GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS

OFFICE OF THE LIEUTENANT GOVERNOR

DIVISION OF BANKING, INSURANCE AND FINANCIAL REGULATION



WHEE KRKEREKEKKEKEE



Order No. 2017-04



AMENDED EMERGENCY ORDER



WHEREAS, on September 6, 2017, the United States Virgin Islands was severely

impacted by Hurricane Irma, a Category 5 windstorm that ravaged primarily St.

Thomas and St. John; and



WHEREAS, thirteen days later on September 19, 2017, the United States Virgin

Islands was severely impacted by yet another Category 5 windstorm, namely

Hurricane Maria which ravaged primarily St. Croix: and



WHEREAS, the combined forces of Hurricanes Irma and Maria, made travel

availability non-existent whether by air or by sea and further, left the Territory void

of communications connectivity; and



WHEREAS, while the lack of travel availability and communications connectivity

for approximately forty days after Hurricane Irma and about three weeks after

Hurricane Maria made it extremely difficult for insurance companies to bring in

claims adjusters, and made it difficult for claims adjusters to reach claimants,

these conditions eased shortly thereafter, allowing claims adjusters to actively

begin and complete the adjustment of claims throughout the Territory; and



WHEREAS, Section 51(a) of Title 22, Virgin Islands Code authorizes the Lieutenant

Governor to serve as Commissioner of Insurance and the Division of Banking,

Insurance and Financial Regulation (“DBIFR”) pursuant to Section 35 of Title 3,

Virgin Islands Code, is an administrative agency within the Office of the Lieutenant

Governor, with a dual function of both insurance regulation and consumer

protection; and



WHEREAS, the terms as used in this Order have the following meaning:



(1) “Adjusted” means the process of inspecting and investigating a claim

and providing a recommendation of a final settlement option based on

estimates of damages and insurance policies held;

Amended Emergency Order No. 2017-04

December 8, 2017

Page 2 of 5



(2) “Aged claim” means a claim that was inspected and Investigated by

an adjuster in excess of thirty (30) days from the date of the claim filing;

however, during the interim, no communication was made to the claimant

of the need for additional information nor a denial or acceptance of

liability has been made:



(3) “Claimant” means a policyholder making a request for insurer

remittance of payment due fo loss incurred and covered under the policy

agreement;



(4) “No communication” means no written or verbal discourse between the

Independent adjuster and the claimant and the insurer or the claimant

during the claim handling process;



(5) “Notice” means an acknowledgment (either written or verbal) from the

insurer to the claimant that a first-party filling has been received;



(6) “Policyholder” means the holder of a written insurance coniract (also

known as insurance policy), who has the right to exercise the rights stated

in the contract;



(7) “Proof of claim” means any written evidence or documentation in the

possession of the insurer, whether as a result of having been submitted by

the claimant or obtained by the insurer in the course of its investigation, that

provides any evidence of the claim and that reasonably supports the

magnitude or the amount of the claimed loss; and



WHEREAS, this Order is being issued because the Commissioner of Insurance has

found that while many claims have been adjusted by Independent adjusters and

in-house adjusters throughout the Territory, the DBIFR has received numerous

complaints from claimants about significant delays in the claim handling process;

and



WHEREAS, more specifically, claims were inspected and investigated by an

adjuster on behalf of the insurer in excess of thirty days ago from the date of the

claim filing, yet no communication has been made to the claimant to explain the

status of the claim or the reason for the delay; and



WHEREAS, it should be noted, this Order does not in any way affect the legislative

intent of Section 228 of Title 22, Virgin iskands Code governing Payment of Claims,

which is the final stage of claim handling; rather, this Order addresses omissions at

the beginning stage of claim handling; and



WHEREAS, Section 228 provides “an insurer shall have thirty (30) calendar days

from the date on which an agreement to settle is signed or a proof of claim had

Amended Emergency Order No. 2017-04

December 8, 2017

Page 3 of S



been filed, whichever comes last, to make payment of all sums due under an

insurance policy’: and



WHEREAS, many insurance claimants are also in need of the Federal Emergency

Management Agency’s (“FEMA”) disaster assistance to cover dwelling and/or

content damages not covered in their private insurance policy; and



WHEREAS, in accordance with Section 206,109 of Title 44 of the Code of Federal

Regulation, FEMA will not duplicate benefits received from any other source; and



WHEREAS, Section 206.113 of Title 44 of the Code of Federal Regulation provides

FEMA makes this determination by requiring insured applicants to provide

documentation that identifies their insurance settlements or benefits before FEMA

will consider their eligibility for categories of assistance that may be covered by

private insurance; and



WHEREAS, Title 22, Virgin Iskands Code does not provide a specific timeframe in

which an insurer is required to acknowledge receipt of notification of a first party

claim; and



WHEREAS, Title 22, Virgin Iskands Code also does not provide a specific timeframe

in which an insurance company must affirm or deny liability on all first-party

property damage claim once an insurance claim Is filed by a policyholder and

the property inspected by an adjuster; and



WHEREAS, Tifle 22, Virgin Islands Code does not provide a time frame to notify

claimants that more time is needed to determine whether a first-party property

damage claim should be accepted or denied, or require insurers to provide the

reasons that more time is needed and an estimate of additional time needed to

establish liability; and



WHEREAS, other jurisdictions have a consumer bill of rights that require a specific

time period for each process of claim handling and a similar Virgin Islands

consumer bill of rights has not yet been enacted; and



WHEREAS, the DBIFR is currently developing Rules and Regulations (“Rule”)

governing the processing of claims for a first or third-party claimant which cannot

be retroactively applied; and



WHEREAS, the purpose of this Order is to provide procedures for the expeditious

and efficient settlement of first -party claimant's property damage claims; and



WHEREAS, there is an emergency need for the issuance of this Order, in the

absence of an enacted consumer bill of rights and promulgated Rule and thus,

Amended Emergency Order No. 2017-04

December 8, 2017

Page 4o0f5



in the interest of first-party claimants in the Virgin Islands, the Commissioner of

Insurance is executing this Order to safeguard and protect insureds in the Territory.



NOW, THEREFORE, pursuant to the authority of the Commissioner of

Insurance, as provided In Section 54 of Title 22, Virgin Islands Code, It is hereby



ORDERED, fhat an insurer within fifteen (15) business days of receiving a

notice of a first-party claim shall acknowledge, either verbally or in writing, receipt

of the claim; and



FURTHER ORDERED, that an insurer within thirty (30) calendar days of an on-

site inspection of first-party claim and the claimant submittal of required

documentation in support of the claim being made shall accept or deny claim;

and



FURTHER ORDERED, that if a determination cannot be reached in that thirty

(30) days, an additional 15 days (which extends the period to forty-five days) may

be permitted, if the insurer provides reasonable basis supported by specific

information to the claimant and the DBIFR for the extension; and



FURTHER ORDERED, where an insurer has received and accepted the

adjuster’s final report or a sworn proof of loss or estimate, 30 days ago or more,

the claim must be settled with fifteen (15) days or the insurer must submit written

notice to the claimant with a copy to DBIFR, as to why a settlement cannot be

made in fifteen (15) calendar days; and



FURTHER ORDERED, if settlement cannot be reached in that fifteen (15) days,

the insurer, by notifying the claimant with a copy to the DBIFR, may request

additional time to accept or deny the claim. The notification must set out the

specific reasons the insurer requires additional time to investigate the claim; and



FURTHER ORDERED, that this Order applies only to residential claims filed



because of damages caused by Hurricane Irma and Hurricane Maria in Year

2017; and



FURTHER ORDERED, that failure of an insurer to do so may result in

administrative action by the Commissioner of Insurance; and



FURTHER ORDERED, that in accordance with Section 151 of Title 22, Virgin

Islands Code, an insurer may request a hearing before the Commissioner of

Insurance within 10 days of receipt of this Amended Emergency Order

(December 21, 2017) to show cause why this Order should not remain in effect:

and

Amended Emergency Order No. 2017-04



December 8, 2017



Page 5 of S



FURTHER ORDERED, that a copy of this Amended Emergency Order shall be



served on Property and Casualty insurers licensed and authorized by the



Commissioner of Insurance to conduct insurance business in the United States



Virgin Islands.



Dated: December [2701 7



Osbert E. Potter



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Lieutenant Governor/



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Commissioner of Insurance



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