Puerto Rico Condo Policy Revisions
The Chief Deputy Insurance Commissioner of Puerto Rico issued a Ruling Letter (CN-2020-285-D) regarding condominium insurance and the rights of the unit owners to insure units on their own behalf. The Ruling Letter went into effect immediately and applies to both new policies and renewals.
The Letter clarifies that, according to Section 62 of Act No. 129-2020, the Condominium Act of Puerto Rico, the authority granted to the Condominium Association to acquire insurance policies does not include, “determining, imposing, and/or covering under the master policy of the condominium the elements that are private and individual property of each apartment owner.” Instead, the verbiage contained in the Act demonstrates that it is illegal for condominium master policies in Puerto Rico to cover betterments and improvements; only bare wall policies are permitted. The only time a Condominium Association is permitted to include any of the borrower’s walls in/betterments and improvements is when the coverage is required by law; per the Ruling Letter, there is no such legal requirement.
Proctor encourages clients to review their internal insurance processing procedures to ensure policies will be handled accordingly. If Proctor provides insurance tracking services for your organization, Proctor is in the process of reviewing the impact of the Letter on Business Rules and will contact clients as required.
The complete Ruling Letter can be reviewed by following this link.
Proctor will continue to monitor this topic and provide updates as they occur.