Mike Koziol, assistant vice president and counsel for the Property Casualty Insurers Association of America, said industry representatives made the case there is no contractual relationship between public adjusters and insurers.

"Since the only contract that exists is between the public adjuster and the insured, the insurance company should not be burdened with checking to see if the public adjuster is properly licensed," he noted.

About half the states currently have licensure requirements for public adjusters, and regulators felt a model law would encourage more states to take such action.

Last year another NAIC panel attempted to put forth a model law dealing with licensure of staff adjusters. The industry, however, fought that vigorously, asserting that the regular complaint and market conduct process could take care of whatever disputes and abuses arose in that area.

With the removal of insurance companies from the mix in the current proposed public adjuster model, Mr. Koziol said the industry probably would not take much interest in its further development.

For public adjusters, the main sticking point seems to be the provision that restricts fees to 5 percent of the first $25,000 and 15 percent of the amount exceeding that figure.