House committee hears opposing views on bill to remove insurer notice, set 33% attorney fee

The House of Representatives’ Comisión de Banca, Seguro y Comercio held a public hearing June 11 on House Bill 363, which would amend articles 27.164 and 27.165 of Puerto Rico’s Insurance Code (Law 77 of June 19, 1957, as amended and Law 247 of 2018). The bill would (a) eliminate the current requirement that an insured notify the Office of the Commissioner of Insurance (OCS) and wait 60 days before filing a civil action for certain unfair or bad‑faith insurance practices, and (b) set attorney fees at 33% of the amount recovered and extend fee awards to administrative forums and mediation processes.

Why it matters: Supporters said the current notice-and-wait regime has delayed access to courts, produced essentially no remediation in practice and left many insureds waiting years for payment after major disasters. Opponents warned the changes would encourage speculative litigation, raise insurance costs and threaten insurer solvency and market capacity, particularly for condominium coverage.

Key testimony and positions

- Perla Iris Rivera Guardiola, attorney for the Department of Justice, described the statutory and jurisprudential background and urged technical clarifications to ensure the Commissioner’s role is not unintentionally excluded from enforcement and oversight. Rivera noted the OCS’s existing investigatory and sanctioning authority under the Insurance Code and recommended removing the statutory cross‑reference to mediation in the attorney‑fee provision. (Department of Justice written memorandum and oral presentation.)

- Alexander Adams Vega, Commissioner of Insurance, told the committee that the 60‑day notice process created by Law 247 (2018) has in practice “been a futile exercise” and that the…