Bill: Insurers must provide explanations ahead of settlement payments
By John McPhaul
Reps. Jesús Manuel Ortiz, Ramón Luis Cruz, Héctor Ferrer, Estrella Martínez Soto and Orlando Aponte have filed House Bill 153, which prohibits insurance companies from settling a payment without first providing the insured with a detailed explanation, in writing and orally, on the scope and consequences of receiving the payment.
The settlement payment is a way to satisfy or settle an obligation. It allows a debtor to satisfy what is owed to the creditor, in common agreement, through a lower amount claimed.
“We all know that after Hurricane Maria and last year’s earthquakes, there have been many inconveniences that consumers have had with their insurance policies,” Ortíz said. “Many of them have seen the payments received in their claims for damages through the settlement payment figure dramatically decreased. This has led to court cases in which policyholders state that they were not provided with an adequate explanation about the scope of the payment.”
Martínez Soto, who chairs the Banking and Consumer Affairs Committee in the island House of Representatives, said “[t]he fact that no insurance company can extinguish an obligation through the figure of the settlement payment without first providing the insured with a detailed explanation in writing and orally about the scope and consequences of receiving the payment, will allow the insured to feel more confident when it comes to protecting their properties.”