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  • Writer's pictureThe San Juan Daily Star

Judge: Gov’t must include check option as reimbursement method for car insurance overpayments

U.S. District Judge Laura Taylor Swain

By The Star Staff

U.S. District Judge Laura Taylor Swain has taken steps to force the island government to pay some $76 million to more than 83,000 people who double paid for their car insurance premiums.

In an order this week, Swain, who is the presiding judge in Puerto Rico’s Title III bankruptcy cases, ordered the commonwealth government to allow claimants to choose between a check or bank transfers to receive their payments.

The government has insisted on paying by electronic transfer even though it doesn’t have most claimants’ bank account information. The judge gave the commonwealth a chance to solicit bank account numbers and contact information.

The order stems from a class action suit in which the plaintiffs asked the court to compel enforcement of the terms of a federal settlement agreement entered into between the plaintiff-class and the commonwealth on Feb. 29, 2016, in U.S. District Court.

According to the stipulation, the members of the plaintiff-class are to be reimbursed for duplicative payments they made for compulsory vehicle insurance. Although 83,536 claims have been approved, as far as the court is aware, no reimbursements have been made because the commonwealth takes the position that payments should be made by electronic funds transfer and not by mail, and the commonwealth does not have banking information for the class members to make such payments, the order said.

“There is no dispute as to the amount of overpayment(s) made in connection with each Approved Claim,” the plaintiffs said. “As explained below, the Commonwealth has solicited the necessary claimant banking information through generalized traditional and social media advertising and a posting on one of its websites, but has received few responses.”

The court, Swain said, finds “that the commonwealth has violated the terms of the stipulation by requiring additional banking information from the class members as a precondition to payments and thereby delaying the issuance of payments.”

The plaintiffs had charged that the commonwealth double charged for mandatory vehicle insurance payments in 2010 and earlier. The commonwealth owes around $76 million in reimbursements for the overpayments. The litigation has been ongoing for two decades.

The case is Gladys-Garcia Rubiera, et al v. Fortuno.

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