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Insurance Regulatory NewsOffice of the Insurance Commissioner of Puerto Rico Circular Letter CC-1962-D issued March 31st, 2020In an effort to curtail the spread of COVID-19 in Puerto Rico, on March 12th, 2020, the Puerto Rico Governor declared a State of Emergency followed by a March 15th, 2020 Executive Order (EO) imposing a lockdown/curfew and quarantine measures until March 30th, 2020. On March 31st, 2020, the Governor extended the EO through April 12th, 2020. On April 12th, 2020, the EO was once again extended until May 3rd, 2020. In accordance with the EO, the Office of the Insurance Commissioner of Puerto Rico’s (OIC) premises are closed while the OIC continues to handle certain matters that can be transacted online or remotely. OIC Circular Letter CC-1962-D issued on March 31st, 2020 extends most filing terms and deadlines, including the Annual Reports, by fifteen (15) calendar days after the date in which the Government resumes operations, as provided by EO. If the EO were to be lifted on that date, the filing terms extension would expire on May 18th, 2020. Puerto Rico House of Representatives Bill No. 2419, now Law No. 40-2020Puerto Rico House of Representatives Bill No. 2419, originally presented on February 27th, 2020 and enacted into Law No. 40-2020 on April 16th, 2020, clarifies insurers’ obligation to file an annual informative declaration with the Puerto Rico Treasury Department for every commercial client from whom it has received insurance premium payments after December 31st, 2019, which shall include certain specified information from each payor (e.g. amounts of premiums paid, employment identification number, contact information). Puerto Rico House of Representatives Bill No. 2038, now Law No. 42-2020On April 16th, 2020, Puerto Rico House of Representatives Bill No. 2038, was approved. Bill No. 2038 is now Law No. 42-2020. This Law adopts, almost verbatim, the Risk Management and Own Risk and Solvency Assessment Model Act (“ORSA”) of the National Association for Insurance Commissioners (NAIC). This Law creates a new Chapter 53 within the Puerto Rico Insurance Code titled Own Risk and Solvency Assessment. Puerto Rico Senate Bill No. 1496Puerto Rico Senate Bill No. 1496 was filed on February 10th, 2020. Among other things, this Bill seeks to amend Chapter 25 of the Puerto Rico Insurance Code, 26 L.P.R.A. § 2501 et seq, mandatory catastrophic insurance losses reserve. Among other measures it would amend subsection (7) of Article 25.020 of the Code, 26 L.P.R.A. § 2502, to increase the probability of occurrence of windstorm or seismic catastrophic events in Probable Maximum Loss (PML) models from 1 in 100 to 1 in 250 years. As of March 13th, 2020, Senate Bill 1496 was remitted to the P.R. Senate’s Rules and Calendar Committee. Puerto Rico House of Representatives Bill No. 2469Puerto Rico House of Representatives Bill No. 2469 was filed on March 31st, 2020, seeking to amend Article 27.161 of the Puerto Rico Insurance Code, 26 L.P.R.A. § 2716a, on unfair claims adjustment practices or actions, in order to require that during a national state of emergency declared by the Governor of Puerto Rico or the President of the United States of America as a result of a pandemic, no insurer shall deny coverage to its insureds under a commercial business interruption policy when the insured business owner is forced to close the insured business by an order that prohibits the offering of services to customers during the national state of emergency. The Bill has the support of all three political parties represented in the House but fierce opposition from the insurance sector as well as from the Office of the Insurance Commissioner of Puerto Rico which, in addition to opposing the Bill on constitutional grounds, has cited the NAIC’s position on the matter as per its March 25st, 2020, NAIC Statement on Congressional Action Relating to COVID-19. As of April 6th, 2020, the Bill is pending before the House Consumer Affairs, Banking and Insurance Committee. |
