Where Does a Loss Adjuster’s Authority End?

Loss adjusting is inherently multidisciplinary. A claim may involve audited financial statements, medical reports, engineering assessments and other information produced by licensed professionals.

Within the Kuwaiti regulatory framework, this raises an important question:

What happens when a loss adjuster disagrees with a determination made by another licensed professional?

The Right to Challenge Is Not the Authority to Replace

A loss adjuster is entitled to scrutinise information presented in support of a claim, question its basis, request clarification and seek further professional evidence.

However, the authority of a loss adjuster ends where the legally regulated authority of another profession begins.

Consider two simple examples. Under Law No. 103 of 2019 concerning the Practice of the Auditing Profession, auditing in Kuwait is a regulated profession. If audited financial statements prepared by a licensed auditor determine that no provision is required for slow moving inventory, a loss adjuster may challenge that conclusion but cannot impose an accounting provision of their own. Similarly, an adjuster may question a medical diagnosis but cannot substitute their own diagnosis for that of a licensed physician.

We encountered a similar situation in one of our own theft claims. We had serious doubts as to whether the reported theft had occurred, despite an earlier decision to close the reported case. Rather than exceeding our authority by determining ourselves that the incident was fraudulent, we presented our information and evidence to the Ministry of Interior as the competent authority. The Criminal Investigation Department reopened its investigation, which ultimately resulted in those responsible admitting that the theft had not occurred. The matter was reclassified as a false report, and the insurance claim was closed without payment.

In all these situations, the issue is not whether the loss adjuster’s concern is justified. It is who is legally authorised to make the determination or decision.

Professional Boundaries Are Legal Boundaries

Professions such as auditing and medicine are regulated by laws that restrict their practice to appropriately licensed persons and provide consequences for those who practise them without the required authority. Loss adjusting is no different. In Kuwait, the adjustment of insurance losses is itself a regulated professional activity within the insurance regulatory framework.

Accordingly, where a loss adjuster disputes a determination falling within another licensed profession, the challenge must remain within the legal framework governing that profession. The adjuster may seek another appropriately licensed professional opinion or challenge the original determination through the competent regulatory authority. What the adjuster cannot do is bypass that framework and make the professional determination themselves.

The principle is therefore straightforward:

A loss adjuster may challenge the work of another licensed professional. The loss adjuster cannot assume that professional’s legally regulated role in order to replace it.