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PS 1055

Para enmendar el Código de Seguros de Puerto Rico, Ley Núm. 77 de 19 de junio de 1957, según enmendada, a fin de establecer guías voluntarias para la oferta de seguros paramétricos contra desastres naturales; promover pagos automáticos basados en factores predefinidos para mitigar impactos económicos sin costos adicionales al erario ni obligaciones mandatorias a las aseguradoras o consumidores; y para otros fines relacionados.

2025-2028 Session

Establishes voluntary guidelines for parametric disaster insurance in Puerto Rico with automatic trigger-based payouts to accelerate post-disaster recovery without mandating insurer participation or government costs.

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Bill Summary · PS 1055

Legislative bill overview

Bill PS 1055 amends Puerto Rico's Insurance Code (Law 77 of 1957) to establish voluntary guidelines for offering parametric insurance products against natural disasters. The bill promotes automatic payments triggered by predefined physical factors (like wind speed or rainfall levels) rather than individual loss assessments, without creating mandatory obligations for insurers, consumers, or additional government expenditures.

Why is this important

Puerto Rico faces repeated hurricane and disaster risks, making innovative insurance products critical for economic resilience. Parametric insurance can accelerate payouts to affected residents and businesses—traditionally, claims processing takes months, leaving communities without immediate recovery funds. This framework could increase insurance availability while allowing the private market to develop these products voluntarily.

Potential points of contention

  • Market development uncertainty: Voluntary guidelines may not incentivize insurers to actually offer parametric products if profitability concerns exist; without mandates, coverage gaps could persist in vulnerable areas
  • Consumer protection gaps: Parametric policies pay based on disaster triggers, not actual losses—a homeowner might receive insufficient compensation if their specific property sustained less damage than the trigger threshold suggests
  • Regulatory clarity: The bill lacks detail on how "predefined factors" will be established, monitored, and adjusted, potentially creating disputes between insurers and policyholders over trigger definitions and payout accuracy

Compiled from official sources — confirm details with the bill’s official record.

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