Which of the following is true regarding the adjuster's actions as a fiduciary?

• A. The adjuster acts for the benefit of the principal.
• B. The adjuster benefits personally from all transactions.
• C. The adjuster does not have to disclose conflicts of interest.
• D. The adjuster is only responsible for their own financial gain.

Answer: (A)

The assertion that the adjuster acts for the benefit of the principal is correct because an adjuster has a fiduciary duty, which is a legal obligation to act in the best interest of another party—in this case, the principal, which typically refers to the insurer or the policyholder. The fiduciary relationship requires the adjuster to prioritize the interests of the principal above their own. This includes being honest, transparent, and fair in their dealings, ensuring that the principal's rights are protected and that any benefits derived from the process ultimately serve the interests of that principal.

In this context, the other options do not align with the principles of fiduciary duty. The adjuster is not allowed to benefit personally from transactions at the expense of the principal, nor can they ignore conflicts of interest or prioritize their own financial gain over the interests of those they represent. These principles set the foundation for trust and ethical behavior in the industry, assuring that the fiduciary relationship remains strong and effective.