Puerto Rico Insurance Commissioner intervenes with Integrand Assurance
Issues order to curb insurer’s spending, requiring monthly financial reporting
SAN JUAN – The Puerto Rico Insurance Commissioner’s Office (OCS by its Spanish initials) said that, in accordance with Rule 94 of the Insurance Code Regulations, known as “Standards and authority of the Insurance Commissioner with respect to Insurers presenting an Adverse Financial Condition,” the agency presented an order against Integrand Assurance Co. to suspend its acceptance of new businesses regarding catastrophic risks in commercial and personal property insurance, and limit the subscription of business for such risks only to renewals of existing policies and other lines of business.
“As we know, stemming from the impact of hurricanes Irma and María, and with special importance on the part of the governor, Ricardo Rosselló, that the interests of policyholders are safeguarded, our Office has been closely monitoring the financial solvency and operations of the main property and contingency insurers,” Commissioner Javier Rivera Ríos said in a release issued by his office.
Rivera explained that the order also annuls fee payment increases notified to producers and representatives, suspends the declaration and payment of any kind of dividends, and that the company must submit to OCS, in addition to regular financial reports, interim financial reports on a monthly basis. In addition, the insurer must document the “sufficiency of the rate levels in relation to the insured risks,” the release reads.
“Although, at the moment the financial condition of Integrand Assurance Company is not a situation of insolvency or diminished capital, the financial reports and audits carried out show it is in a financial condition of care that, if no corrective action is taken, could worsen and lead to future insolvency or reduced capital, to the detriment of policyholders, creditors and the public interest,” Rivera added.
At the end of 2018, Gov. Rosselló enacted six laws that extend the of policyholders. Act 242, which mandates the appraisal process before an impartial arbitrator; Act 243, which requires that insurers, amid a state of emergency, proceed with the issuance of partial claim payments or advances until the claim is resolved; and Act 244 requires insurers to have a response plan that guarantees the continuity of services in an emergency event.
Act 245, meanwhile, allows qualifying surplus lines insurers to cover specific commercial risks. Act 246 establishes a lower cost coverage with defined benefits, known as microinsurance, which, in the event of a catastrophic event, would allow policyholders to receive a predetermined payment without going through the claim adjustment process. “Lastly, Act 247 creates a new cause of action for cases where the insurer has not acted in good faith or the handling of the claim was unreasonable,” the OCS release reads.
Rivera added that his “office remains vigilant and alert to the financial stability of the entire industry and we are focused on enforcing our fiduciary duty protecting the public interest….”