Puerto Rico insurance commissioner sends auditors out to address payment delays
SAN JUAN – Nearly 80 days after Hurricane María ravaged Puerto Rico a Carolina homeowner said he was frustrated since he is still living with relatives because his property insurance company has yet to pay him the money he needs to repair his severely damaged residence.
The owner of a midsize clothing store said he is about to “hang up his gloves” and leave Puerto Rico, all because his insurance company had yet to pay him the insurance money to repair the property and make other payments to resume operations. The business owner, who did not want to be identified or say name the insurer so as not to affect his claim, said his store virtually lost its roof.
“I don’t have money to pay employees,” he said. “My life is done here.”
Neither one of the two individuals have filed a claim with the the Insurance Commissioner’s Office.
However, Puerto Rico Insurance Commissioner Javier Rivera sent auditors to the streets Tuesday to monitor the work of eight of the island’s largest insurance companies amid complaints over delays in the processing of claims.
“We are monitoring. We aren’t looking to fine or to point anyone out, but to learn about how the event is being handled,” Rivera said in an interview from Hawaii, where he was attending the National Association of Insurance Commissioners and was advocating for the elimination of a sales tax on health insurance (called the HIT tax by opponents).
The insurers that were visited by auditors included Mapfre, Universal Insurance, the Cooperatives Supervision & Insurance Corp. (Cossec by its Spanish acronym), and Integrand. Rivera said they were chosen for having the greatest number of business claims.
Although Rivera said some 25 official complaints were filed in his office, he said his office receives up to 40 calls a day from property owners complaining about delays with their claims.
“We are acting now,” he said.
The Insurance Code states that claims must be processed within 90 days. However, after Hurricane María, Rivera issued Normative Letter 220D, shortening the processing period for claims filed by certain businesses such as supermarkets, gas stations, hospitals, restaurants and manufacturing companies. The letter included what is known as business interruption insurance, a policy that covers financial losses.
“In that normative letter, we emphasized that [the insurer] had to answer the claim within 15 days. The payment, whether total or partial, must be issued within 10 days. What we wanted was to give an incentive for businesses to recover,” Rivera Ríos said.
More than 130,000 insurance claims have been lodged since the hurricane hit. Of these, some 35,000 were filed by business owners and more than 95,000 by homeowners. These numbers are expected to rise. They are also much higher than the number of insurance claims filed after Hurricane Georges in 1998. At that time, 24,596 claims were filed for damages to businesses, 64,482 for houses and 1,238 for condominiums.
When insurance companies have an excessive number of claims, they hire claims adjusters from the U.S. mainland or abroad to help out temporarily. In the case of adjusters from foreign countries, the Insurance Commissioner’s Office announced in a letter that it would not provide permits for temporary business visas (B1 and B2), which several insurance companies said delayed the processing of claims. However, the office later issued another letter eliminating the requirement after consulting with the Department of State.
Although Rivera Ríos said in a recent interview that some insurance companies have advanced more than $20 million to businesses, he is now planning to intervene to speed up insurance payments to those in need.