The Kentucky Department of Insurance and Sharon P. Clark, the Insurance Commissioner of Kentucky, published an Advisory Opinion targeted toward any public adjuster licensed to operate in Kentucky. The purpose of the Advisory is to relay their position on the interpretation of Statutes KRS 304.9-433 and KRS 304.9-4333.
Several public adjusters have submitted contracts seeking approval from the Department, which include language that would allow them to collect a percentage of claims money negotiated, prior to execution of the contract with the insured. This goes against Statute 304.9-4333, which states that the fee charged to an insured by a public adjuster must be collected after the insured has received the proceeds from the insurer.
Per Statute 304.9-433, collecting fees prior to the execution of a contract is only permitted in emergency circumstances, and with the Commissioner's approval.
In addition, KRS 304.9-4333 states that a public adjuster may not charge a fee that exceeds 15% of the total insurance recovery of the insured for non-catastrophe claims, and 10% for catastrophe claims. The Department states that the statute does not distinguish between contingency fees, hourly fees, and flat fees, and is thus applicable to all fee types.
The Advisory can be found here.