.12
What the public record does not show is worth stating in full. No Second Circuit docket number appears on any free source, so nothing here predicts how the appeal comes out or when it will be heard. Also open: Swerling Milton Winnick Public Insurance Adjusters, Inc. v. Velocity Risk Underwriters, LLC, No. 1:26-cv-12095 (D. Mass.), filed May 7, 2026 before Judge Donald L. Cabell against the same surplus lines underwriter whose 2022 administrative challenge ended Directive 219.113 That docket reflects an order on a motion to dismiss dated July 17, 2026 and a protective order dated September 9, 2026; the opinion is not public, so what the July order held is unknown here. The case survived to discovery and remains pending.11 One more caution: the district court document most often circulated as the Barbato ruling is the October 17, 2025 remand denial, which decided jurisdiction and nothing about the clause.12
Texas wrote the mechanism into the bill analysis
Tex. Ins. Code § 4102.007(b) reads: "An insurance policy, including any endorsement, to which this section applies may not include a provision that prohibits an insured from contracting with a public insurance adjuster for services provided under this chapter."7 Subsection (b) only matters because of subsection (a), which lists the carriers covered, and (a)(7) reaches "an eligible surplus lines insurer if this state is the insured's home state as defined by Section 981.002."7 Added by H.B. 1706, effective September 1, 2023.7
The Senate Research Center's bill analysis for C.S.H.B. 1706, dated May 4, 2023, states the purpose without diplomacy: "Certain insurance carriers, particularly surplus lines, which are not subject to the same regulatory oversight as other insurers in Texas, have sought to restrict or remove from their policies the ability of an insured to hire a public adjuster."9
Massachusetts reached the same drafting choice three years on. G.L. c. 175 § 2C, enacted by Chapter 187 of the Acts of 2026 and effective November 5, 2026, applies to "a company as defined in section 1 and any non-admitted or surplus lines insurer," and makes the clause unenforceable and excised from the policy where it is imposed as a condition to recovery.8 The verb-level reading of Chapter 187 and c. 176D § 3(9)(o) ran in an earlier post and is not repeated here.
| State | Authority | Effective | Reaches surplus lines? | Remedy |
|---|---|---|---|---|
| Texas | Tex. Ins. Code § 4102.007 (H.B. 1706) | Sept. 1, 2023 | Yes. Subsec. (a)(7) names eligible surplus lines insurers | None stated in the section |
| Massachusetts | G.L. c. 175 § 2C (St. 2026, c. 187) | Nov. 5, 2026 | Yes. Names 'non-admitted or surplus lines insurer' | Unenforceable and excised; also c. 176D § 3(9)(o) |
| Louisiana | La. R.S. 22:1274 (Acts 2023, No. 328) | Aug. 1, 2023 | No. Subsec. (B) exempts commercial surplus lines policies | None stated in the section |
| New York | No statute located | n/a | No statute | None |
The model act is no help. NAIC's Public Adjuster Licensing Model Act (#228) was adopted in 2005 and has not been amended since. Its full text contains zero occurrences of "endorsement," zero of "rider," and zero of "policy form."10 All twenty references to "insurer" impose duties on the public adjuster, none on the carrier.10 A state that copies #228 wholesale gets a licensing regime and no answer to this clause.
Six further states were checked and no provision was located: Florida, New Jersey, California, Oklahoma, Georgia and Colorado. This is not a fifty-state survey. Florida is the one most often misread. Section 626.8796(6) requires the public adjuster, before the contract is signed, to give the insured a separate disclosure document on a department-adopted form, and subsection (6)(c) says that document "Explains that the insured is not required to hire a public adjuster but has a right to do so."14 The duty runs to the adjuster. Nothing there restricts the carrier.
Read the dec page before the retainer
Start on the declarations page. A surplus lines policy announces itself: a stamping-office or surplus lines notice, a non-admitted disclosure in bold, a broker of record rather than an appointed agent, and no guaranty-fund protection. Once the paper is non-admitted, the form was filed with nobody.
Then pull the endorsement schedule, and pull it from the issued policy rather than the binder. These endorsements get added at issuance and are frequently missing from the quote documents an insured kept. Read the operative verbs and the trigger condition together. Whether the clause bars retention outright or conditions recovery on not using an adjuster changes the analysis in Massachusetts, where the § 2C excision remedy keys to the condition-to-recovery framing.8
Then ask what your state's statute names, if anything. Texas names eligible surplus lines insurers.7 Massachusetts names non-admitted and surplus lines insurers.8 Louisiana names them in order to exempt their commercial policies.1 New York names nothing, and its department told a federal judge in writing that the form sits outside its review.4
In a state with no statute, Barbato maps the remedies that remain. Interference theories fail because enforcing a lawful clause is contract performance, and antitrust theories fail on market definition well before anyone reaches the merits.5 The leverage is upstream, at intake, before the retainer is signed and before any fee is earned. A policy-audit worksheet for these endorsements is already published; run it on non-admitted commercial files first, because that is where the clause lives.
Questions PAs ask about this clause
Does a policy clause barring a public adjuster hold up?
It depends on whether a statute reaches the carrier that wrote the policy. Texas and Massachusetts both name surplus lines and non-admitted insurers in the operative section, so the clause is prohibited there. In New York there is no such statute, and the Southern District of New York enforced the clause through final judgment in Barbato II on May 15, 2026.
Is the Barbato case over?
No. The district court entered judgment on May 15, 2026 and closed the case, but a corrected notice of appeal was filed June 3, 2026 and the record and docket sheet were transmitted to the Second Circuit. No Second Circuit docket number appears on any free source, so the appeal's status beyond transmission is not public.
Does Louisiana's 2023 ban protect a commercial surplus lines policyholder?
No. La. R.S. 22:1274(A) prohibits the clause in property insurance policies, but subsection (B) says subsection (A) does not apply to commercial insurance policies written by any surplus lines insurer as defined in R.S. 22:46. Personal lines and admitted commercial paper get the protection; commercial surplus lines paper does not.
How can I tell whether an insured's policy is surplus lines?
Start with the declarations page and the first few pages behind it. Look for a surplus lines or stamping-office notice, a bolded non-admitted disclosure, a surplus lines broker rather than an appointed agent, and language stating the policy is not protected by the state guaranty fund. If those appear, the form was never filed with or approved by a state insurance department.
Does the NAIC model act give a state a ready answer to this endorsement?
No. The Public Adjuster Licensing Model Act (#228) was adopted in 2005 and has not been amended. It contains no reference to endorsements, riders or policy forms, and all twenty of its references to insurers impose duties on the public adjuster rather than on the carrier. A state adopting it gets licensing rules and nothing that touches this clause.
Sources cited
- La. R.S. 22:1274, Prohibited policy provision— Louisiana State Legislature
- La. R.S. 22:46(27), definition of surplus lines insurer— Louisiana State Legislature
- Directive 219-R (Rescinded), March 29, 2023— Louisiana Department of Insurance
- Barbato v. Interstate Fire & Cas. Co., ECF No. 22 (S.D.N.Y. Dec. 15, 2025)— RECAP / Free Law Project
- Barbato v. Interstate Fire & Cas. Co., ECF No. 30 (S.D.N.Y. May 15, 2026)— RECAP / Free Law Project
- Barbato v. Interstate Fire & Cas. Co., ECF No. 1 (Notice of Removal)— RECAP / Free Law Project
- Tex. Ins. Code § 4102.007, Right to Contract With License Holder— Texas Legislative Council
- Chapter 187 of the Acts of 2026 (S.785)— Massachusetts General Court
- C.S.H.B. 1706 Bill Analysis, May 4, 2023— Texas Senate Research Center
- Public Adjuster Licensing Model Act (#228)— National Association of Insurance Commissioners
- Swerling Milton Winnick Public Ins. Adjusters, Inc. v. Velocity Risk Underwriters, LLC, No. 1:26-cv-12095 (D. Mass.)— CourtListener
- Barbato v. Interstate Fire & Cas. Co., No. 1:25-cv-05312 (S.D.N.Y.) docket— CourtListener
- S.B. 156, 2023 Regular Session (bill history; Act 328, effective 8/1/2023)— Louisiana State Legislature
- Fla. Stat. § 626.8796, Public adjuster contracts; disclosure statement; fraud statement— The Florida Senate
Statutory clocks, tracked on every file.
claimOS calendars these deadlines automatically on each claim: acknowledgement, decision, payment, and the suit limitation, each with its code section attached and visible to the whole team.