House committee hears competing views on bill to ease bad-faith suits, set 33% attorney fee

San Juan — The House of Representatives Committee on Banking, Insurance and Commerce heard testimony June 11 on Proyecto de la Cámara 363, a bill to amend articles 27.164 and 27.165 of Puerto Rico's Insurance Code to (1) eliminate a mandatory prior notification to the Office of the Commissioner of Insurance before an insured can file a bad-faith or unfair-practices suit, (2) clarify that the statutory cause of action can be brought concurrently with other remedies, and (3) fix attorney fees at 33 percent of the recovery in favor of a prevailing insured.

Supporters said the bill would speed access to courts and strengthen remedies for homeowners and condominium associations that they say still suffer long delays after Hurricane Maria; opponents warned it would encourage meritless litigation, raise insurance costs and could be improperly retroactive.

The committee hearing combined legal and technical testimony. "La notificación requerida ante el comisionado ... resultó en un requisito formalismo que no tuvo ninguna consecuencia sobre el comportamiento de las aseguradoras," said Ignacio Veloz, president of the Federación de Condominios y Control de Acceso, summarizing condo owners' complaints that notifications produced no remedial action. Veloz told the committee that many condominium claims remained in court years after the 2017 storms and that some insureds accepted minimal…