Wednesday, September 6, 2017

Irma – Puerto Rico Claims Checklist

With the Imminent Arrival of Hurricane Irma in Puerto Rico, Insurers Should Keep in Mind the Following Claim Handling Requirements from the Puerto Rico Insurance Code 
  • Response to Notice of Loss – 15 Days. Acknowledge the claim in writing and commence investigation within 15 days. 26 L.P.R.A. §2714 
  • Provide the Insured with a Copy of the Policy – 10 Days. Insurer must provide a copy of the policy within 10 days of being requested to do so. 26 L.P.R.A. §2703a 
  • Investigation and Resolution of Claim – Less than 90 Days after Notice. The investigation, adjustment and resolution of any claim must be done in the “shortest reasonable period of time”, but no more than 90 days. 26 L.P.R.A. §2716b(1) 
  • Document Extension Needs. If a claim cannot be completed within 90 days the claim file should contain documents detailing the existence of just cause to exceed the 90 days. 26 L.P.R.A. §2716b(2) 
  • Resolution of a claim means the full payment of the claim, the written and duly justified denial of claim or closure of the claim for non-cooperation. 26 L.P.R.A. §2716c. 
  • If an insurer has “well grounded knowledge” of any fraudulent acts as part of a claim submission, the insurer is required to report that information to the Insurance Commissioner. 26 L.P.R.A. §2726 
Additional Considerations:
  • A reservation of rights should be issued as appropriate. 
  • Civil Authority – Mandatory evacuations may be issued in advance of Irma. 
  • Service Interruption – Power and telephone/cell service may be disrupted. 
  • Sue and Labor – Businesses may shut down operations in advance. 
  • Adjuster licensing – Puerto Rico requires all adjusters and public adjusters to be licensed in Puerto Rico. However, the Insurance Codes provide that no license from Puerto Rico shall be required of a nonresident independent adjuster for the adjustment in Puerto Rico of a single loss or of losses arising from a catastrophe common to all such losses. 26 L.P.R.A. §952(3). The Commissioner may also grant a special emergency permit as adjuster to any person qualified for adjusting losses arising from a general catastrophe after the presentation of the application for the special permit. 26 L.P.R.A. §952(4). 
  • Flood hazard zone areas—Areas identified on the Flood Insurance Rate Map can change so be aware of applicable policy limits by hazard zone. 
  • Flood and Wind sublimits.