On June 12, 2018, the Office of the Commissioner of Insurance of Puerto Rico (OCI) issued Ruling Letter No. CN-2018-241-D, Appraisal Procedures for Insurance Claims for Commercial Property Related to Catastrophic Events.

The letter states, in part:

The OCI hereby establishes the standards to be followed in appraisal processes in cases where there are disputes regarding the amount of the loss in the insurance claims for commercial property, including claims by divisions of the central government and municipalities, to encourage the use of alternative expeditious methods of resolving such claims.

The OCI has established that six requirements must be met before a dispute may to be referred to an appraisal process:

  1. A claim must have been submitted to the insurer.
  2. The insurer has acknowledged coverage for the loss being claimed.
  3. There is a dispute between the insurer and the insured or claimant regarding the amount of one or more items of the claim.
  4. The controversy regarding the monetary amount of the loss is related to a commercial property policy, including the policies of government agencies and divisions, whether of the central government or the municipalities (no other matters related to any other kind of controversy will be resolved).
  5. The Commissioner may, on the Commissioner’s own initiative, refer disputes regarding the amount of an insurance claim for commercial property or, under exceptional circumstances, insurance claims related to personal property, for an appraisal process.
  6. No legal action has been brought in any court with regard to the claim.

The Ruling Letter further explains the process for selection of an appraiser, fees for the appraiser and neutral umpire, initiation of the appraisal process, the appraisal process, meeting place, and scope and effect.

The goal of this appraisal process is to more quickly resolve commercial, central government and municipal insurance claims from Hurricane Maria. This is an informal, private and voluntary process. All oral or written information provided during the appraisal process, including the documents and work records of the appraisers, shall be confidential and privileged. The decision made in the appraisal process will not be binding, unless the parties agree in writing that it will be binding. Thus, this process does not substitute policyholders’ or insurers’ rights to have the claim resolved in court.

  • Ed F

    In other words, it seems completely useless if non-binding, with the exception of each party showing the other party their hand.

    My question is, since;
    “All oral or written information provided during the appraisal process, including the documents and work records of the appraisers, shall be confidential and privileged.”

    Does that prevent each party from sharing their information gathered with the seemingly inevitable Attorney that will eventually represent each party?

  • shirley heflin

    Dear Ms. Smith:

    The “requirements” that must be met during the Appraisal process in Puerto Rico pretty much seem like requirements that must be met in any insurance (contractual) dispute in most States. What I note is that this “Ruling Letter” does not address private insureds with their homeowner claims (i.e., structural, contents, dwelling, etc.).

    I’m just curious why this “Ruling Letter” is specifically addressed to commercial claims, yet says nothing about a little ole’ private Homeowner Insured trying to resolve their claims?

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL