This is more about contract law, but I am interested in what makes a contract invalid. For example, a Public Adjsuter in Arizona has on his contract that he is giving a percentage of his take to a non-licensed entity for other work, which I think was his angle on compensation for the lead. I have heard in most other states that such compensation per the DOI or law is not permissible or possibly illegal.
Hello there
You are absolutely correct that fee sharing in many professions with those persons who are not of the same profession is illegal (lawyers, doctors) -- however, I have not heard that such restrictions on Public Insurance Adjusters are widespread in the US (at least not yet) and have not found anything in AZ law regarding this -- and I also find it difficult to believe that this is illegal in AZ if this PA is disclosing it right in the contract (nothing hidden there). If this is illegal in AZ, then most courts would simply throw that particular provision of the contract out and if the rest of the contract is clear, legal and enforceable, then the court will most likely let the rest of the contract stand (and by enforceable I mean that there is nothing fraudulent or unscionable in there to the consumer -- so if that may be the case that is also a point that can be argued). If this fee-sharing is not permissible in AZ then the AZ Division of Insurance will be well aware of it and that is the place that you should check in with tomorrow on whether or not they have anything on the books or know of any law that prohibits this practice for PA's or other insurance industry employees in AZ.
--
MARY
Please rate below by pressing a 3, 4 or 5. If you press a 1 or 2 that will leave NEGATIVE feed back for me and I will receive no credit for this time. If you would prefer not to leave a rating please let me know and I will put the question back on the board for another attorney to pick up.
---MARY