Regulator: P.R. insurers have paid $2.5B+ in claims, advances

Written by  //  June 8, 2018  //  Financial District, Insurance  //  No comments

From left: Mortimer Vélez, vice president of underwriting of One Alliance Insurance Co. and Iraelia Pernas, executive director of ACODESE.

Puerto Rico’s property and contingency insurers have paid more than $2.5 billion in claims and advances to the local policyholders for damages following hurricanes Irma and María as of April 30, 2018, the Office of the Insurance Commissioner confirmed.

Of that amount, nearly $2 billion was paid out by members of the Puerto Rico Association of Insurance Companies (ACODESE, as it is known for its initials in Spanish,) representing the closing of 87 percent of claims, said Iraelia Pernas, executive director of the trade group.

ACODESE members are: Antilles Insurance Company, Caribbean American Property Insurance Company (Assurant), Chubb Insurance Company, Cooperativa de Seguros Múltiples de Puerto Rico, MAPFRE PRAICO Insurance Company, One Alliance Insurance Corporation, QBE Seguros, Real Legacy Assurance Company, SIMED, United Surety and Indemnity Company (USIC) and Universal Insurance Company.

“We recognize there are about 15 percent of claims remaining to be adjudicated and we’re working hard in this direction, but it’s important to highlight that within the universe of more than 250,000 claims that were submitted, those that remain to be resolved are the most complex,” she said.

“This is because it requires a lot of analysis and expertise to be able to pay what is fair and reasonable, according to the insured’s policy,” Pernas said.

When broken down, 33 percent of residential property claims were closed without payment and 54 percent of claims submitted were closed with $563 million in payments. In the case of commercial property, 38 percent of the claims were paid, representing some $1.3 billion in disbursements, and 26 percent of the claims were closed without payment.

Regarding claims from the United Retailers Association about complaints from its members, specifically small and mid-sized businesses, still waiting to be reimbursed, Pernas said an agreement has been reached between the trade groups to address the issues.

Through the agreement, the CUD (as the Retailers group is known in Spanish) will refer specific problems to ACODESE, which will channel them to the corresponding insurer, she said.

“The interest of ACODESE partners is to resolve each case on its merits, explain the reason for coverage denials — if applicable — and the application of deductibles and other claim issues,” Pernas said.

“The fundamental thing is that each insured party receives what they are entitled to from their insurer, according to their policy,” Pernas said.

During a news conference, the executive said Hurricane María represented the biggest challenge for the insurance sector.

Hurricane Georges generated $1.2 billion in claims in 1998, which took two years to process and pay out, she said.

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