Safelite Group and Safelite Solutions attorneys says the Minnesota Commerce Commissioner is attempting “to distract attention from the unconstitutional speech restrictions by asserting that Safelite is ‘engaged in the unlicensed adjusting of insurance claims.’” The attorneys call this a “red herring” and say the crux of the case is about the company’s right to free speech, not licensed claims adjustment.
Safelite Group has sued the commissioner and asked the U.S. District Court for a preliminary injunction and to enjoin and declare invalid enforcement of a Minnesota statute which excludes “Safelite from doing business in Minnesota without the opportunity for a hearing.”
Safelite is referring to a settlement agreement between the Minnesota Department of Commerce, Insurance Division and Auto Club Group that provides for the Auto Club Group to pay a civil penalty of $150,000 and “cease and desist from using Safelite Solutions, or any other subsidiary of Safelite Group Inc. as its administrator of automobile glass claims in Minnesota,” according to the settlement agreement.
“Plaintiffs fail to address Safelite Solutions’ unlicensed and improper adjusting of insurance claims. State law requires that parties who negotiate on behalf of an insurer to settle an insurance claim must register with the department as insurance adjusters, obtain training and education, and follow required standards on the adjustment of claims. Safelite Solutions has repeatedly violated these laws while working for the Auto Club Group (AAA) and other insurers, both by adjusting claims without a license and by adjusting claims in a manner that falls short of the required standards,” attorneys representing the commerce commissioner allege in court documents in response to Safelite’s complaint.
Safelite’s attorneys contend this argument is “baseless” because the company can continue to serve as a third-party automotive glass claims administration for other companies besides AAA without a claims’ adjuster license.
“The consent order demonstrates the baselessness of the defendant’s argument because it leaves Safelite free to perform claims-processing services for insurers besides AAA, and it affirmatively allows Safelite to serve AAA for ‘storm-related events,’” the company’s attorneys write in response.
“The defendant could never have authorized Safelite to do that if he believed Safelite was impermissibly operating without a license. … If the defendant believes Safelite’s requires an adjuster’s license to operate, he can seek to enforce that requirement directly—before a neutral forum that would allow Safelite to show why it is not engaged in insurance adjusting.”
During a January 14, 2015 meeting with the Department of Commerce (where Safelite learned of the settlement agreement between the department and Auto Club Group), Safelite contended in its complaint, “The Department of Commerce indicated that it was planning to enter into similar consent orders with other insurance-company clients of Safelite Solutions and that these consent orders could be finalized and issued in the near future.”
Though the Commerce Department indicated future settlement agreements, similar to the one with Auto Club Group, could be signed, it did not offer Safelite any details.
“Although the department refused to disclose any details, it indicated that future orders would also include a cease-and-desist component that would bar each insurance company client in Minnesota from conducting any business of any sort with Safelite Solutions,” Safelite attorneys wrote at the time.
In this, the company’s attorneys contend Safelite Solutions “does nothing that comes within the statutory definition of ‘insurance adjuster.’”
“Safelite has no authority to negotiate the settlement of claims and does not do so,” according to court documents. “Rather, the insurer sets the compensation to be paid, and Safelite communicates that figure to repairers and policyholder. Safelite has no discretion to adjust the amount or otherwise ‘negotiate.’”
In the 50 states where the company offers is third-party claims administration services, not one requires an insurance adjuster license, Safelite’s attorneys say.
The judge has not issued any decisions at press time.
To read Safelite’s full response, click here.
To read the Minnesota Commerce Commissioner’s response, click here.