(1) When a claim is settled where the insured is represented by a public adjuster, the insurer shall follow the direction of the insured, subject to the interests of any loss payee or mortgagee, as to who shall be named on the insurer’s check or checks by following the instructions in a direction to pay letter signed by the insured and filed with the insurer. The insurer shall not accept the direction to pay letter unless the letter is signed by the first named insured with regard to commercial claims and by all named insureds with regard to non-commercial claims, and the letter is consistent with Form 4 in section 25.13(d) of this Part.

(2) Upon the written direction of the insured, the insurer shall make its check payable to both the public adjuster and the insured, or to the public adjuster named as a payee, but not in excess of the amount of the public adjuster’s fee, as indicated in the written compensation agreement signed by the party to be charged and filed with the insurer, less any referral fee set forth in a disclosure statement made pursuant to section 25.6(e)(4) of this Part. The balance of the proceeds shall be made payable to the insured or any loss payee or mortgagee, or both, whichever is appropriate. If an insured does not submit a direction to pay letter to the insurer, then the insurer shall not make any check payable to the public adjuster.

(3) Any payment made to a public adjuster shall be only for those elements of the claim for which the public adjuster represents the insured.

(4) A direction to pay letter shall be valid for any payment made pursuant to a claim unless revoked by the insured. A direction to pay letter shall be revocable by any named insured at any time prior to the insurer issuing a check. If an insured revokes a direction to pay letter, then the revocation shall be in writing and signed by the insured. The insured shall submit the revocation to the insurer and provide the public adjuster with a copy.

(5) A public adjuster shall not condition doing business with an insured on the insured signing a direction to pay letter that directs the insurer to name the public adjuster on the check.