Saturday, September 19, 2020

Stateside Public Adjusters Under Investigation After Hurricane Maria Claims

By on February 13, 2020

On left, Puerto Rico Insurance Companies Association President Iraelia Pernas (Cybernews)

SAN JUAN — The Puerto Rico Insurance Commissioner’s Office (OSC by its Spanish initials) announced Wednesday that it has opened 11 investigations into possible illegal acts committed by several public adjuster firms in the aftermath of Hurricane Maria, which struck in September 2017.

Most of these probes involve stateside entities that came to the island after the catastrophic storm, attorney Alexander Adams, in representation of OSC, said during a hearing by the House Consumer, Banking and Insurance Affairs Committee, chaired by New Progressive Party (NPP) Rep. Yashira Lebrón Rodríguez.

Adams said that among the firms being investigated by his office are Scott M. Favre Public Adjuster LLC, as well as others from states such as Mississippi, Texas and Florida.

Puerto Rico Insurance Companies Association President Iraelia Pernas confirmed the investigations.

“Most of the post-Maria claims that are still being elucidated have not been settled due to a pattern of improper conduct by public adjusters,” Pernas said in her testimony.

“There is no doubt that in the face of Maria’s emergency, some public adjuster firms, many of which are not from Puerto Rico, came here, not to help the people, but to enrich themselves with the misfortune of our people. In total, OCS issued 98 special permits for Independent Emergency Adjuster to people who did not reside on the island. Of these, there are many that are investigations for bad business practices. That is something that we will not allow to happen now with the earthquake claims from January,” said NPP Rep. Maricarmen Mas Rodríguez, author of House Resolution 1094, which was introduced in 2018 and orders the committee to investigate the practices of public adjusters on the island.

Mas Rodríguez, who represents District 19 in Mayagüez and San Germán, asked Adams about pending claims involving offshore public adjusters under investigation, to which he responded that most involve state and municipal government facilities. He said Scott Favre obtained his first contract with the government only four days after incorporating the firm in Puerto Rico.

According to the commonwealth State Department Business Registry, the firm in question, based in Mississippi, was authorized to do business on the island on Nov. 14, 2017. On Nov. 18, the firm obtained a contract (No. 2018-000080) with the Government Employees Retirement Systems Administration.

“The Insurance Commissioner’s office told us that of the 293,000 claims related to Hurricane Maria damages, some 3,000 are still being litigated and that many of these are being litigated for public adjuster estimates that were irresponsible,” Lebrón Rodríguez said. “This is a practice that cannot be allowed to continue, especially now.”  

Both lawmakers said they will soon announce measures to establish stricter controls on public adjusters, including caps on commissions received by public adjusters and adding more teeth to rules for sanctioning these firms.

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