Can Adjusters Earn Bonuses Ethically?

The question of performance-based compensation for adjusters was initially discussed in my column of Sept. 10, 2001. The question arose from a former adjuster, who wrote: "I believe the adjuster has to be free of financial interest in the outcome of a claim or there can be no confidence in the fairness of the system." We concluded that the comment was directed at bonus or incentive compensation, not at merit systems to evaluate insurance company adjusters for regular compensation and pay raises. Two types of performance-based systems were identified--those based on results, and those based on activities.