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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3702/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3702 - Joint Underwriting Association and operation plan
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3702 - Joint Underwriting Association and operation plan
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(1) There is hereby created an Association for the Joint Underwriting, comprised by all the authorized insurers, or those that may be authorized in the future, to write, and which do write in Puerto Rico, directly, fire and allied lines insurance, including the insurers of such hazards through multi-hazards policies (package policies), covering residential or commercial buildings. Each one of such insurers shall be a member of the Association and shall continue being a member of such Association, as a condition for its continued authorization to write any kind of insurance business in Puerto Rico.
(2) The Association shall have, in accordance with the provisions of this chapter and of the operation plan and in respect to fire and allied lines insurance on insurable property, power, on behalf of its members to:
(a) Cause to issue, or issue, insurance policies to applicants;
(b) assure reinsurance from its members, and
(c) cede reinsurance.
(3)
(a) Within forty five (45) days after the effective date of this act, the directors of the Association shall submit to the Commissioner, for his consideration, a plan of operation, consistent with the provisions of this chapter, which shall provide for an economical, fair and nondiscriminatory administration, and for the fast and efficient marketing of the fire and allied lines insurance, which, for the benefit of the general welfare and security of the property owners, may permit a fair distribution of the insurable risks. This plan must contain provisions regarding, but not limited to:
Preliminary contribution by all of its members for the initial expenses needed to commence operations; the establishment of the necessary facilities; the administration of the Association, the contribution of its members to finance losses and expenses; commissions, reasonable and objective underwriting rules, acceptance and cession of reinsurance and procedures to determine the maximum limit of insurance which shall be provided.
[(b)] This plan of operations may also provide that the policies contain a clause requiring the insureds, to take special security measures after such conditions are approved by the Commissioner.
(c) The plan of operations shall be subject to the approval of the Commissioner, after consulting with the persons or organizations affected, and shall become effective ten (10) days after having been approved. If the Commissioner does not approve the plan, in whole or in part, the Directors of the Association, within the following fifteen (15) days of the notice of such disapproval, shall submit the plan, or the objected part thereof amended and revised, and if they fail to submit a new proposal, or if such proposal is not acceptable, the Commissioner shall promulgate his own plan of operations or the corresponding part of it, as the case may be.
(d) The Directors of the Association may, on their own initiative, or at the request of the Commissioner, amend the plan of operations, subject to the approval of the Commissioner.
History —Ins. Code, added as § 37.020 on June 14, 1968, No. 85, p. 152; May 25, 1973, No. 39, p. 107, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3703/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3703 - Procedures
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3703 - Procedures
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(1)
(a) Every person who has an insurable interest in an insurable property, who shall have diligently made an effort, in the regular insurance market to obtain fire and allied lines insurance from more than one authorized insurer, shall have the right, on or after the date the plan of operation becomes effective, to request such coverage from the Association. The application can be made directly by the applicant or through a producer authorized by him.
(b) If the Association may determine that:
(A) The property is insurable, and
(B) that no premiums are owed, except those that have been objected to in writing within thirty (30) days after the invoice has been presented for collection the Association, once it has received the payment of the premiums for the policy or that part which may be required by the plan of operations, shall issue an insurance policy for fire and allied lines for the term of one year.
(2) Each member of the Association may cede to the Association fire and allied lines insurance covering insurable properties, in accordance with the terms and conditions established in the plan of operations.
(3)
(a) The rates, rating plans and rating rules applicable to the insurance written by the Association, and the statistical records related with same, shall be subject to §§ 1201–1240 of this title, except when otherwise provided for in this chapter.
(b) The rates, rating plans and rating rules applicable to insurance written by the Association, shall be in accordance with the rates periodically filed with and approved by the Commissioner of Insurance, for the risks rated by the rating organization for the hazards of fire and allied lines in Puerto Rico and applicable to such insurance.
The filed rules and rating plans, in regard to the plan of operation, may provide rules for the application of surcharges for risks which have unsafe and dangerous conditions. Such rules and rating plans shall provide for the prompt elimination of the surcharges upon the elimination of the unsafe and dangerous conditions.
History —Ins. Code, added as § 37.030 on June 14, 1968, No. 85, p. 152; Jan. 19, 2006, No. 10, § 9, eff. 120 days after Jan. 19, 2006.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3704/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3704 - Participation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3704 - Participation
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(1) Every insurer, member of this Association, shall participate in its underwritings, expenses, profits, losses, and liabilities in the proportion that the net direct premium of each member (excluding the portion of premiums that shall correspond to the operations of the Association), written during the preceding year, bears to the total direct net premiums written in Puerto Rico by all the members of the Association in the said year, for the hazards of fire and allied lines.
(2) The Association shall be governed by a Board of seven (7) Directors, elected by cumulative voting by the members of the Association, whose votes in such election shall be valid, in accordance with the direct net premiums underwritten by each member during the preceding year. At least one (1) of the Directors shall be an individual who is not employed by nor affiliated to any insurer, producer, general agent, insurance consultant, or any other producer or authorized insurance entity in Puerto Rico. The Board shall be elected annually at a meeting of the members or their authorized representatives, on the date and place to be designated by the Commissioner. The first Board shall be elected within fifteen (15) days after the effective date of this act, on the date and place designated by the Commissioner.
(3) Neither the Board of Directors of the Association nor its directors shall personally or individually incur any economic liability whatsoever for any action taken in the discharge of their duties and powers under this chapter, which in the case of member insurers shall mean both the insurer and its representative before the Board of Directors, nor the officials of the association, provided they do not act in violation of their fiduciary duties towards the administration, nor act intentionally to cause harm or knowingly that they may cause some harm.
History —Ins. Code, added as § 37.040 on June 14, 1968, No. 85, p. 152; May 6, 1983, No. 35, p. 58; Dec. 29, 2000, No. 462, § 2; Jan. 19, 2006, No. 10, § 9, eff. 120 days after Jan. 19, 2006; Apr. 13, 2014, No. 38, § 1, eff. 30 days after Mar. 14, 2014.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3705/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3705 - Appeals to the Commissioner
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3705 - Appeals to the Commissioner
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Any person who applies for insurance to the Association and any person insured in accordance with this chapter, or his representatives, or any insurer affected, may appeal to the Commissioner within thirty (30) days after being notified of any order, action or decision of or on behalf of the Association.
History —Ins. Code, added as § 37.050 on June 14, 1968, No. 85, p. 152.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3706/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3706 - Privileged communications
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3706 - Privileged communications
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(1) The reports from inspection made by or on behalf of the Association, shall be available to the members of the Association, the Commissioner and, with respect to their own applications, to the applicant for insurance.
(2) Neither the Association, nor its agents or employees, nor the insurers, nor the Commissioner or his authorized representatives shall be held responsible for statements made by them in good faith in any report or communication on risks insured or to be insured by the Association, or on administrative hearings in relation to same.
History —Ins. Code, added as § 37.060 on June 14, 1968, No. 85, p. 152.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3707/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3707 - Reports
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3707 - Reports
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The Association shall present annually to the Office of the Commissioner of Insurance, on or before March 31 of each year, or at a later date set by the Commissioner, a report of the transactions, conditions and operations made during the year. This report shall contain the material and information as the Commissioner may prescribe, and shall be in the manner approved by him.
The Commissioner may at any time require from the Association, additional information on its transactions, conditions or any other matter connected therewith necessary for the evaluation of the scope, operation and experience of the Association.
History —Ins. Code, added as § 37.070 on June 14, 1968, No. 85, p. 152.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-37/3708/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708)›§ 3708 - Examinations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 37 - Joint Underwriting Association for Fire and Allied Lines Insurance (§§ 3701 — 3708) › § 3708 - Examinations
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The Commissioner may examine the business of the Association whenever he deems it necessary. These investigations and inspections shall be made in accordance with the methods provided by this Code.
History —Ins. Code, added as § 37.080 on June 14, 1968, No. 85, p. 152.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3801/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3801 - Content
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3801 - Content
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This chapter comprises the provisions concerning the Puerto Rico Miscellaneous Insurance Guaranty Association.
History —Ins. Code, added as § 38.010 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3802/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3802 - Purpose
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3802 - Purpose
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The purpose of this chapter is to create a mechanism for the payment of covered claims under certain insurance policies in order to prevent excessive delays in payment, avoid financial losses to claimants or policyholders as a result of the insolvency of an insurer, help to detect and prevent the insolvency of insurers, and establish an association to access the cost of this protection among insurers.
History —Ins. Code, added as § 38.020 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3803/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3803 - Coverages
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3803 - Coverages
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This chapter shall apply to all types of insurance, except reinsurance, but shall not apply to:
(1) Life or disability insurance.
(2) Mortgage guaranty, financial guaranty and other forms of insurance that offer protection against investment risks.
(3) Guaranty insurance, except fidelity bonds which secure the probity of public employees.
(4) Warranty or service contract insurance.
(5) Title insurance.
(6) Ocean maritime insurance.
(7) Any transaction or combination of transactions between a person (including the affiliates thereof) and an insurer (including the affiliates thereof) which involves the transfer of credit or investment risks, which is not accompanied by a transfer of insurance risk.
(8) Any insurance provided or guaranteed by the government.
History —Ins. Code, added as § 38.030 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3804/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3804 - Interpretation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3804 - Interpretation
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This chapter shall be liberally construed to attain the purpose established in § 3802 of this title, which shall serve as an aid and guide in the interpretation of this chapter.
History —Ins. Code, added as § 38.040 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3805/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3805 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3805 - Definitions
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As used in this chapter:
(1) Account.— Means any of the two accounts created by § 3806 of this title.
(2) Affiliate.— Means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under the common control of an insolvent insurer as of December 31 of the year immediately preceding the date on which the insurer becomes an insolvent insurer.
(3) Claimant.— Means any insured who files a first party claim or any person who files a public liability claim. No person affiliated with the insolvent insurer shall be a claimant.
(4) Association.— Means the Puerto Rico Miscellaneous Insurance Guaranty Association created pursuant to § 3806 of this title.
(5) Control.— Means the direct or indirect possession of the power to direct or induce the direction of the management and public policy of a person, whether through the control of voting stock, or through a contract that is not commercial in nature, for properties or services that are not managerial, or otherwise. The power that results from the position of an official or a corporate office held in that capacity by the individual, shall not be deemed as control. It shall be presumed that there is control of a person, directly or indirectly, owns, controls, holds with a right to vote or holds proxies representing five percent (5%) or more of the voting stock belonging to any person. This presumption may be rebutted with proof that said control does not, in fact, exist.
(6) Covered claim.— Means an unpaid claim, including one for unearned premiums which arises from and is within the coverage, and which is subject to the applicable limits of a insurance policy to which this chapter is applicable, which has been issued by an insurer pursuant to the provisions of this title, if said insurer becomes an insolvent insurer after the effective date of this act, and when:
(a) The claimant or insured is a resident of Puerto Rico at the time in which the event against which he is insured occurs. For entities that are not an individual, the residence of the claimant or of the insured is the state where his main place of business is located at the time the insured event occurs, or
(b) the property from which the claim arises is permanently located in Puerto Rico.
Covered claim.— Shall not include any sum awarded as punitive or exemplary damages; nor procured as a premium return under a retrospective rating plan; nor that is owed to a reinsurer, insurer, insurance pool or underwriting association, as recoveries by subrogation or otherwise.
(7) Insolvent insurer.— Means an insurer authorized to transact insurance in Puerto Rico, whether on the date the policy was issued or when the insured event occurred, and against whom a court of competent jurisdiction has issued a final order of liquidation in the state of domicile of the insurer or in Puerto Rico, based on his insolvency and pursuant to § 4015 of this title, and the same has not been stayed nor been subject to a supersedeas or other comparable order.
(8) Member insurer.— Means any insurer authorized to transact insurance in Puerto Rico, and who subscribes the kinds of insurance to which this chapter is applicable, including the exchange of reciprocal or mutual contracts. This definition shall not include insurers which are exclusively engaged in reinsuring.
Nor shall this definition include the Fire and Allied Lines Joint Insurance Underwriting Association, the Medical-Hospital Professional Liability Insurers Syndicate for Joint Underwriting Insurance, the Assigned Risks Automobile Insurance Plan of Puerto Rico, nor any other association which could be created by law in the future to insure one of the kinds of insurance to which this chapter applies and which is mandatorily composed of the insurers authorized to underwrite this kind of insurance.
Any member insurer who ceases to contract new insurance business in Puerto Rico, but continues to collect premiums on policies which are still in effect with regard to residents of Puerto Rico, or risks located in Puerto Rico, shall continue to be a member insurer while said policies are in effect.
(9) Net direct written premiums.— Means the direct gross premiums written in Puerto Rico on insurance policies to which this chapter is applicable, less return premiums and dividends paid or accredited to the policyholders on said direct businesses. “Net direct written premiums” does not include premiums on contracts between insurers or reinsurers.
History —Ins. Code, added as § 38.050 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3806/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3806 - Association—Creation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3806 - Association—Creation
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A nonprofit legal entity is hereby created which shall be known as the Puerto Rico Miscellaneous Insurance Guaranty Association. All insurers defined as member insurers in § 3805(9) of this title, shall be and shall continue to be members of the Association as a condition to transact insurance in Puerto Rico. The Association shall carry out its functions under a plan of operations established and approved pursuant to § 3809 of this title, and shall exercise its powers through a Board of Directors established pursuant to § 3807 of this title. For administrative purposes and the imposition of assessments, the Association shall establish two (2) separate accounts:
(a) A vehicle insurance account, and
(b) an account for all other kinds of insurances to which this chapter applies.
History —Ins. Code, added as § 38.060 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3807/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3807 - Association—Board of Directors
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3807 - Association—Board of Directors
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(1) The Board of Directors of the Association shall consist of at least five (5) and not more than nine (9) member insurers, who shall serve for the terms established in the plan of operations. The Board members shall be selected by the member insurers, subject to the Commissioner’s approval. The President of the Board shall be elected from among the members thereof. Vacancies on the Board shall be filled for the remainder of the term, by majority vote of the remaining members of the Board, subject to the approval of the Commissioner.
(2) On the approval of the selections for the Board, the Commissioner shall take into consideration, among other things, whether all the member insurers are fairly represented.
(3) The assets of the Association can be used to reimburse the Board members for any reasonable and necessary expenses incurred as members thereof.
History —Ins. Code, added as § 38.070 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3808/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3808 - Association—Powers and duties
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3808 - Association—Powers and duties
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(a) The Association:
(1) Shall be bound to pay all the covered claims existing before the determination of insolvency and those which may arise before the earliest of the following dates:
(A) The end of the thirty (30)-day period following the determination of insolvency;
(B) the expiration date of the policy, or
(C) the date on which the insured substitutes the policy or causes its cancellation.
Regardless of the other provisions of this chapter, a covered claim shall not include a claim filed with the Association after the final date fixed by the court for filing claims against the liquidator or receiver of the insolvent insurer. The Association shall only pay that sum of each covered claim which exceeds one hundred dollars ($100). Such amount shall be a deductible, for which the assets of the insolvent insurer shall not be liable.
(2) Shall meet its obligations as to covered claims pursuant to the terms, conditions, and limits of the policy of the insolvent insurer. Provided, however, That under no circumstances shall the Association make any payment in excess of three hundred thousand dollars ($300,000) per event, regardless of the number of claimants, nor over one million dollars ($1,000,000) as the annual aggregate, regardless of the number of events covered under such policy. The Association shall be considered as the insurer up to the limit of its obligation in the covered claims and to such extent shall have all the rights, powers, and obligations of the insolvent insurer as if the latter were not insolvent.
(3) Shall distribute the claims paid and expenses incurred by both accounts separately, and shall levy on the member insurers separate assessments for each account in sums sufficient to pay the liabilities of the Association, pursuant to clause (1) of this subsection following an insolvency, the expenses incurred in the handling of covered claims after the insolvency, and other expenses authorized by this chapter. The assessments of each member insurer shall be in the proportion that the net direct premiums subscribed by the member insurer during the calendar year preceding the year the assessment is imposed on the kinds of insurance included in the account, bear to the net direct premiums subscribed by all the member insurers during the calendar year preceding the year in which the assessment is levied on the kinds of insurance included on the account. Each member insurer shall be notified of the assessment no later than thirty (30) days prior to its expiration date. No sum greater than two percent (2%) of the net direct premiums subscribed by the member insurer shall be imposed on any member insurer, in any year for any account, during the calendar year preceding the assessment on the kinds of insurance included in the account. If the maximum assessment, together with the other assets of the Association in any account, does not provide in a year in any of the accounts an amount sufficient to make the necessary payments of the account, the funds available shall be prorated and the unpaid portions shall be paid as soon as there are funds available. Subject to the approval of the Commissioner, the Association shall pay claims in the order it deems reasonable, including the payment of claims as they are received from the claimants or in groups or categories of claims. The Association may excuse or defer, wholly or partially, the assessment of any member insurer, if the same will cause the financial statement of the member insurer to reflect amounts of capital or surplus which are less than the minimum amounts required for a certificate of authority in any jurisdiction in which the member insurer is authorized to transact insurance; however, no dividends shall be paid to stockholders or the insured during the deferment period. The deferred assessments shall be paid when the payment does not reduce the capital or surplus below the required minimum. These payments shall be reimbursed to the member insurers who receive larger assessments by virtue of the deferment, or at their election, shall be credited to future payments. If an insurer member does not pay all or part of an assessment levied within the term granted for doing so, and has not been totally or partially excused or deferred from payment thereof, payment of legal interest on the sum owed shall be imposed from the date on which it should have been paid until the payment is, de facto, made.
(4) Shall investigate the claims filed in the Association and shall adjust, negotiate, settle and pay the covered claims to the extent of the liabilities of the Association, and shall dismiss all other claims, and may revise the settlements, the releases and judgments to which the insolvent insurer or its insured were parties in order to determine to what extent said settlements, releases and judgments can be properly objected to. The Association shall only transact those claims that have been filed within the established period pursuant to the provisions of § 4019 of this title, even though the claim has been judicially submitted.
(5) Shall notify such persons as directed by the Commissioner pursuant to § 3810(2)(a) of this title.
(6) Shall transact the claims through its employees, or through one or more insurers or other persons designated as servicing facilities. The designation of a servicing facility shall be subject to the approval of the Commissioner, but the designation of a member insurer may be declined by said member insurer.
(7) Shall reimburse to each servicing facility for the obligations of the Association paid by the facility and the expenses incurred by the facility in dealing with the claims in the name of the Association, and shall pay other expenses of the Association authorized by this chapter.
(b) The Association may:
(1) Employ or retain the necessary personnel to handle the claims and perform the other duties of the Association.
(2) Borrow the necessary funds to carry out the purposes of this chapter pursuant to the plan of operations.
(3) Sue and be sued.
(4) Negotiate such contracts as may be necessary to carry out the purposes of this chapter and be a part thereof.
(5) Take any other action necessary or pertinent for the purposes of this chapter.
(6) Reimburse the member insurers in proportion to the contribution of each member insurer, the amount for which the assets of the account exceed the liabilities, if at the end of any calendar year the Board of Directors determines that the assets of the Association in any account exceed the liabilities of that account as the Board of Directors may estimate for the following year.
History —Ins. Code, added as § 38.080 on Aug. 17, 1991, No. 72, § 1; Aug. 13, 2008, No. 262, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3809/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3809 - Association—Operating plan
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3809 - Association—Operating plan
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(1) The Association shall submit to the Commissioner for his/her consideration an adequate plan of operations for an efficient administration of the Association.
The plan of operations shall be subject to the approval of the Commissioner and shall take effect ten (10) days after his approval. If the Commissioner disapproves the plan, in whole or in part, the Board of Directors shall within fifteen (15) days following the notice of said disapproval submit the plan, in the portion objected, amended and revised and upon failure to submit a new version, or if it is unacceptable, the Commissioner shall promulgate his/her own plan of operations or the corresponding portion thereof, as the case may be.
The Board may, motu proprio, or at the request of the Commissioner, amend the plan of operations, subject to the approval of the Commissioner.
The member insurers shall be under the obligation to comply with the plan of operations approved by the Commissioner.
(2) The plan of operations shall establish:
(a) The procedures under which the Association shall discharge its powers and duties.
(b) The procedures to manage the assets of the Association.
(c) The procedure for filing the claims and the forms of evidence for covered claims. The notice of claims to the liquidator or receiver of an insolvent insurer shall be considered as if it were a notice to the Association or to its agent and periodically the liquidator or receiver shall submit a list of such claims to the Association or similar organization in another state.
(d) The place, date and time for the meetings of the Board.
(e) The procedures for the conservation of records of all the transactions of the Association, its agents and the Board.
(f) That any member insurer aggrieved by an action or decision of the Association may appeal to the Commissioner within thirty (30) days following the action or decision.
(g) The procedures for the designation of the members of the Board.
(h) The power of the Board to establish a reasonable amount for the payment of per diems and reimbursement of expenses to the directors, and the method of payment thereof.
(i) Additional provisions necessary or proper for the execution of the powers and duties of the Association.
(3) The plan of operations shall provide that any or all the powers and duties of the Association, except those under §§ 3808(a)(3) and 3808(b)(2) of this title, may be delegated to a corporation, association or other organization which carries out or may carry out functions similar to those of the Association, or its equivalent. Said corporation, association or organization shall be reimbursed as a servicing facility would be, and it shall be paid for performing any other function of the Association. The delegation under this subsection shall be excercised solely with the approval of the Board and the Commissioner, and it may only be made to a corporation, association or organization which extends a protection not substantially less favorable and effective than that provided in this chapter.
History —Ins. Code, added as § 38.090 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3810/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3810 - Association—Duties and powers of the Commissioner
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3810 - Association—Duties and powers of the Commissioner
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(1) The Commissioner:
(a) Shall notify the Association of the existence of an insolvent insurer not later than three days after receiving notice of the determination of insolvency. The Association shall be entitled to a copy of any action seeking an order of liquidation due to insolvency against a member insurer, at the time such a complaint is filed before a court of competent jurisdiction.
(b) At the request of the Board of Directors, shall provide the Association with a statement of the net direct written premiums subscribed by each member insurer.
(2) The Commissioner may:
(a) Request the Association to notify the insured of the insolvent insurer and any other interested party on the determination of insolvency and their rights under this chapter. The notice shall be served by mail to their last known address, if available, but if there should not be sufficient information available to serve notice by mail, it shall be sufficient to publish a notice once a week, for three consecutive weeks, in two newspapers of general circulation in Puerto Rico.
(b) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in Puerto Rico of any member insurer who fails to pay an assessment when due, or fails to comply with the plan of operations. As an alternative, the Commissioner may levy a fine on any member insurer who fails to pay an assessment when due. Said fine shall not exceed five percent (5%) of the unpaid assessment per month, but no fine shall be less than one hundred dollars ($100) a month.
(c) Revoke the designation of a servicing facility if he/she finds that the claims are not being satisfactorily handled.
History —Ins. Code, added as § 38.100 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3811/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3811 - Association—Effect of paid claims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3811 - Association—Effect of paid claims
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(1) Any person who recovers under the terms of this chapter is deemed to have ceded to the Association his/her rights under his/her policy to the extent of his recovery from the Association. Every insured or claimant who seeks the protection of this chapter shall cooperate with the Association to the extent to which such person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any amount he/she might have paid, except for those causes of action as the insolvent insurer might have had if said amounts had been paid by the insolvent insurer and except as provided in subsection (2) of this section. In the case of an insolvent insurer operating under an assessment liability plan, the payments of the claims made by the Association shall not have the effect of reducing the liability of the insured with the receiver, liquidator or statutory successor for the unpaid assessments.
(2) The Association shall be entitled to recover the amount of any covered claim it would have paid on behalf of any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are totally or partially liquidated by payments made pursuant to this chapter.
(3) The receiver, liquidator or statutory successor of the insolvent insurer shall be bound by the covered claims transactions made by the Association or similar organization in another state. The court with competent jurisdiction shall give the same priority to said claims to which the claimants might have been entitled, in the absence of this chapter, against the assets of the insolvent insurer. The expenses of the Association or similar organization incurred in dealing with the claims shall have the same priority as the expenses of the liquidator.
(4) The Association shall periodically submit to the liquidator or receiver of the insolvent insurer reports of the covered claims paid by the Association and estimates of the anticipated claims before the Association in order to preserve the rights of the Association against the assets of the insolvent insurer.
History —Ins. Code, added as § 38.110 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3812/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3812 - Association—Duplication of recovery
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3812 - Association—Duplication of recovery
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(1) Any person having a claim against an insurer under any provision of a policy other than a policy of an insolvent insurer, and which is also a covered claim, shall be required to first exhaust his/her rights under said policy. Any amount payable in a covered claim under this chapter shall be reduced in the amount of any recovery under said insurance policy.
(2) Any person having a claim which may be recovered from more than one insurance guaranty association or its equivalent, shall first seek recovery from the association of the place of residence of the insured, except from [sic] if the claim is filed by an insured for damages to a property located permanently, he/she shall first seek recovery from the Association in which the property is located. Any recovery under this chapter shall be reduced by the amount of recovery obtained from any other insurance guaranty association or its equivalent.
History —Ins. Code, added as § 38.120 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3813/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3813 - Association—Prevention of insolvency
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3813 - Association—Prevention of insolvency
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To help in the detection and prevention of insolvency of insurers:
(1) The Board of Directors shall:
(a) Make, from time to time, recommendations to the Commissioner for the detection and prevention of the insolvencies of insurers, and
(b) respond to requests from the Commissioner to discuss and make recommendations on the condition of any member insurer whose financial condition may be dangerous for its insured and for the public. Said recommendations shall not be deemed as public documents.
(2) The Board of Directors shall, at the conclusion of the insolvency of any domestic insurer in which the Association was bound to pay covered claims, and should it have sufficient and adequate information, prepare a report on the history and causes of said insolvency and submit such report to the Commissioner.
History —Ins. Code, added as § 38.130 on Aug. 17, 1991, No. 72, § 1; Aug. 13, 2008, No. 262, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3814/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3814 - Association—Examination
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3814 - Association—Examination
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The Association shall be subject to examination and to regulation by the Commissioner. The Board of Directors shall submit, no later than March 30 of each year, a financial report for the preceding calendar year in the form approved by the Commissioner.
History —Ins. Code, added as § 38.140 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3815/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3815 - Association—Tax exemption
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3815 - Association—Tax exemption
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The Association shall be exempt from the payment of any fee, duty or tax levied by the Commonwealth or any of its instrumentalities, except for taxes levied on real and personal property.
History —Ins. Code, added as § 38.150 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3816/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3816 - Association—Acknowledgment of assessments in the tariffs
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3816 - Association—Acknowledgment of assessments in the tariffs
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The rates and premiums charged on insurance policies to which this chapter applies shall include that portion which is sufficient to recover an amount equal to the sums which the member insurer pays the Association, less any amounts which the Association may return to the member insurer, and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup the assessment paid by the member insurer.
History —Ins. Code, added as § 38.160 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3817/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3817 - Association—Immunity
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3817 - Association—Immunity
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No civil liability shall be attached to, and no cause of action of any nature shall be established against any member insurer, the Association or its agents or employees, the Board of Directors or its representatives or the Commissioner or his/her representatives, for any action taken by them, or omission, in the discharge of their powers or duties under this chapter or under §§ 4001–4054 of this title.
History —Ins. Code, added as § 38.170 on Aug. 17, 1991, No. 72, § 1; Dec. 29, 2000, No. 462, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3818/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3818 - Association—Temporary stay of procedures
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3818 - Association—Temporary stay of procedures
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All procedures in which the insolvent insurer is a party or is bound to defend a party before the courts of Puerto Rico, shall be stayed for a period of up to six (6) months, and for any additional time granted by the court, from the date the insolvency was determined, or an ancillary procedure was instituted in Puerto Rico, as described in § 4049 of this title, whichever is later, to permit the Association an adequate defense in all caused pending action. With respect to any covered claim arising from a judgment under any decision, verdict or ruling based on the default of the insolvent insurer, or for its failure to defend an insured, the Association, on its own behalf or on behalf of said insured, may request that the judgment, order, decision, verdict or ruling be set aside by the same court or administration that issued said judgment, order, decision, verdict or ruling, and it shall be permitted to defend the claim on its merits.
The liquidator, receiver or statutory successor of an insolvent insurer covered by this chapter shall allow access to the Board or its authorized representative to those records of the insolvent insurer which may be needed for the Board to execute its functions with respect to covered claims under this chapter. Furthermore, the liquidator, receiver or statutory successor shall provide the Board or its representative with copies of said records upon request by the Board and at the expense of the Board.
History —Ins. Code, added as § 38.180 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-38/3819/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819)›§ 3819 - Association—Prohibited advertisements
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 38 - Miscellaneous Insurance Guaranty Association (§§ 3801 — 3819) › § 3819 - Association—Prohibited advertisements
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No person, including an insurer, agent or affiliate of an insurer shall make, publish, disseminate, circulate or present to the public or shall cause directly or indirectly to be made, published, disseminated, circulated or present to the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster or on a television or radio station, or in any other manner, any advertisement, announcement or statement, written or oral which uses the existence of the Puerto Rico Miscellaneous Insurance Guaranty Association for the purpose of selling, soliciting or inducing the purchase of any kind of insurance covered by said Association. This section, however, shall not be applicable to the Puerto Rico Miscellaneous Insurance Guaranty Association.
History —Ins. Code, added as § 38.190 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3901/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3901 - Content
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3901 - Content
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This chapter includes the provisions regarding the Puerto Rico Life and Disability Insurance Guaranty Association.
History —Ins. Code, added as § 39.010 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3902/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3902 - Purpose
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3902 - Purpose
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(1) The purpose of this chapter is to protect, subject to certain limitations, those persons specified in § 3903(a) against noncompliance of contractual obligations under life and disability insurance policies, specified in § 3903(b), due to implement or insolvency of the member insurer who issued them.
(2) To provide this protection, an association of insurers is hereby created for the payment of the benefits and the continuity of the coverages, within the limitations herein established. The members of the Association shall be subject to the imposition of assessments to provide the funds needed to carry out the purposes of this chapter.
History —Ins. Code, added as § 39.020 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3903/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3903 - Coverage and limitations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3903 - Coverage and limitations
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(a) This chapter shall provide coverage under the policies and contracts specified in subsection (b) of this section:
(1) To persons who, regardless of where they reside, (with the exception of nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees, or payees of the persons covered under clause (2), and
(2) to persons who are owners of or certificate holders under said policies, other than structured settlement annuities, and who:
(A) Are residents, or
(B) are not residents, but only if they meet all the following conditions:
(i) The insurers who issued said policies or contracts are domiciled in Puerto Rico;
(ii) said insurers never obtained a license or certificate of authority in the states where these persons reside;
(iii) those states have associations similar to the Association created by this chapter, and
(iv) said persons are not eligible for coverage by said associations.
(3) persons who are beneficiaries under a structured settlement annuities, only if the beneficiary:
(A) Is a resident, regardless of where the contract owner resides, or
(B) is not a resident, but only if the following conditions are met:
(i) The contract owner is a resident, and the beneficiary is not eligible for coverage by the association of the jurisdiction in which he/she resides, or
(ii) the contract owner is not a resident, but the insurer that issued the contract is domiciled in Puerto Rico, and neither the beneficiary nor the contract owner is eligible for coverage by the association of the jurisdiction in which they reside.
(4) This chapter shall not provide coverage to persons who are beneficiaries or assignee of contracts or policies of persons resident in Puerto Rico, if such beneficiary or assignee is eligible to obtain coverage by any other association.
(5) This chapter is intended to provide coverage to a person who is a resident of Puerto Rico, and in special circumstances, to a nonresident. In order to avoid duplicate coverage or payment recovery, if a person who would otherwise receive coverage under this chapter, is provided coverage under the laws of any other jurisdiction, he/she shall not be provided coverage under this chapter. In determining the application of this subsection in situations and/or cases where a person could be covered by more than one jurisdiction and/or association, whether as an owner, beneficiary, and/or assignee, this chapter shall be construed in conjunction with the laws of the other jurisdiction to result in coverage by only one association.
(b)
(1) This chapter shall provide coverage to the persons specified in subsection (a) of this section for direct or supplemental life and disability policies or contracts, which are not group policies or contracts, and for certificates under direct group policies and contracts issued by member insurers, except for the limitations imposed in this chapter.
(2) This chapter shall not provide coverage for:
(A) Any portion of a policy or contract which is not guaranteed by the insurer or under which the risk is assumed by the policy or contract holder.
(B) Any reinsurance policy or contract.
(C) Any portion of a policy or contract to the extent that the interest rate on which it is based:
(i) Averaged out for a period of four (4) years prior to the date in which the Association becomes obligated with respect to such policy or contract, exceeds an interest rate determined by subtracting two percentage points (2%) from “Moody’s Corporate Bond Yield Average”, averaged out by the same four (4)-year period or for a lesser period, if the policy or contract was issued less than four (4) years prior to the date in which the Association becomes obligated, and
(ii) on and after the date in which the Association becomes obligated with respect to such a policy or contract, exceeds the interest rate determined by subtracting three percentage points (3%) from the next recently available “Moody’s Corporate Bond Yield Average”.
(D) Any plan or program of an employer, association or similar entity to provide life, disability or annuity benefits to its employees or members, to the extent that said plan or program operates with its own funds or is not insured, including, but not limited to, benefits payable by an employer, association or similar entity under:
(i) A “Multiple Employer Welfare Arrangement” plan as defined in § 514 of the “Employee Retirement Income Security Act of 1974” as amended;
(ii) a minimum premium group insurance plan;
(iii) a stop loss group insurance plan;
(iv) a contract exclusively for administrative services;
(v) Any portion of a policy or contract to the extent that the it provides dividends or experience rating credits or payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract.
(vi) Any policy or contract issued in Puerto Rico by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in Puerto Rico.
(vii) Any annuity contract not assigned.
(viii) Any obligation that does not arise under the express written terms of the policy or contract issued to the contract or policy owner, including without limitation:
(I) Claims based on marketing materials;
(II) claims based on letters, riders, clauses, amendments and/or other documents that were issued by the insurer without meeting the applicable policy form filing and/or approval requirements set forth by the Office of the Insurance Commissioner;
(III) extra-contractual claims, and
(IV) claims for penalties or incidental damages.
(c) The benefits that the association may become obligated to cover shall in no event exceed the lesser of:
(1) The contractual obligations for which the insurer is liable or would have been liable if he/she were not an impaired or insolvent insurer, or
(2) with respect to one life, regardless of the number of policies or contracts:
(A) Three hundred thousand dollars ($300,000) in life insurance death benefits, but not more than one hundred thousand dollars ($100,000) in net cash surrender and net cash withdrawal values.
(B) One hundred thousand dollars ($100,000) in disability insurance benefits, including any net cash surrender and net cash withdrawal values. For the purposes of this section, disability insurance is the insurance which provides for the payment of a monthly or weekly sum in cases of disability or in the event that the insured is incapable of working.
(C) One hundred thousand dollars ($100,000) in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.
(D) Three hundred thousand dollars ($300,000) for basic hospital medical insurance and catastrophic health coverage. For the purposes of this section, basic hospital medical coverage is the medical expense coverage, which provides benefits to pay for the treatment of illnesses or injuries of an insured. It usually includes hospital, surgical, laboratory and office visit expenses. With respect to catastrophic health coverage, this subsection refers to health coverage for expenses related to an illness or injury after the basic hospital medical coverage limit is reached.
(3) With respect to each beneficiary of a structured settlement annuity, one hundred thousand dollars ($100,000) in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values.
(4) However, in no event shall the association be obligated to cover more than an aggregate of three hundred thousand dollars ($300,000) in benefits with respect to any one life under this section.
History —Ins. Code, added as § 39.030 on Aug. 17, 1991, No. 72, § 1; Aug. 20, 2009, No. 82, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3904/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3904 - Interpretation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3904 - Interpretation
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This chapter shall be liberally construed to attain the purpose established in § 3902 of this title, which shall serve as an aid and guide for its interpretation. However, none of the provisions of this chapter shall be construed as interfering or impairing any of the powers, faculties and duties conferred upon the Commissioner pursuant to §§ 4001–4054 of this title.
History —Ins. Code, added as § 39.040 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3905/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3905 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3905 - Definitions
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As used in this chapter:
(1) Account.— Means any of the accounts created by § 3906 of this title.
(2) Association.— Means the Life and Disability Insurance Guaranty Association of Puerto Rico created by virtue of § 3906 of this title.
(3) Contractual obligation.— Means any obligation under a policy or contract, or certificate under a group policy or group contract, or a portion thereof, for which coverage is provided under § 3903 of this title.
(4) Covered policy.— Means any policy or contract within the scope of this chapter pursuant to § 3903 of this title.
(5) Impaired insurer.— Means a member insurer who, after the effective date of this act, is not an insolvent insurer, and
(a) Is considered by the Commissioner to be potentially unable to fulfill its contractual obligations, or
(b) is placed by a court of competent jurisdiction under an order of rehabilitation or conservation.
(6) Insolvent insurer.— Means a member insurer whom a court of competent jurisdiction places under an order for liquidation, upon a finding of insolvency, after the effective date of this chapter.
(7) Member insurer.— Means any insurer having a license or certificate of authority to transact in Puerto Rico any of the kinds of insurance for which coverage is provided under § 3903 of this title, and includes any insurer whose license or certificate of authority in Puerto Rico may have been suspended, revoked, not renewed or voluntarily withdrawn, but does not include:
(a) A nonprofit medical-hospital services organization, and any assistance or mutual aid association which operates any medical-surgical service plan in Puerto Rico;
(b) a health services organization, as defined in §§ 1901 et seq. of this title;
(c) a charitable fraternal society;
(d) a mandatory state pooling association;
(e) a mutual assessment company or any entity that operates on the basis of assessments;
(f) an insurance exchange, or
(g) any entity similar to any of those mentioned above.
(8) Moody’s Corporate Bond Yield Average.— Means the monthly corporate averages published by “Moody’s Investors Service, Inc.” or any successor thereof.
(9) Premiums.— Means the amounts received for covered policies or contracts, less premiums, considerations and deposits returned thereon, and less dividends and credits for experience thereon. “Premiums” does not include sums received for any policies or contracts or portions thereof for which no coverage is provided under § 3903(b) of this title, except that assessable premiums shall not be reduced by the provisions of §§ 3903(b)(2)(C) of this title regarding limitations in their interest, and 3903(c)(2) of this title concerning limitations with respect to any one life or any one contract holder.
(10) Resident.— Means a person residing in Puerto Rico at the time it is determined that a member insurer is impaired or insolvent, and to whom a contractual obligation is owed. A person may be a resident of only one state, which, in the case of a person who is not a natural person, shall be its main place of business.
(11) Supplementary contract.— Means any agreement for the distribution of the proceeds of a policy or contract.
(12) Unassigned annuity contract.— Means any annuity contract or group annuity certificate which is not issued to nor owned by an individual, except to the extent to which an insurer has guaranteed any annuity benefit under said contract or certificate to an individual.
(13) Affiliate.— Means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under the common control of an insolvent insurer as of December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer.
(14) Structured settlement annuity.— Means an annuity or contract with similar features, issued by an insurer authorized to do life insurance business in Puerto Rico, purchased in order to fund periodic payments to a plaintiff or claimant for or with respect to personal injury suffered by the plaintiff or other claimant.
History —Ins. Code, added as § 39.050 on Aug. 17, 1991, No. 72, § 1; Aug. 20, 2009, No. 82, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3906/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3906 - Association—Creation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3906 - Association—Creation
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(1) A nonprofit legal entity is hereby created which shall be known as the Life and Disability Insurance Guaranty Association of Puerto Rico. All member insurers shall be and will continue to be members of the Association as a condition for retaining their authority to transact insurance in Puerto Rico. The Association shall carry out its functions according to a plan of operations established and approved pursuant to § 3910 of this title and shall exercise its powers through a Board of Directors established pursuant to § 3907 of this title. For administrative purposes of the imposition of assessments, the Association shall keep three accounts:
(a) Life insurance account.
(b) Disability insurance account.
(c) Annuity account, excluding unallocated annuity contracts.
(2) The Association shall be under the immediate supervision of the Commissioner and shall be subject to the applicable provisions of this title.
History —Ins. Code, added as § 39.060 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3907/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3907 - Association—Board of Directors
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3907 - Association—Board of Directors
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(1) The Board of Directors of the Association shall consist of not less than five (5) nor more than nine (9) member insurers, who shall serve for the terms established in the plan of operations. The Board members shall be selected by the member insurers subject to the approval of the Commissioner. The President of the Board shall be elected from among the members thereof. Vacancies on the Board shall be filled for the remaining period of the term, by majority vote of the remaining Board members, subject to the approval of the Commissioner.
(2) On approving the selection of the Board, the Commissioner shall take into consideration, among other things, whether all the member insurers are fairly represented.
(3) The members of the Board may be reimbursed from the assets of the Association, for any reasonable and necessary expenses incurred as members thereof, but the Association may not otherwise compensate said members for their services.
History —Ins. Code, added as § 39.070 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3908/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3908 - Association—Powers and duties
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3908 - Association—Powers and duties
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(a) If a member insurer is an impaired domestic insurer, the Association may, at its discretion and subject to any conditions imposed by the Association and approved by the Commissioner which do not impair the contractual obligations of said insurer, and which, except in the case of a rehabilitation or conservation procedure ordered by the court, are also approved by the impaired insurer:
(1) Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured all or some of the policies or contracts of the impaired insurer;
(2) provide the moneys, pledges, notes, guarantees or other adequate instruments to attain the provisions of clause (1) of this subsection and guarantee the payment of the contractual obligations of the impaired insurer while pertinent action is taken pursuant to clause (1) of this subsection, or
(3) loan money to the impaired insurer.
(b)
(1) If a member insurer, whether domestic or foreign, is an impaired insurer and is not paying his/her claims promptly, then, subject to the conditions of clause (2) of this subsection, the Association, at its discretion:
(A) Shall take any of the actions provided in subsection (a) of this section, subject to the conditions indicated therein, or in their absence.
(B) Shall provide substitute benefits in lieu of the contractual obligations of the impaired insurer solely with respect to: disability claims, periodic annuity benefit payments, death benefits, supplemental benefits, and cash withdrawals by policy or contract owners who request them as emergency claims or under financial pressure, pursuant to the standards proposed by the Association and approved by the Commissioner.
(2) The Association shall be subject to the requirement of clause (1) of this subsection only if:
(A) The laws of the state of domicile of the impaired insurer provide that until all payments of, or on account of, the contractual obligations of the impaired insurer by all guaranty associations jointly with all related expenses, and interest on said payments and expenses, have been reimbursed to the guaranty associations, or the guaranty associations have approved repayment plan for the impaired insurer:
(i) The delinquency proceedings shall not be deemed as concluded,
(ii) neither the impaired insurer nor his/her assets shall be returned to the control of its stockholders or to private management, and
(iii) he/she shall not be allowed to solicit or accept new business nor shall his/her license be restored had it been suspended or revoked, and
(B)
(i) if the impaired insurer is a domestic insurer, a court of competent jurisdiction in Puerto Rico has placed him/her under an order for rehabilitation, or
(ii) if the impaired insurer is a foreign insurer:
(I) He/she has been forbidden to solicit or accept new business in Puerto Rico,
(II) his/her certificate of authority has been suspended or revoked in Puerto Rico, and
(III) a petition for his/her rehabilitation or liquidation has been filed in a court of competent jurisdiction in his/her state of domicile by the Commissioner of said state.
(c) If a member insurer is an insolvent insurer, the Association, at its discretion and subject to the approval of the Commissioner, shall take one of the following actions:
(1)
(A) Guarantee, assume or reinsure or cause to be guaranteed, assume or reinsured the policies and contracts of the insolvent insurer; or
(B) take steps for the contractual obligations of the insolvent insurer to be paid; and
(C) provide the moneys, pledges, guarantees or other instruments which are reasonably necessary for complying with those duties; or
(2) with respect solely to life and disability insurance policies, provide the benefits and coverages pursuant to subsection (d) of this section.
(d) When acting in accordance with subsections (b)(1)(B) or (c)(2) of this section the Association shall, with respect solely to life and disability insurance policies:
(1) Assure the payment of benefits for premium identical to the premiums and benefits (except for conversion terms and right to renewal) which would have been payable under the policies of the insolvent insurer for losses incurred:
(A) With regard to group policies, no later than the next renewal date under said policies or contracts or forty-five (45) days, whichever occurs first, but in no case less than thirty (30) days after the date on which the Association becomes obligated with regard to said policies.
(B) With regard to individual policies, no later than the next renewal date (if any) under said policies, or one (1) year, whichever occurs first, but in no case less than thirty (30) days from the date in which the Association becomes obligated with regard to such policies.
(2) Make diligent efforts to provide all known insured or group policyholders, regarding group policies, with a thirty (30) days notice of the termination of the benefits provided.
(3) Regarding individual policies, shall provide each known insured person or owner, if other than the insured, as well as with regard to an individual previously insured under a group policy, who is not eligible for replacement group coverage, a substitute individual coverage pursuant to the provisions of clause (4)(A) of this subsection if the insured were entitled thereto by law, or by the expired policy, to convert it to an individual coverage policy or to keep an individual policy in force for up to a specified age or for a specified time during which the insurer was not entitled to make changes unilaterally to any provision of the policy, or was only entitled to make changes in the premium by class.
(4)
(A) On providing the substitute coverage required pursuant to clause (3) of this subsection, the Association may offer for the terminated coverage to be reissued, or for an alternative policy to be issued.
(B) Alternative or reissued policies shall be offered without requiring evidence of insurability, a waiting period or an exclusion which was not in effect under the terminated policy.
(C) The Association may reinsure any alternative or reissued policy.
(5)
(A) The alternative policies adopted by the Association shall be subject to the approval of the Commissioner. The Association may adopt several types of alternative policies for future issue regardless of any particular impairement or insolvency.
(B) The alternative policies shall contain at least the minimum statutory provisions required in this title and shall provide reasonable benefits with respect to the premium charged. The premium shall reflect the amount of insurance to be provided and the age and risk classification of each insured, but shall not reflect any changes in the health of the insured from the last time the original policy was underwritten. The Association shall establish its premiums pursuant to the rates adopted by it and these shall take effect immediately. The Association shall notify the Commissioner of the rates adopted and the latter shall have thirty (30) days to file an opposition to said rates. Were this to occur, the Association may request a hearing to show cause by which the rates should not be modified.
(C) Any alternative policy issued by the Association shall provide similar coverage to that of the policy issued by the impaired or insolvent insurer, as determined by the Association.
(6) If the Association chooses to reissue the terminated coverage at a rate different that of the terminated policy, it shall set the premium in accordance with the amount of insurance provided and the age and risk classification, subject to the approval of the Commissioner, or of a court of competent jurisdiction.
(7) The obligations of the Association with respect to coverage under any policy of an impaired, or insolvent insurer or under any reissued or alternative policy, shall cease on the date the policyholder, the insured or the Association substitutes said coverage or policy for a similar one.
(e) Upon proceeding pursuant to subsections (b)(1)(B) or (c) of this section regarding any policy or contract with guaranteed minimum interest rates, the Association shall ensure that the interest rate paid or credited be consistent with § 3903(b)(2)(C) of this title.
(f) Nonpayment of premiums within thirty-one (31) days after the date required under the terms of any guaranteed, assumed, alternative or reissued policy or contract or under substitute coverage, shall terminate the obligations of the Association under said policy or contract pursuant to this chapter with regard to said policy or coverage, with the exception of any claims insurred or any net cash surrender value that may be due pursuant to the provisions of this chapter.
(g) The premiums due for coverage after an order to liquidate an insolvent insurer is issued shall pertain to and be paid to the Association, as it may provide, and the Association shall be liable to the owners of policies or contracts for unearned premiums which arise after the order has been entered.
(h) The protection offered in this chapter shall not apply when the laws of the state or domiciliary jurisdiction of the impaired or insolvent insurer, other than Puerto Rico, provide any guaranteed protection to residents of Puerto Rico.
(i) On carrying out its obligations under subsections (b) and (c) of this section, the Association may, with the approval of the court:
(1) Impose permanent liens on policies or contracts with regard to any guarantee, assumption or reinsurance agreement if the Association determines that the amounts that it can impose as assessments pursuant to this chapter, are less than those required to ensure full and prompt compliance of the duties of the Association under this chapter or that the economic or financial conditions that might affect the member insurers are sufficiently adverse so that the imposition of said permanent liens on policies or con tracts may be of benefit to the public interest.
(2) Impose temporary moratoriums or liens on payments of cash values, and policy loans or on any other right to withdraw funds retained with regard to policies or contracts, in addition to any other contractual provisions for deferred cash and policy loan values.
(j) If the Association does not take action within a reasonable period of time, as provided in subsections (b)(1)(B), (c) and (d) of this section, the Commissioner shall have the powers and duties of the Association pursuant to this chapter, with regard to impaired or insolvent insurers.
(k) The Association may render assistance and advise to the Commissioner, upon his/her request, with respect to rehabilitation, payment of claims, continuation of coverage, or compliance with other contractual obligations of any impaired or insolvent insurer.
(l) The Association may appear before any court in Puerto Rico with jurisdiction over an impaired or insolvent insurer towards whom it is obligated or may become obligated pursuant to this chapter. Such authority shall extend to all matters applicable to the powers and duties of the Association, including, but without being limited to, proposals to reinsure, modify, or guarantee the policies or contracts of an impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The Association shall also be entitled to appear or intervene before a court in another state with jurisdiction over an impaired or insolvent insurer with whom the Association is obligated or may become obligated, or with jurisdiction over a third party against whom the Association could have the subrogation rights of the insurer’s policyholders.
(m)
(1) Any person who receives benefits under this chapter shall be deemed to have ceded to the Association the rights under, and any causes of action related to the covered policy or contract up to the limit of the benefits received by virtue of this chapter, whether they are in payment of, or on account of contractual obligations, the continuation of coverage, or the issue of substitute or alternative coverages. The Association may require any payee, policy or contract owner, beneficiary, insured or annuitant, to cede said rights or causes of action as a prior condition for receiving any right or benefit that this chapter confers upon said person.
(2) The subrogation rights of the Association under this subsection shall have the same priority against the assets of the impaired or insolvent insurer as if he were the person entitled to receive benefits pursuant to this chapter.
(3) In addition to the provisions of clauses (1) and (2) of this subsection, the Association shall have all subrogation rights allowed by the laws of Puerto Rico and by common law, and any other legal or equitable remedies which the impaired or insolvent insurer or a policy or contract holder would have had with regard to such policies or contracts.
(n) The Association may:
(1) Assume such contractual obligations as are necessary and appropriate to carry out the provisions and purposes of this chapter.
(2) Sue and be sued, including taking the legal measures which may be necessary and appropriate to recover any assessment due pursuant to § 3909 of this title, and to settle claims or potential claims against it.
(3) Borrow money to carry out the purposes of this chapter. Any notes or other evidence of indebtedness of the Association not in default, shall be considered as legal investments of the domestic insurers, and may be accepted as admitted assets.
(4) Employ or retain the necessary personnel to handle the financial affairs of the Association and to execute those functions as may be deemed necessary and pertinent under this chapter.
(5) Institute legal actions as may be necessary to avoid the payment of improper claims.
(6) Exercise, for the purposes of this chapter and to the extent permitted by the Commissioner, the powers of a domestic life and disability insurer, but in no case shall the Association issue insurance policies or annuity contracts unless they are issued to meet its obligations pursuant to this chapter.
(o) The Association may join in organization of one or more associations with similar purposes in other states to promote its purposes and exercise its powers and duties.
History —Ins. Code, added as § 39.080 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3909/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3909 - Association—Assessments
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3909 - Association—Assessments
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(1) In order to provide the funds needed to execute the powers and duties of the Association, the Board of Directors shall impose on the member insurers separate assessments for each account when and for the amounts it deems necessary. The assessments shall be payable within thirty (30) days from when prior written notice was given to the member insurers and shall accrue the legal annual interest from the date in which they are due.
(2) There shall be two types of assessments as follows:
(a) Class A.— Shall be imposed to defray administrative and legal costs, as well as other expenses and the examinations conducted pursuant to § 3912(5) of this title. Class A assessments may be levied whether they are related or not to a particular impaired, or insolvent insurer.
(b) Class B.— Shall be imposed to the extent needed to execute the powers and duties of the Association pursuant to § 3908 of this title with regard to an impaired or insolvent insurer.
(3)
(a) The amount of any Class A assessment shall be determined by the Board and may be made on a pro-rated or fixed basis. If pro-rated, the Board may provide that it be credited against future Class B assessments. A fixed assessment shall not exceed one hundred and fifty dollars ($150) per member insurer in any calendar year. For the purposes of assessments, the amount of any Class B assessment shall be allocated among the accounts pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or on the basis of any other standard determined by the Board, at its discretion, as being fair and reasonable under the circumstances.
(b) Class B assessments shall be imposed against the member insurers for each account in the proportion which the premiums received from businesses in Puerto Rico by each member insurer or for policies or contracts covered by each account, for the three (3) most recent calendar years, for which information is available, preceding the year in which the insurer became impaired or insolvent, as the case may be, bear to the premiums received in Puerto Rico for said calendar years by all the member insurers on whom the assessment is imposed.
(c) Assessments shall not be imposed to provide the funds which shall be used to meet the obligations of the Association with regard to an impaired or insolvent insurer until they are needed to carry out the purposes of this chapter. The classification of assessments shall be made under subsection (2) of this section and the computation thereof under this subsection shall be made with a reasonable degree of accuracy, since an exact determination may not always be possible.
(4) The Association may reduce or defer, wholly or partially, the assessment imposed on an member insurer if, the opinion of the Board, payment thereof shall place at risk the ability of an member insurer to meet his/her contractual obligations. In case the assessment against an insurer is reduced or deferred, totally or partially, the amount by which the assessment is reduced or deferred may be distributed among the other member insurers pursuant to the method established in this section for the imposition of assessments.
(5)
(a) The total amount of all assessments imposed on a member insurer for each account, shall not exceed in any calendar year, two percent (2%) of the average premiums received in Puerto Rico on policies and contracts covered by the account for the three calendar years preceding the year in which the insurer became impaired or insolvent. If the maximum assessment, together with the other assets of the Association in any account do not provide an amount sufficient to meet the responsibilities of the Association in a given year for any of the accounts, additional assessments shall be imposed subsequently to collect the funds needed according to what is allowed in this chapter.
(b) The Board may provide in the plan of operations a method for the allocation of funds among the claims whether they are related or not to one or more impaired capital or insolvent insurers, when the maximum assessment is insufficient to cover anticipated claims.
(6) The Board, through a fair method to be established in the plan of operations, may return or reimburse to the member insurers, in proportion to the contribution of each insurer to the account, that amount by which the assets of the account exceed the amount the Board deems necessary to carry out the obligations of the Association with regard to the account in the coming year, including those assets obtained from assignments, subrogations, and net profits from income and investments. A reasonable amount may be withheld in any account to provide funds for the regular expenses of the Association and for the payment of future losses.
(7) In determining their rates and dividends for policyholders with regard to a kind of insurance within the scope of this chapter, all member insurers may take into consideration the amount that would be reasonably necessary to meet their assessment obligations under this chapter.
(8) The Association shall issue to every member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution in the form prescribed by the Commissioner, for the amount of the assessment thus paid. All existing certificates shall receive the same treatment and priority, without taking into consideration the amounts and dates of issue. The insurer may include a certificate of contribution in his/her financial statement as an asset, in the manner and for the amount, if any, and for the period of time approved by the Commissioner.
History —Ins. Code, added as § 39.090 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3910/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3910 - Association—Plan of operations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3910 - Association—Plan of operations
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(1) The Association shall submit to the Commissioner a plan of operations and any amendments to [the] same which may be necessary and adequate to attain the fair, reasonable and equitable administration of the Association. The plan of operations and any amendments thereto, shall become effective when approved by the Commissioner in writing, or within thirty (30) days if the Commissioner has not rejected it before then.
(2) All member insurers shall comply with the plan of operations.
(3) The plan of operations, in addition to the other requirements listed elsewhere in this chapter, shall establish:
(a) Procedures for the administration of the assets of the Association.
(b) The amounts and methods of reimbursement for the members of the Board of Directors as provided in § 3907 of this title.
(c) Places and dates for the regular meetings of the Board, including telephone conference calls of the Directors.
(d) Procedures for keeping records of all the financial transactions of the Association, its agent and the Board of Directors.
(e) Procedures for the designation of members of the Board of Directors and notice thereof to the Commissioner.
(f) Any additional procedures for the imposition of assessments under § 3909 of this title.
(g) Those additional provisions which may be necessary and proper for the execution of the powers and duties of the Association.
(4) The plan of operations may establish that any of the powers and duties of the Association, or all of them, except those provided for in §§ 3908(m)(3) and 3909 of this title, be delegated to a corporation, association or other organization which performs, or may perform functions analogous to those of this Association, or their equivalent, in two or more states. Said corporation, association or organization shall be reimbursed for the payments made on behalf of the Association and it shall be compensated for performing any of the functions of the Association. A delegation under this section shall be made solely with the approval of the Board of Directors as well as of the Commissioner and shall only be made to a corporation, association or organization which does not extend a substantially less favorable and effective protection than the one this chapter provides.
History —Ins. Code, added as § 39.100 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3911/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3911 - Association—Duties and powers of the Commissioner
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3911 - Association—Duties and powers of the Commissioner
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In addition to the powers and duties listed in other parts of this chapter:
(1) The Commissioner:
(a) Shall provide for the Association, by request of the Board of Directors, a list of the premiums of each member insurer in Puerto Rico and in any other corresponding state.
(b) Shall require the insurer to cover an impairment when declared and the amount thereof is determined, within the term specified in § 2939 of this title. Notice to the insurer shall be deemed as a notice to the stockholders, if any. Failure of the insurer to comply with said requirement shall not be an excuse for the Association to stop exercising its powers and duties established in this chapter.
(c) Shall be designated as liquidator or rehabilitator in any liquidation or rehabilitation proceeding of a domestic insurer.
(2) The Commissioner shall suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in Puerto Rico of any member insurer who fails to pay an assessment due, or fails to comply with the plan of operations. As an alternative, the Commissioner may impose a penality on any member insurer who fails to pay an assessment due. This penalty shall not exceed five percent (5%) per month of the assessment due, but no penalty shall be less than one hundred dollars ($100) a month.
(3) Any member insurer may appeal any action of the Board of Directors or of the Association before the Commissioner, if the appeal is made within thirty (30) days following the final action appealed. If a member insurer appeals an assessment, the amount of the assessment shall be paid to the Association and shall be available for the Association to cover its obligations while the appeal is pending. If the appeal on the assessment is sustained, the amount paid erroneously or in excess shall be reimbursed to the member insurer. Any final action or order of the Commissioner shall be subject to judicial review by a court of competent jurisdiction.
(4) The liquidator, rehabilitator or conservator of an impaired insurer may notify all interested persons as to the effects of this chapter.
History —Ins. Code, added as § 39.110 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3912/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3912 - Association—Prevention of insolvencies
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3912 - Association—Prevention of insolvencies
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To aid in the detection and prevention of insolvencies or impairment of capital:
(a) It shall be the duty of the Commissioner:
(1) to notify Commissioners of all other states, territories of the United States and the District of Columbia when he/she takes any of the following actions against a member insurer:
(A) Revocation of his/her license;
(B) suspension of his/her license, or
(C) issue of formal orders for such company to restrict its premium writing, obtain additional contributions to the surplus, withdraw from Puerto Rico, reinsure all or part of its business or increase its capital, surplus or any other account for the protection of its policyholders or creditors.
(i) Such notice shall be mailed to all commissioners within thirty (30) days following the action taken, or the date in which such an action occurs.
(ii) Inform the Board of Directors when he/she has taken any action established in subparagraph (i) of this paragraph or has received a report from any other Commissioner indicating that such action has been taken in another state. The report to the Board of Directors shall contain all significant details of the action taken or of the report received from another commissioner.
(b) The Commissioner may request the advice and recommendations of the Board of Directors with regard to any matter affecting his/her duties and responsibilities concerning the financial condition of the member insurers and of the companies which request admission to transact insurance business in Puerto Rico.
(c) The Board of Directors may submit reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer or germane to the solvency of any company seeking to do an insurance business in Puerto Rico. Such reports and recommendations shall not be deemed to be public documents.
(d) The Board of Directors may notify the Commissioner of any information indicating a member insurer may be an insurer with impairment of capital or an insolvent insurer.
(e) The Board of Directors may request the Commissioner to order an examination of any member insurer, which Board considers, in good faith, to be impaired of capital or insolvent. Within thirty (30) days from the receipt of said petition, the Commissioner shall begin said examination. The examination may be conducted as one of the National Association of Insurance Commissioners, or by the persons that the Commissioner designates. The cost of the examination shall be paid by the Association and the report thereof shall be treated in the same way as other examination reports. In no case shall such examination report be submitted to the Board of Directors before it is made public, but this shall not prevent the Commissioner from complying with subsection (a) of this section.
The Commissioner shall notify the Board of Directors when the examination has been concluded. The Commissioner shall keep the request for examination filed in his/her office, and it shall not be available for public inspection until the examination report has been made public.
(f) The Board of Directors may make recommendations to the commissioner for the detection and prevention of insurer insolvencies.
(g) The Board of Directors, on concluding the insolvency of an insurer in which the Association was obligated to pay covered claims, shall prepare a report to the Commissioner with the information it may have on the history and causes of said insolvency. The Board shall cooperate with the boards of directors of the guaranty associations of other states in the preparation of a report on the history and causes of the insolvency of a particular insurer and may adopt by reference any report prepared by such other associations.
History —Ins. Code, added as § 39.120 on Aug. 17, 1991, No. 72, § 1; Aug. 20, 2009, No. 82, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3913/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3913 - Association—General provisions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3913 - Association—General provisions
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(1) Nothing provided in this chapter shall be construed to limit the liability for the payment of unpaid assessments of the insured of an impaired or insolvent insurer who operates under an assessment plan.
(2) Records shall be kept of all negotiations and meetings in which the Association or its representatives intervene to discuss the activities of the Association in the performance of its powers and duties pursuant to § 3908 of this title. The records of said negotiations and meetings shall only be made public upon conclusion of the proceeding for liquidation, rehabilitation or conservation of an impaired or insolvent insurer, or the termination of the impairment or insolvency of the insurer or through an order from a court of competent jurisdiction. Nothing expressed in this subsection shall limit the duty of the Association to render a report of its activities pursuant to the provisions of § 3914 of this title.
(3) For the purpose of compliance with its obligations under this chapter, the Association shall be deemed as a creditor of the impaired or insolvent insurer up to the maximum of the assets attributable to covered policies reduced by any sums to which the Association is entitled by subrogation pursuant to § 3908(m) of this title. The assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue with all the covered policies and for the payment of all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies, as used in this paragraph, are that proportion of the assets which the reserves that should have been established for these policies bear to the reserves that should have been established for all insurance policies written by the impaired or insolvent insurer.
(4)
(a) Prior to the termination of any proceeding for liquidation, rehabilitation or conservation, the court, in making an equitable distribution of the property rights of the insolvent insurer, may take into consideration the interests of the respective parties, including the Association, the stockholders and policyholders of the insolvent insurer, or any other party with a bona fide interest.
On making said determination, the interests of the policy holders of the insurer who shall renew operations, or its successor shall also be taken into consideration.
(b) No distribution shall be made to the stockholders of an impaired or insolvent insurer, if any, unless the total amount of the valid claims of the Association with interest thereon, for funds used to carry out its powers and duties pursuant to § 3908 of this title with respect to such insurer, has been fully recovered by the Association.
(5)
(a) If an order has been issued for the liquidation or rehabilitation of an insurer domiciled in Puerto Rico, the Insurance Commissioner, as receiver, shall be entitled to recover, on behalf of the insurer, from any affiliate controlling him/her, the distributions, other than stock dividends paid by the insurer on his/her capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation, subject to the limitations indicated in clauses (b)–(d) of this subsection.
(b) None of said distributions shall be recoverable if the insurer shows that they were lawful and reasonable when paid, and that the insurer did not know, and could not have reasonably known that the distributions could adversely affect his/her ability to meet his/her contractual obligations.
(c) Any person who as an affiliate controlled the insurer at the time the distributions were paid shall be liable for up to the amount of the distributions he/she received. Any person who, as an affiliate, controlled the insurer at the time the distributions were declared shall be liable for up to the sum he/she would have received if they had been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum recoverable sum under this paragraph shall be that which is needed in excess of all other available assets of the insolvent insurer, for payment of his/her contractual obligations.
(e) If a person liable under clause (c) of this subsection is insolvent, all affiliates controlling his/her at the time the distribution was paid shall be jointly and severally liable for any deficiency that may result from the sums received from the insolvent affiliate.
History —Ins. Code, added as § 39.130 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3914/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3914 - Association—Examination; annual report
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3914 - Association—Examination; annual report
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The Association shall be subject to examination and regulation by the Commissioner. Each year, the Board of Directors shall submit to the Commissioner no later than one hundred and twenty (120) days after the close of the fiscal year of the Association, a financial report in the form prescribed by the Commissioner, and a report of its activities during the preceding fiscal year.
History —Ins. Code, added as § 39.140 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3915/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3915 - Association—Tax exemption
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3915 - Association—Tax exemption
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The Association shall be exempt from payment of all fees and taxes levied in Puerto Rico or any of its subdivisions, with the exception of those on real property.
History —Ins. Code, added as § 39.150 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3916/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3916 - Association—Immunity
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3916 - Association—Immunity
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There shall be no liability on the part of, nor shall any cause of action of any nature be instituted against a member insurer or its producers or employees, the Association or its producers or employees, the members of the Board of Directors, or the Commissioner or his/her representatives for any of their actions or omissions in the exercise of their powers and duties under this chapter. Such immunity shall be extended to their participation in any organization of associations with similar purposes in one or more states and to said organization, its producers and employees.
History —Ins. Code, added as § 39.160 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9, eff. 120 days after Jan. 19, 2006.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3917/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3917 - Association—Temporary stay of proceedings; reopening of judgments by default
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3917 - Association—Temporary stay of proceedings; reopening of judgments by default
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All proceedings in which the insolvent insurer is a party in any court of Puerto Rico, shall be stayed for a term of one hundred and eighty (180) days from the date an order for liquidation, rehabilitation or conservation is final in order to allow the Association to take the corresponding legal action with regard to matters germane to its powers and duties. With respect to judgments by default under any decision, order, verdict or finding, the Association may request the same court that rendered said judgment to set it aside, and that it be allowed to present a defense of the suit on its merits.
History —Ins. Code, added as § 39.170 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-39/3918/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918)›§ 3918 - Prohibited advertisements—Notice to policy owners
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3918 - Prohibited advertisements—Notice to policy owners
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(a) No person, including a insurer, agent or affiliate of an insurer shall make, publish, disseminate, circulate or place in public view or cause to be made, published, disseminated, circulated or placed in public view, directly or indirectly, in any newspaper, magazine or other publication or as a notice, circular, pamphlet, letter or poster, or over a radio or television station, or otherwise, any written or oral advertisement, notice or statement, using the existence of the Puerto Rico Life and Disability Insurance Guaranty Association for the purpose of selling, soliciting or as an inducement for the purchase of any type of life and disability insurance. However, this section shall not apply to the Puerto Rico Life and Disability Insurance Guaranty Association.
(b) Within one hundred eighty (180) days after the approval of this chapter, the association shall prepare a document describing the general purposes and coverage limitations offered by the Association under this chapter. Such document must be submitted to the Commissioner for approval. Upon the approval thereof, the Association shall distribute such document to all member insurers. The document shall also be available to any insured or policy and/or contract owner upon request. The distribution, delivery, contents, or interpretation of this document does not guarantee that either the policy or the contract or the owner of the policy or contract is covered and protected under the provisions of this chapter in the event of insolvency. The information contained in such document must be revised by the association once the amendments to this chapter are approved, and the revised document shall be submitted to the Commissioner for approval. Failure to receive this document does not give the policy or contract owner or the insured or beneficiary any greater rights than those stated in this chapter.
(c) The document prepared under subsection (b) above shall contain a clear and conspicuous disclaimer warning that not all policies or contracts are covered under the provisions of this chapter. Said disclaimer shall be approved by the Commissioner.
History —Ins. Code, added as § 39.180 on Aug. 17, 1991, No. 72, § 1; Aug. 20, 2009, No. 82, § 4.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4001/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4001 - Interpretation and purpose
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4001 - Interpretation and purpose
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(1) This chapter comprises the provisions regarding the rehabilitation and liquidation of insurers.
(2) This chapter does not limit the powers granted to the Commissioner by other provisions of this title or any special law.
(3) This chapter shall be liberally construed to attain the purpose established in subsection (4) of this section.
(4) The purpose of this chapter is to protect the interests of the insured, claimants, creditors and general public with minimum interference with the normal prerogatives of the owners and managers of the insurers, through:
(a) The early detection of any potentially dangerous condition in an insurer, and prompt application of appropriate corrective measures;
(b) the application of improved methods for rehabilitating insurers, using the cooperation and management expertise of the insurance industry;
(c) clarification of the law so as to minimize legal uncertainty and litigation and thus achieve enhanced efficiency and economy of liquidation;
(d) the equitable assessment of any unavoidable loss;
(e) a decrease in the problem of interstate rehabilitations and liquidations by promoting cooperation between states in the liquidation process, and by extending the scope of personal jurisdiction over debtors of the insurer outside of Puerto Rico, and
(f) The regulation of receivership proceedings and the establishment of substantive rules for said proceedings.
(g) Provide, as part of the oversight of the insurance business, a comprehensive scheme for the rehabilitation and liquidation of insurers pursuant to this chapter. The proceedings in cases of insolvency and of any noncompliance by an insurer shall constitute integral aspects of the insurance business and as such are vested with public interest.
(5) This chapter and the chapters covering the Insurance Guaranty Associations of Puerto Rico contain the provisions applicable to rehabilitation and liquidation proceedings for insurers and the same must be construed as a whole in order for them to be consistent. In the event that a conflict arises between the provisions of said chapters and the provisions of any other law, the provisions of these chapters shall prevail.
—Ins. Code, added as § 40.010 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 1.
History
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4002/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4002 - Persons covered
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4002 - Persons covered
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The proceedings authorized by this chapter may be applied to:
(1) Any insurer who through an existing authorization granted by the Commissioner is transacting, or has transacted insurance business in or from Puerto Rico, and against whom claims arising from that business may exist now or in the future.
(2) Any insurer who purports to transact insurance business in Puerto Rico.
(3) Any other person organized or in the process of organizing in Puerto Rico with the intention of transacting insurance business.
(4) Any fraternal charitable society or health services organization which has been authorized or is authorized to do business in Puerto Rico.
(5) Any other type of insurer created pursuant to the special provisions of this Code.
History —Ins. Code, added as § 40.020 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4003/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4003 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4003 - Definitions
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For the purposes of this chapter:
(1) Creditor or claimant.— Means a person having a claim, whether matured or not, liquidated or not, secured or not, absolute, fixed or contingent.
(2) General assets.— Means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, “general assets” includes all such property or its proceeds in excess of the amount required to discharge the sum or sums of money secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors in more than one state shall be treated as general assets.
(3) Administrator.— Means any liquidator, rehabilitator, receiver, or conservator, as required by the context.
(4) Insurer.— Means any person who has transacted, purports to transact, is transacting or is licensed [to] transact an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision or conservation by any insurance commissioner. For the purposes of this chapter, any other persons included in § 4002 of this title shall be deemed to be insurers.
(5) Foreign insurer.— Means an insurer incorporated or organized pursuant to the laws of a state of the United States.
(6) Alien insurer.— Means a foreign insurer not organized pursuant to the laws of a state, but authorized to do business in one or more of such states.
(7) Guaranty association.— Means the Puerto Rico Miscellaneous Insurance Guaranty Association created by §§ 3801 et seq. of this title, and the Puerto Rico Life and Disability Insurance Guaranty Association created by §§ 3901 et seq. of this title, and any other similar entity now or hereafter created by the Legislature of Puerto Rico for the payment of claims of insolvent insurers.
(8) Foreign guaranty association.— Means any guaranty association now in existence or hereafter created by the legislature of any state.
(9) State.— Means the Commonwealth of Puerto Rico, any state, district or territory of the United States.
(10) Domiciliary state.— Means the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, his/her entry status upon entering the United States.
(11) Reciprocal state.— Means any state in which provisions similar to those of §§ 4015(1), 4048, 4049 and 4051–4053 of this title are substantially and effectively in force, and in which provisions requiring that the Commissioner or an equivalent official be the administrator of an insurer subject to a receivership proceeding are in effect, and in which provisions for the prevention of fraudulent conveyances and preferential transfers are in effect.
(12) Ancillary state.— Means any state other than a domiciliary state.
(13) Insolvency or insolvent.— Means the condition in which an insurer’s liabilities exceed its admitted assets pursuant to Chapter 5 of this Code.
(14) Just cause for a property or obligation.— Exists when:
(a) In exchange for such property or obligation, as a fair equivalent thereof, and in good faith, property is conveyed or services are rendered, or an obligation is incurred or an antecedent debt is satisfied, or
(b) such property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation received.
(15) Foreign country.— Means any nation, territory, place or region outside the sovereignty of the United States.
(16) Person.— Shall have the same meaning [as that given in] § 104 of this title.
(17) Receivership proceedings.— Means any proceeding commenced against an insurer for the purpose of its liquidation, rehabilitation, reorganization or conservation.
(18) Property of the insurer or property of the estate.— Means:
(a) Any right, title, and interest of the insurer in a property, whether tangible or intangible, including contractual rights and any other proprietary interest recognized under the laws of the Commonwealth of Puerto Rico;
(b) entitlements that existed prior to the entry of a rehabilitation or liquidation order and entitlements that may arise from the provisions of this chapter or from other provisions of law allowing the liquidator or rehabilitator to void prior transfers or to assert other rights, and
(c) all files, records and information that are otherwise the property of the insurer, in whatever form maintained, including, but not limited to, claims and claim files, lists of insured parties, application files, litigation files, rate books, underwriting policies, personnel records, or financial records, or similar records within the possession, custody, or control of the general agent, third-party administrator, data processing company, accountant, attorney, affiliate, parent company or subsidiary, or other person.
(19) Reinsurance.— Means a transaction or contract whereby a reinsurer agrees to indemnify a ceding insurer against all or part of any loss that the ceding insurer may sustain under a policy that the ceding insurer issues or shall issue.
(20) Special deposit claim.— Means any claim secured by a deposit made pursuant to a statute for the security or benefit of a limited class or classes of persons, but not including claims secured by general assets.
(21) Secured claim.— Means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but does not include a special deposit claim or a claim against general assets. The term also includes claims which more than four (4) months before the commencement of a receivership proceeding have become a lien upon specific assets by reason of judicial process.
(22) Preferred claim.— Means any claim with respect to which this chapter accords priority of payment from the general assets of the insurer.
(23) Transfer.— Shall include the sale or any other different, direct or indirect manner, of disposing of or parting with property or an interest thereon, or the possession thereof or of fixing a lien upon property or upon an interest thereon, absolutely or conditionally, voluntarily, by or without a judicial proceeding. The retention of the title of the lien on property delivered to a debtor shall be deemed a transfer suffered by the debtor.
(24) Receivership Court.— Means the hall of sessions of the Court of First Instance, San Juan Part, to which rehabilitation and liquidation proceedings are assigned.
History —Ins. Code, added as § 40.030 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4004/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4004 - Jurisdiction and venue
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4004 - Jurisdiction and venue
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(1) No receivership proceeding shall be initiated under this chapter by anyone other than the Commissioner and no court shall have jurisdiction to entertain, hear, or determine any proceeding initiated by any other person.
(2) No court of Puerto Rico shall have jurisdiction to entertain, hear or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation or receivership of any insurer, or praying for an injunction or restraining order or other relief preliminary to, incidental to or relating to such proceedings other than in accordance with this chapter.
(3) In addition to other grounds for jurisdiction provided for by the laws of Puerto Rico, a court of Puerto Rico having jurisdiction over the matter has jurisdiction over a person served pursuant to the Rules of Civil Procedure, App. III of Title 32, or other applicable provisions of law in an action brought by the administrator of a domestic insurer or an alien insurer domiciled in Puerto Rico:
(a) If the person served is obligated to the insurer in any way as general agent, authorized representative or proxy by virtue of a contract that may exist or has existed between the insurer and the general agent, or authorized representative or proxy in any action on or incidental to the obligation; or
(b) if the person served is an insurer or reinsurer who at any time has underwritten a reinsurance policy for an insurer against which a liquidation or rehabilitation order exists at the time the action is brought or who is an authorized representative or producer of or for the reinsurer, in any action on or incidental to the reinsurance contract; or
(c) if the person served is or has been an officer, manager, trustee, organizer, promoter, or other person in a position of comparable authority or influence over an insurer against which a rehabilitation or liquidation order is in force at the time the action is brought, in any action resulting from such a relationship with the insurer; or
(d) if the person served, at the time of initiating the rehabilitation or liquidation proceedings against the insurer, is or was holding assets in which the liquidator or rehabilitator claims an interest on behalf of the insurer in any action concerning the assets, or
(e) if the person served is obligated to the insurer in any way, in any action on or incidental to the obligation.
(4) In the court, on a motion from any party, finds that any action should, as a matter of substantial justice, be tried in a forum outside Puerto Rico, the court may enter an appropriate order to stay further proceedings on the action in Puerto Rico.
(5) Any action thus authorized shall be filed at and assigned to the Court of First Instance, San Juan Part, to which a rehabilitation or liquidation proceeding has been assigned.
(6) Service shall be made upon the person named in the petition pursuant to the Rules of Civil Procedure in effect.
(7) No person may intervene in any liquidation proceeding for the purpose of seeking or obtaining payment of any judgment, lien, or other claim of any kind. The claims procedure set forth in this chapter constitutes the exclusive means for procuring payment of claims from the liquidation estate.
(8) No law, regulation, or resolution that provides for the dismissal of a lawsuit on grounds of inaction, shall apply to the receivership proceedings.
(9) The rehabilitator or liquidator shall be exempted from payment of fees, duties, or taxes levied by the Commonwealth or any of its instrumentalities, dependencies or municipalities.
History —Ins. Code, added as § 40.040 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 4.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4005/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4005 - Injunctions and orders
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4005 - Injunctions and orders
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(1) An administrator appointed in a proceeding in accordance with this chapter may at any time request, and any court of general jurisdiction may issue stay orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to carry out the purposes of this chapter, to prevent among other things:
(a) The transaction of further business.
(b) The transfer of property.
(c) Interference with the receiver or with a proceeding under this chapter.
(d) Waste of the insurer’s assets.
(e) Dissipation and transfer of bank accounts.
(f) The institution or further prosecution of any actions or proceedings.
(g) The [obtainment] of preferences, judgments, attachments, garnishments of liens against the insurer, his/her assets or his/her policyholders.
(h) The levying of a writ execution against the insurer, its assets or its policyholders.
(i) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer.
(j) The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer.
(k) Any other threatened or contemplated action that might lessen the value of the insurer’s assets or prejudice the rights of the policyholders, creditors or shareholders or the administration of any proceeding under this chapter.
(2) The administrator may appear before any court, inside or outside of Puerto Rico to achieve the remedies described in subsection (1) of this section, or for the purpose of pursuing claims against any person.
(3) Except as provided by subsections (4) and (5) of this section or as otherwise provided by this chapter, the commencement of a receivership proceeding operates as a stay, applicable to any person, of:
(a) The commencement or continuation of any judicial, administrative or other proceeding against the insurer, including an arbitration or labor-management proceeding, that was or could have been commenced before the commencement of the receivership proceeding, or to procure payment of a claim that arose before the commencement of this proceeding.
(b) The enforcement against the insurer or against property of the insurer, of a judgment obtained before the commencement of the receivership proceeding.
(c) Any act to obtain or retain possession of property of the insurer or to exercise control over property or records of the insurer.
(d) Any act to collect a claim against the insurer that arose before the commencement of a receivership proceeding.
(e) The commencement or continuation of an action or proceeding against a reinsurer of the insurer, by the holder of a claim against the insurer, seeking to recover from the reinsurer the obligation due by the insurer.
(f) The commencement or continuation of any proceeding conducted by a government entity to cancel or revoke the authorization of an insurer to conduct insurance business.
(g) The termination, non-renewal, declaration of default, requirement of additional or replacement security or any other adverse action with respect to any contract, agreement or lease, including without being limited to policies, insurance and reinsurance contracts, bonds or surety undertakings, whether or not the insurer is a party to the contract, agreement, lease, policy, bond or surety undertaking, if the termination, non-renewal, declaration of default, requirement of additional or replacement security or any other adverse action is based solely on the fact that:
(i) The insurer is the subject of a receivership proceeding, and/or
(ii) one or more of the insurer’s authorization certificates have been suspended or revoked because the insurer is the subject of a receivership proceeding.
(4) The stay of the actions, as provided in this section, shall conclude ninety (90) days after the commencement of the receivership proceeding, unless for just cause, the Receivership Court orders to extend the term after notice to any affected party and hearing if deemed necessary. Provided, however, That any prescription term with respect to a claim against an insured shall be tolled during the stay and any extension as provided for in this section. No provision of this section shall affect the period of stay of the proceedings provided for in §§ 3818 and 3917 of this title, for guaranty associations to take the corresponding legal action with respect to said proceedings.
(5) Notwithstanding the provisions of subsection (3) of this subsection, the commencement of a receivership proceeding under this chapter shall not operate as a stay or prohibition of:
(a) Disciplinary actions instituted by a Commissioner of another state, including but not limited to the suspension of a license; except as established in subsection (3)(f) of this section;
(b) criminal proceedings;
(c) any act to perfect, maintain or continue an interest on a property of the insurer;
(d) setoffs as permitted by § 4027 of this title;
(e) enforcement of non-monetary government claims, judgments and proceedings;
(f) the presentment for collection of a negotiable instrument and notice of a protest proceeding;
(g) discharge by the guaranty association of the statutory responsibilities under the provisions of law applicable thereto;
(h) an audit by a government agency to determine tax liability, or
(i) a claim for any type of tax.
(6) Except as provided in subsection (8) of this section:
(a) The stay of any action against a property of the insurer as established by subsection (3) of this section, shall continue until the property is no longer a part of the estate of the insurer;
(b) The stay of any other action under subsection (3) of this section shall continue until the earlier between the following occurs:
(i) Closing of the receivership proceeding, or
(ii) Dismissal of a receivership proceeding.
(7) Notwithstanding the provisions of subsection (3), and to the extent that it is not inconsistent with § 4027 of this title, the claims against the insurer that arose before the commencement of the receivership proceeding established in this chapter, may be deemed to be counterclaims in any judicial, administrative or other action or proceeding initiated by or on behalf of the rehabilitator or liquidator against the holder of the claim.
(8) By request of an interested party and after notice and hearing, if deemed necessary by the Receivership Court, said court may grant relief from the stay provided in subsections (1) and (3) of this section by terminating, annulling, modifying, or conditioning the stay:
(a) For cause, or
(b) with respect to any stay of an act against property as established in subsection (3) of this section, if:
(i) The insurer has no interest in the property, and
(ii) the property is not necessary to establish an effective plan.
(c) For the purposes of this section, “cause” includes, but is not limited to the following situations:
(i) The rehabilitator or liquidator cancels a policy, surety bond or surety undertaking;
(ii) the creditor is entitled, by contract or by law, to require the insured party or the principal to have a policy, surety bond, or surety undertaking, and
(iii) the insured party or the principal fails to obtain a replacement policy, surety bond, or surety undertaking within the later date between the cancellation and the term allowed by contract or law.
(9) In a hearing to determine whether relief from the stay provided in subsections (1) and (3) of this section, as provided in subsection (8) of this section, is in order, the interested party shall have the burden of proof, which shall be established by clear and convincing evidence.
(10) The estate of an insurer that is injured by a willful violation of the provisions of this section, shall be entitled to actual damages caused including costs and attorney fees and in appropriate circumstances, the Receivership Court may impose additional sanctions.
(11) In relation to any stay or injunction granted by the provisions of this section, a bond shall not be required from the rehabilitator or liquidator.
History —Ins. Code, added as § 40.050 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 5.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4006/
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4006 - Cooperation of officers, owners and employees
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4006 - Cooperation of officers, owners and employees
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(1) Any officer, manager, director, trustee, owner, employee or authorized representative of an insurer and any other person with authority over, or in charge of any segment of the insurer’s affairs, shall cooperate with the Commissioner in any proceeding under this chapter or in any investigation preliminary to the proceeding. The term “person” as used in this section, shall include any person who exercises control directly or indirectly over the activities of the insurer through any holding company or other affiliate of the insurer. “To cooperate” shall include, but shall not be limited to the following:
(a) To reply promptly in writing to any inquiry from the Commissioner requesting such a reply, and
(b) to make available to the Commissioner any books, accounts, documents or other records or information or property of, or pertaining to the insurer which are in his/her possession, custody or control.
(2) No person shall obstruct or interfere with the Commissioner in the course of a receivership proceeding or an investigation preliminary or incidental thereto.
(3) This section shall not be construed to abridge otherwise existing legal rights, including the right to contest a petition for liquidation or other receivership proceedings or other orders.
(4) Any person included in subsection (1) of this section who fails to cooperate with the Commissioner or any person who obstructs or interferes with the Commissioner in the course of a receivership proceeding or any investigation preliminary or incidental thereto, or who violates any order the Commissioner has issued validly under this chapter may:
(a) Be sanctioned with imprisonment for a fixed term of one (1) year; if there were aggravating circumstances, the fixed penalty may be increased to a maximum of two (2) years; if there were extenuating circumstances, it may be reduced to a minimum of six (6) months and one (1) day.
The court, in its discretion, may impose the established fixed penalty of imprisonment, a penalty of a fine not greater than fifty thousand dollars ($50,000) or both, or
(b) after a hearing, be subject to the imposition by the Commissioner of a fine which shall not exceed fifty thousand dollars ($50,000) and furthermore be subject to the revocation or suspension of any insurance licenses issued by the Commissioner.
History —Ins. Code, added as § 40.060 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 6.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4007/
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4007 - Immunity
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4007 - Immunity
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There shall be no civil liability on the part of, and no cause of action of any nature shall arise against, the Commissioner or his/her representatives for any action or omission by them in the discharge of their powers and duties under this chapter.
History —Ins. Code, added as § 40.070 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 7.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4008/
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4008 - Continuation of receivership proceedings
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4008 - Continuation of receivership proceedings
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(1) The provisions of this chapter shall not apply to the receivership proceedings commenced before the date of effectiveness of this act, unless the Receivership Court, by request of the Commissioner, and after notice and holding of a hearing to show cause, directs that all or part of this chapter be applicable to such proceedings.
(2) No person, director, officer or shareholder of an insurer that has been subject to a receivership proceeding may contract, solicit or accept new businesses on behalf of the insurer.
History —Ins. Code, added as § 40.080 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 8.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4009/
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4009 - Rehabilitation—Grounds
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4009 - Rehabilitation—Grounds
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The Commissioner may request the Court of First Instance, San Juan Part, to issue an order authorizing him/her to rehabilitate a domestic insurer or an alien insurer domiciled in Puerto Rico on any one or more of the following grounds:
(1) The financial condition of the insurer is such that further business transactions would be hazardous to its policyholders, creditors and public in general.
(2) The insurer is in a capital or asset deficit.
(3) The insurer or its parent company, subsidiaries or affiliates have misappropriated, squandered or concealed property of the insurer or otherwise have improperly disposed of, used, transferred, sold, assigned, mortgaged, squandered, conveyed or removed the property of the insurer.
(4) The insurer, its parent company, subsidiaries or affiliates have misappropriated, removed, altered, destroyed, or failed to fulfill their duty to establish and maintain books, records, documents, accounts, vouchers, and other pertinent documents and information adequate for the determination of the financial condition of the insurer, or have failed to properly administer claims or adequately maintain claims records for the determination with respect to the same.
(5) The Commissioner has evidence that there was embezzlement of funds from the insurer, wrongful sequestration or diversion of the insurer’s assets, forgery or fraud affecting the insurer or other illegal conduct in, by or with respect to the insurer of such magnitude that it would be endangered for the solvency of the insurer.
(6) After having been [required by] the Commissioner, the insurer has failed to dismiss or remove any person who, in fact, has administrative or managerial authority in the insurer, whether an officer, manager, employee, general agent or any other person; if, after notice and hearing, the person has been found by the Commissioner to be dishonest, irresponsible, incompetent and untrustworthy to such an extent that the insurer’s business would be materially and adversely affected.
(7) The insurer in under control, whether by stock ownership or otherwise, and whether directly or indirectly, of a person or persons, found after notice and hearing to be dishonest.
(8) If a person who in fact has administrative or managerial authority over the insurer, whether an officer, manager, general agent, director, trustee, employee, shareholder, or other person, refuses to be examined under oath by the Commissioner concerning the insurer’s affairs, whether conducted in Puerto Rico or elsewhere, or if examined under oath, the person refuses to disclose pertinent information reasonably known to the person, and after reasonable notice of such a fact, the insurer fails to promptly and effectively terminate the person’s employment, position and influence over the management or administration of the insurer.
(9) If after required by the Commissioner, the insurer fails to promptly make available for examination any part of its own property, books, accounts, documents or other records, or those of any subsidiary or affiliate company under the control of the insurer, or those of any person having administrative authority over the insurer, provided that they belong to the insurer.
(10) The Insurer, without first obtaining the written consent of the Commissioner as required by the provisions of this Code, has transferred or attempted to transfer, in a manner contrary to the provisions of this Code, a substantial part of its property or business, or enters into a transaction, the effect of which is to substantially merge or consolidate its entire property or business with the property or business of any other person.
(11) The insurer or its property has been or is the subject of a request for the appointment of an administrator, trustee, judicial conservator or custodian or similar position of the insurer or its property in a manner other than as authorized under this Code, and such an appointment has been made or is imminent and the same might oust the courts of Puerto Rico [of] jurisdiction or might prejudice orderly receivership proceedings as provided by this chapter.
(12) Within the previous three years, the insurer has willfully violated his/her charter or articles of incorporation, his/her bylaws, this title or any order issued by the Commissioner pursuant to this title.
(13) The insurer has failed to pay any judgment entered by a court with jurisdiction, except that said nonpayment shall not be taken into consideration until sixty (60) days after the insurer has made an effort in good faith to contest the obligation whether it be before the Commissioner or in the courts.
(14) The insurer has failed to file its annual report or other financial report required by this Code within the term established, and after required in writing by the Commissioner, has failed to immediately provide a satisfactory excuse.
(15) The board of directors or the holders of a majority of the voting shares of the insurer, or a majority of those individuals with control over entities specified in § 4002 of this title, request or consent to rehabilitation under this chapter.
(16) The insurer has systematically engaged in the practice of reaching settlements with and obtaining releases from claimants and subsequently, delays payment unreasonably or fails to pay the agreed-upon settlements, or systematically attempts to compromise with claimants or creditors on the grounds that it is financially unable to pay its claims or debts in full.
History —Ins. Code, added as § 40.090 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 9.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4010/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4010 - Rehabilitation—Orders
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4010 - Rehabilitation—Orders
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(1) An order to rehabilitate the business of a domestic insurer or a foreign insurer domiciled in Puerto Rico, shall appoint the Commissioner and his/her successors in office as the rehabilitator, and shall direct the rehabilitator forthwith to take possession of the assets of the insurer and to administer them under the exclusive general supervision of the court. The filing or recording of the order with the Clerk of the Court of First Instance where the main office of the insurer is located or its main business is conducted, and in the case of real estate, with the property registrar where said assets are located, and in the case of personal property, with the registry where they may be recorded or any other registry of personal property, shall have the same effect of public notice as a deed, a bill of sale or any other evidence of title duly filed and recorded with the Property Registry would have upon third parties. The order to rehabilitate the insurer shall vest title in the rehabilitator over all the insurer’s assets.
(2) Any order issued under this section shall require the rehabilitator to be accountable solely to the Receivership Court. These reports shall be rendered as frequently as specified by the court in the order; Provided, however, That said reports must be filed at least every six (6) months.
(3) The entry of a rehabilitation order shall not constitute an anticipatory breach of any of the insurer’s contracts.
History —Ins. Code, added as § 40.100 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 10.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4011/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4011 - Rehabilitation—Powers and duties
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4011 - Rehabilitation—Powers and duties
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(1) The Commissioner, as rehabilitator, may appoint one or more special deputy commissioners, who shall have all the powers and responsibilities granted to the rehabilitator under this section, and the Commissioner may appoint such counsel, clerks and assistants as deemed necessary. The remuneration of the special deputy, counsel, clerks and assistants, and all expenses incurred in the take over of the insurer and in conducting the proceedings, shall be fixed by the Commissioner with the approval of the court and paid from the funds or assets of the insurer. The persons appointed under this section shall serve at the discretion of the Commissioner.
(2) The rehabilitator may take such action as he/she deems necessary or appropriate to reform and revitalize the insurer, including but not limited to the cancellation of policies, insurance and reinsurance contracts, surety bonds, surety undertaking or, with the authorization of the Receivership Court, the transfer of policies to an assuming solvent insurer. Furthermore, he/she shall have all the powers of the directors, officers and managers of the insurer, whose authority shall be suspended, unless they be again delegated by the rehabilitator. He/she shall likewise have full power to direct and administer, hire and discharge employees as well as to deal with the property and business of the insurer. The rehabilitator shall not be liable for policies issued or renewed in good faith while in rehabilitation or by any other action taken by him/her as rehabilitator.
(3) If it is evident to the rehabilitator that there has been criminal or tortious conduct or a breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, employee, general agent, authorized representative, producer, affiliate or other person, the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer.
(4) If the rehabilitator determines that a reorganization, consolidation, conversion, reinsurance, merger or other transformation of the insurer is appropriate, he/she shall prepare a plan to execute such changes. Upon request of the rehabilitator for approval of the plan, and after such notices and hearings as the court may order, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified.
(5) The rehabilitator may assert all defenses available to the insurer against third parties, including statutes on limitations and fraud. A waiver of a defense by the insurer, while one of the grounds to request rehabilitation is present or after a rehabilitation or liquidation order has been issued, does not bind the rehabilitator.
(6) The rehabilitator shall have the power to prevent fraudulent transfers under §§ 4023 and 4024 of this title.
(7) The enumeration in this section of the powers and duties of the rehabilitator shall not be construed as a limitation upon the rehabilitator and does not exclude in any manner his/her right to do other acts not specifically enumerated or otherwise established herein, but which may be otherwise provided as may be necessary or appropriate to assist him/her in the rehabilitation process.
History —Ins. Code, added as § 40.110 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 11.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4011a/
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4011a - Rehabilitation—Plan
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4011a - Rehabilitation—Plan
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(1) The rehabilitator shall prepare and file a plan to effect rehabilitation with the Receivership Court within one (1) year after the date on which the rehabilitation order is entered or subsequently if the Receivership Court should so allow. After having filed the plan for approval and after the notice and hearings the Receivership Court may order, the Receivership Court may either approve or disapprove the plan proposed or modify the same and approve it as modified. Every plan approved under this section shall comply with the applicable laws and be fair and equitable for all parties involved. If the plan is approved, the rehabilitator shall carry out the plan as approved. In the case of a life insurer, the plan proposed may include the imposition of a preemptive attachment on policies of the insurer, if all rights of the shareholders are waived. A life insurer plan may also provide for the imposition of a moratorium upon loan and cash advance rights under the policies for a period not to exceed one (1) year from the date on which the order approving the rehabilitation plan is entered, unless the Receivership Court, for just cause, extends the moratorium.
(2) Once a plan is filed, any party in interest may object to the plan.
(3) The plan shall:
(a) Except as provided in subsection (E) of this Section [sic], provide no less a favorable treatment of a claim or class of claims than would occur in liquidation, unless the holder of a particular claim or interest agrees to a less favorable treatment of that particular claim or interest;
(b) provide adequate means for the implementation of the plan;
(c) contain information concerning the financial condition of the insurer and the operation and effect of the plan, as far as is practicable in light of the nature and history of the insurer, the condition of the insurer’s books and records, and the nature of the plan, and
(d) provide for the disposition of books, records, and documents and of any other information relevant to the duties and obligations covered by the plan.
(4) A plan may include any other provisions not inconsistent with the provisions of this chapter, including, but not limited to:
(a) Payment of distributions;
(b) assumption or reinsurance of all or portions of the insurer’s remaining liabilities, and transfer of assets, books and records to an authorized insurer or other entity;
(c) to the extent appropriate, application of market conduct standards established for insurers to any entity administering claims on behalf of the rehabilitator or directly assuming the liabilities of the insurer;
(d) contracting with a guaranty association of a state or any other qualified entity to conduct the administration of claims;
(e) annual independent financial and compliance audits of any entity administering claims on behalf of the rehabilitator that is not otherwise subject to examination pursuant to [the] Puerto Rico Insurance Code, and
(f) termination of the insurer’s liabilities, except for those under insurance policies as of a date certain.
(5) A plan may separately designate and treat one or more claim subclasses consisting only of those claims within the classes reduced to de minimis amounts. A de minimis amount shall be an amount equal to or lesser than a maximum de minimis amount approved by the Receivership Court as being reasonable and necessary for appropriate administration.
History —Ins. Code, added as § 40.111 on Dec. 14, 2007, No. 206, § 12.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4012/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4012 - Rehabilitation—Actions by and against the rehabilitator
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4012 - Rehabilitation—Actions by and against the rehabilitator
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(1) Any court of Puerto Rico before which any action or proceeding in which the insurer is a party, or is obliged to defend a party, is pending when a rehabilitation order against the insurer is entered, shall stay the action or proceeding for ninety (90) days or for such additional time as may be necessary for the rehabilitator to obtain proper representation and prepare for ulterior proceedings. The rehabilitator shall take whichever action he/she may deem necessary in respect to the pending litigation in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside of Puerto Rico and shall whenever necessary petition stays from the courts having jurisdiction over such litigation so as to protect the estate of the insurer.
(2) No statute of limitation or defense of laches shall run with respect to any action by or against the insurer between the date of filing a petition for the appointment of a rehabilitator for the insurer and the order granting or denying such a petition. Any action by or against the insurer that might have been commenced when the petition was filed may be commenced within ninety (90) days after the rehabilitation order is issued or the petition is denied.
(3) Any guaranty association or foreign guaranty association covering life or disability insurance shall have standing to appear in any court proceeding concerning the rehabilitation of a life or disability insurer if such an association would have to act or might become liable to act as a result of the rehabilitation.
History —Ins. Code, added as § 40.120 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 13.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4013/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4013 - Rehabilitation—Termination
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4013 - Rehabilitation—Termination
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(1) Whenever the Commissioner believes that further efforts to rehabilitate an insurer would substantially increase the risk of loss to policyholders, creditors or the general public, or that the same would be futile, he/she may petition the Receivership Court for a liquidation order. A petition under this paragraph shall have the same effect as a petition under § 4014 of this title. The rehabilitator shall coordinate a transition plan for the liquidation with guaranty associations that may be obliged under a liquidation proceeding.
(2) The protection of the interests of the insured parties, plaintiffs and the general public requires the efficient and prompt management of all obligations under an insurance policy, reason for which, if the payment of the obligations under the policies of an insurer under rehabilitation is suspended for a period of six (6) months at any time after the rehabilitator is appointed as such and he/she has not submitted a plan to the Receivership Court, as provided in § 4011 of this title, the rehabilitator may petition the Receivership Court for a liquidation order or seek an order to extend the suspension period, after showing just cause therefor.
(3) The rehabilitator may petition the Receivership Court at any time for an order to terminate the rehabilitation of an insurer. The Receivership Court shall also allow the directors of the insurer to petition an order to terminate the rehabilitation and may order payment from the estate of the insurer of such costs and other expenses related to their petition if the petition is granted. If the Receivership Court finds that rehabilitation has been accomplished and that grounds for rehabilitation under § 4009 of this title no longer exist, it shall order that possession of property and control over business be restored to the insurer. The Receivership Court may also reach that conclusion and issue such an order at any time motu proprio.
History —Ins. Code, added as § 40.130 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 14.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4014/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4014 - Liquidation—Grounds
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4014 - Liquidation—Grounds
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The Commissioner may petition the Court of First Instance for an order authorizing him/her to liquidate a domestic insurer or an alien insurer domiciled in Puerto Rico based on:
(1) Any grounds for a rehabilitation order as specified in § 4009 of this title, except for subsections (6), (13), (14), and (15) thereof, whether or not there has been a previous order directing the rehabilitation of the insurer;
(2) that the insurer is insolvent, or
(3) that the holders of a majority of the insurer’s voting stock petition for liquidation or consent thereto pursuant to this chapter.
History —Ins. Code, added as § 40.140 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 15.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4015/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4015 - Liquidation—Orders
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4015 - Liquidation—Orders
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(1) An order to liquidate the business of a domestic insurer shall appoint the Commissioner or any successor in office as the liquidator and authorize him/her to take immediate possession of the assets of the insurer and administer the same under the exclusive general supervision of the Receivership Court. The liquidator shall be legally vested with title to all the property, contracts and rights of action, and to all the books and records of the insurer ordered to be liquidated, wherever located, as of the date of entry of the final liquidation order. The liquidator shall be empowered to negotiate and reduce to cash, wholly or partially, any assets that may be needed to pay for the administration of the liquidation, provided he/she obtains the maximum yield possible in said negotiation. The filing or recording of the order with the Clerk of the Part of the Court of First Instance where the main office of the insurer is located, or its main business is conducted, and in the case of real estate, with the Property Registrar where said property is located, and in the case of personal property, in the Registry where the same may be recorded, shall have the same effect of notice as a deed, a bill of sale, or any other evidence of title duly filed and recorded with the Property Registry would have upon third parties.
(2) Upon issuance of the order, the rights and obligations of any such insurer and of his/her policyholders creditors, shareholders, members and all other persons interested in his/her estate shall be defined as they exist on the date the order of liquidation is issued, except as provided in §§ 4016 and 4034 of this title.
(3) An order to liquidate the business of an alien insurer domiciled in Puerto Rico shall be on equal terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the businesses in any state shall be the only assets and businesses included therein.
(4) At the time of petitioning for an order of liquidation, or at any time thereafter, the Commissioner, after making appropriate findings of an insurer’s insolvency, may petition the court for a judicial declaration of such insolvency. After the corresponding notices and hearings, the court may issue the declaration.
(5) Any order issued under this section shall require the liquidator to be accountable solely to the court. These reports shall be rendered at such intervals as specified by the court in its order; Provided, however, That said reports shall be rendered at least every six (6) months.
(6) In the event that a liquidation order is rendered ineffective, the insurer shall not be released from the liquidation proceeding until the insurer complies with the conditions provided in § 4042a of this title.
History —Ins. Code, added as § 40.150 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 16.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4016/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4016 - Liquidation—Continuation of coverage
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4016 - Liquidation—Continuation of coverage
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(1) All policies, other than life or disability insurance in effect at the time of issuance of an order of liquidation, shall only continue in effect for the lesser of the following periods:
(a) Thirty (30) days from the date of the liquidation order;
(b) the expiration of the policy coverage;
(c) the date in which the insured replaced the insurance policy with equivalent insurance in another insurer, or has otherwise terminated the policy;
(d) the liquidator has transferred the policy obligations pursuant to § 4018(1)(h) of this title.
(e) The date proposed by the liquidator and approved by the Receivership Court to cancel coverage.
(2) An order of liquidation under § 4015 of this title shall terminate the policy coverage at the time specified in subsection (1) of this section for the purpose of any other statute.
(3) Life or disability policies shall continue in force for the period and under the terms provided by any applicable guaranty association or foreign guaranty association.
(4) Life or disability policies, or any period or coverage thereof not covered by a guaranty association or foreign guaranty association shall terminate as provided in subsections (1) and (2) of this section.
(5) The cancellation of any bond or surety undertaking shall not release any cosurety or guarantor.
(6) Except as otherwise provided in this chapter, the obligations of the insolvent insurer’s reinsurers shall not cease by the termination of policies ceded to reinsurers.
History —Ins. Code, added as § 40.160 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 17.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4017/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4017 - Liquidation—Dissolution
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4017 - Liquidation—Dissolution
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(1) The Commissioner may petition for an order to dissolve the corporate existence of a domestic insurer or the branch of an alien insurer domiciled in Puerto Rico at the time he/she applies for liquidation. The court shall order the dissolution of the insurer by petition of the Commissioner at the time or after the liquidation order is granted. If dissolution has not been ordered previously, it shall be effected by legal effect upon the discharge of the liquidator if the insurer is insolvent, but the court may order the dissolution upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.
History —Ins. Code, added as § 40.170 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4018/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4018 - Liquidation—Powers
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4018 - Liquidation—Powers
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(1) The liquidator shall be empowered to:
(a) Appoint an Assistant Liquidator to act for him/her under this chapter. The Assistant Liquidator shall have all the powers granted by this section to the liquidator. The Assistant Liquidator shall serve for as long as the liquidator may wish.
(b) Contract employees and agents, legal counsel, actuaries, accountants, appraisers, consultants, and such other personnel as he/she may deem necessary to assist him/her in the liquidation.
(c) Set fair compensation for the Assistant Liquidator and the employees and agents, legal counsel, actuaries, accountants, appraisers and consultants, with the approval of the Receivership Court.
(d) Pay reasonable compensation to persons appointed and defray from the funds or assets of the insurer all expenses incurred while taking posession, conserving, conducting, liquidating and disposing of, or otherwise dealing with the business and property of the insurer.
(e) Hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to susbcribe his/her testimony after it has been correctly transcribed; and in connection therewith to require the production of any books, papers, records or other documents which he/she deems relevant to the inquiry.
(f) Collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose:
(i) File timely action in other jurisdictions in order to forestall garnishment and attachment proceedings against such debts;
(ii) Take any other action necessary or expedient to collect, conserve or protect his/her assets or property, including the power to sell, adjust, settle or assign debts for collection upon such terms and conditions deemed most convenient, and
(iii) Exhaust all resources available to the creditors to enforce their claims.
(g) Conduct public and private sales of the property of the insurer with the approval of the Receivership Court.
(h)
(i) Use assets of an insurer under a liquidation order to transfer obligations to an assuming solvent insurer if the transfer can be arranged without prejudice to applicable priorities pursuant to § 4039 of this title.
(ii) Use the assets of an insurer under liquidation to transfer the insurer’s obligations under a surety bond or surety undertaking contract as well as collateral held by the insurer to secure reimbursement obligations of the principals under the surety bond or surety undertaking to an assuming solvent insurer, if the transfer can be arranged without prejudice to applicable priorities under § 4039 of this title. Furthermore, if all insurers, principals, third party claimants, and creditors under the policies, or surety bond or surety undertaking contracts agree, or if the Receivership Court so orders, the estate of the insurer shall no longer be liable for policies or surety bond or surety undertaking contracts after the transfer is completed.
(i) Acquire, mortgage, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, with the approval of the Receivership Court, any property of the insurer at its market value or under such terms and conditions that are fair and reasonable. He/she shall also have the authority to execute, acknowledge and deliver deeds, assignments, releases and other necessary and proper documents to carry out any sale of property or other transaction pertinent to the liquidation.
(j) Borrow money, whether or not secured by the assets of the insurer, and execute and deliver, with the approval of the Receivership Court, all documents needed for such a transaction with the purpose of expediting the liquidation. Any money borrowed may be repaid as an administrative expense and shall have priority over any other Class 1 claim.
(k) Enter into such contracts needed for the execution of the order for liquidation and to affirm or disavow any contract to which the insurer is a party.
(l) Continue the proceedings and to file on behalf of the insurer or in his/her own behalf, each and every one of the suits and other legal proceedings in Puerto Rico or elsewhere, or to abandon the prosecution of claims he/she deems unprofitable to pursue further. If the insurer is dissolved pursuant to § 4017 of this title, he/she shall have the power to apply to any court in Puerto Rico or elsewhere, for permission to have the insurer substitute him/her as plaintiff.
(m) Proceed with any existing action on behalf of all policyholders, members, creditors or shareholders of the insurer, against any officer of the insurer, or against any other person.
(n) Take possession and transfer any records and property of the insurer to the offices of the Commissioner or to any other place as may be convenient for the efficient and orderly execution of the liquidation. The guaranty associations and the foreign guaranty associations shall have reasonable access to the records of the insurer, as may be necessary, so that they can carry out their statutory obligations.
(o) Deposit in one or more banks in Puerto Rico the amounts required to defray current administrative expenses and the distributions of dividends to the policyholders.
(p) Invest prudently and in accordance to Chapter 6 of this Code, the amounts not currently needed, unless the Receivership Court orders otherwise.
(q) File any necessary documents with the corresponding Property Registry in Puerto Rico, or with any other registry wherever any property of the insurer is located.
(r) Assert all defenses available to the insurer against third parties, including statutes of limitations, fraud and usury. A waiver of any defense by the insurer after a petition for liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or a foreign guaranty association has an obligation to assume the defense in a lawsuit, the liquidator shall give precedence to such an obligation and may only assume it in the absence of a defense by such guaranty associations.
(s) Exercise and enforce all the rights, remedies and powers of any creditor, shareholder, policyholder or member, including the power to void any transfer or lien that may be granted by law and which is not included in §§ 4023 and 4025 of this title.
(t) Intervene in any proceeding wherever instituted, that might lead to the appointment of a receiver or a trustee, and to act as receiver or trustee when the appointment is offered.
(u) Enter into agreements with a receiver or a Commissioner of any State regarding the rehabilitation, liquidation, conservation or dissolution of an insurer doing business in both jurisdictions.
(v) The liquidator shall not be obligated to defend the insurer in any action against the insurer or an insured party. Any insured party not defended by a guaranty association may provide for his/her own defense and include the cost thereof as part of his/her claim, if such a defense was part of the obligation of the insurer. The right of the liquidator to contest coverage on a particular claim shall be preserved with no need for an express reservation of rights.
(w) The liquidator is hereby vested with all the rights of the entity or entities in liquidation.
(2) The enumeration of the powers and authority of the liquidator in this section shall not be construed as a limitation upon the liquidator and does not exclude in any manner the right to take other actions or engage in other acts not specifically enumerated or otherwise provided for to the extent necessary or appropriate for the accomplishment of or in aid of liquidation purposes.
History —Ins. Code, added as § 40.180 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 18.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4019/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4019 - Liquidation—Notice
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4019 - Liquidation—Notice
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(1) Unless the Receivership Court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible:
(a) By first-class mail or other speedy printed means of communication, by telephone or electronic mail to the Insurance Commissioner of every jurisdiction where the insurer is doing insurance business;
(b) by first-class mail or electronic mail to any guaranty association or foreign guaranty association which is or may be obligated as a result of the liquidation;
(c) by first-class mail or electronic mail to all general agents, authorized representatives and producers who have placed insurance business with the insurer and all others the liquidator deems appropriate to their last known address, and
(d) by certified mail or electronic mail to any person known to have or reasonably expected to have claims against the insurer, including all policyholders, to their last known address as shown in the records of the insurer and also, through the publication of a notice once a week for three consecutive weeks in two newspapers of general circulation in Puerto Rico and other public places deemed appropriate by the liquidator.
(2) The notice to potential claimants pursuant to subsection (1) of this section shall require that they file with the liquidator their claims together with the corresponding proofs, as established in § 4033 of this title, on or before the date fixed by the Receivership Court for the filing of claims. Said term shall not exceed a period of six months from the date of issue of the liquidation order or any extension thereof that the Receivership Court may set for just cause. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have the obligation of keeping the liquidator informed of any change of address.
(3) If notice is given according to this section, the distribution of the assets of the insurer pursuant to this chapter shall be final with respect to all claimants, whether or not they have received the notice.
(4) The liquidation order notice shall contain the following information:
(a) A statement that the insurer has been placed in liquidation;
(b) a statement explaining that certain actions are stayed under § 4005 of this title and, if deemed necessary by the liquidator, describing any other relief ordered by the Receivership Court;
(c) a statement on the continuation of coverage of the policies in effect and on the date of termination;
(d) to the extent applicable, a statement of the coverage provided by guaranty associations for all or part of the policy benefits in accordance with the provisions governing guaranty associations;
(e) a statement of the deadline for filing claims and the requirements for filing the claims form pursuant to § 4033 of this title;
(f) a statement of the date, time, and location of any status hearing scheduled at the time the notice is sent;
(g) a description of the process for obtaining notice of matters before the Receivership Court, and
(h) other information as the liquidator or the Receivership Court deems appropriate.
(5) Notwithstanding the established above, the liquidator shall not be bound to locate a person or entity whose address does not appear on the records of the insurer, or if the notice is returned to the liquidator because its delivery at the address that appears on the books and records of the insurer was unsuccessful. In said cases, a notification through a notice in the newspaper, as required in this chapter, or a received notice shall be sufficient. The written certification of the liquidator, or of any other person acting on his/her behalf, attesting that the notices were deposited in the mail or transmitted electronically, shall be prima facie evidence that they were sent and received. It shall be the obligation of every claimant to keep the liquidator informed of any changes of address.
(6) Notwithstanding the provisions of subsection (1) of this section, by request of the liquidator, the Receivership Court may establish that the publication of the notice required by this section shall be sufficient notice to those persons who have an occurrence policy that matured more than four years before the liquidation order was issued, and under which no claims are pending; or the Receivership Court may order a new notice to those persons as it may deem appropriate.
History —Ins. Code, added as § 40.190 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 19.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4020/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4020 - Liquidation—General agents authorized representatives and producers; duties
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4020 - Liquidation—General agents authorized representatives and producers; duties
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(1) Any person who receives a notice in the manner prescribed in § 4019(1)(c) of this title to the effect that an insurer with which he/she placed business as a general agent, authorized representative or producer is subject to a liquidation order, shall give notice of the liquidation order within thirty (30) days following the notice. The notice shall be sent by first-class mail, evidenced through a certificate of mailing, to every policyholder or any other person named in every policy issued by the insurer through the general agent, authorized representative or producer to the last address that appears on the corresponding records. A policy shall be deemed issued through a general agent, authorized representative or producer if any of the latter has proprietary interest on the maturity of the policy or if the authorized representative has had in his/her power a copy of the policy at any time during the life thereof, except when the ownership on the maturity of the policy has been transferred to another person. The written notice shall include the name and address of the insured party and of the general agent, authorized representative or producer, the identification of the affected policy and the nature of the liquidation proceeding, including the termination of coverage as described in § 4016 of this title. Any general agent, authorized representative or producer who is bound to give notice pursuant to this section shall render to the liquidator a sworn report of compliance not later than forty-five (45) days [following] the notification of the order.
(2) Any general agent, authorized representative or producer who fails to give notice of having rendered a compliance report, as required by subsection (1) of this section, may be subject to a fine that shall not exceed five thousand dollars ($5,000) and the suspension of his/her license, after a hearing before the Commissioner.
Regardless of the proprietary interest of the authorized representative, if any, on the maturity of the policy, the liquidator shall have the sole power to determine when and under what terms and conditions the policy is cancelled or transferred.
History —Ins. Code, added as § 40.200 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 20.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4021/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4021 - Liquidation—Actions by and against the liquidator
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4021 - Liquidation—Actions by and against the liquidator
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(1) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in Puerto Rico, no action at law shall be brought against the insurer or the liquidator, whether in Puerto Rico or elsewhere, nor shall an action of that nature be maintained or entered after issuance of such order. The courts in Puerto Rico shall give full faith and credit to injunctions against the company or the liquidator or the continuation of existing actions against the liquidator or the company when such injunctions are included in an order for liquidation issued according to corresponding provisions in effect in other states. Whenever, in the liquidator’s judgment and for the protection of the estate of the insurer, the intervention of the liquidator is required in an action against the insurer that is pending outside of Puerto Rico, the liquidator may intervene in such an action. The liquidator may cover the expenses for the defense of any action in which he/she intervenes from the estate of the insurer pursuant to this section.
(2) The liquidator may, upon or after the issuance of a liquidation order, within four (4) years or within the period of time additional to those four (4) years as applicable laws may allow, file suit or institute a proceeding on behalf of the estate of the insurer upon any cause of action in which the prescriptive term established by the applicable laws has not expired at the time of filing the petition for such an order. When, by any agreement, a prescriptive term is fixed for filing a suit or institute a proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, lawsuit, notice or like action or when during any proceeding, judicial or otherwise, a prescriptive term is fixed, either in the proceeding or by applicable laws, to take any action, file any claim or plea or engage in any act, and when in such a case the term has expired at the date of filing the petition, the liquidator may, for the benefit of the estate of the insurer, take the action required of or allowed to the insurer within a period of one hundred and eighty (180) days after filing a liquidation order or within such additional time, as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.
(3) No prescriptive term or defense of laches shall run with respect to any action against the insurer during the period between the date of filing a petition for the liquidation order and the denial thereof. Any action against the insurer that might have been commenced when the petition was filed may be filed for at least sixty (60) days after the petition is denied.
(4) Any guaranty association or foreign guaranty association shall have standing to appear in any judicial proceeding concerning the liquidation of an insurer if such association is obligated or might be obligated to take any action as a result of the liquidation.
—Ins. Code, added as § 40.210 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 21.
History
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4022/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4022 - Liquidation—Collection and list of assets
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4022 - Liquidation—Collection and list of assets
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(1) As soon as feasible, after a liquidation order, but not later than one hundred and eighty (180) days thereafter, the liquidator shall prepare in duplicate a financial report of the insurer which includes at least a balance sheet and an income and expense report. This report shall be continually submitted to the Receivership Court at intervals specified by the Receivership Court in the liquidation order; Provided, That this report shall be submitted at least every six (6) months. The Receivership Court may request any other information it deems appropriate.
(2) The guaranty association shall submit a report to the liquidator within one hundred and twenty (120) days after the liquidation order is issued and subsequently every four (4) months. The report shall be submitted using the format provided therefor by the National Association of Insurance Commissioners. Said report shall also be submitted to the Receivership Court.
(3) The liquidator shall reduce the assets, with the authorization of the Receivership Court, to a degree of liquidity consistent with the effective execution of the liquidation, except as provided in § 4015(1) of this title.
(4) A petition to the court for the distribution of assets under § 4031 of this title meets the requirements of subsection (1) of this section.
History —Ins. Code, added as § 40.220 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 22.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4023/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4023 - Liquidation—Fraudulent transfers prior to petition
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4023 - Liquidation—Fraudulent transfers prior to petition
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(1) Any transfer made and completed and any obligation incurred by an insurer within two (2) years prior to successfully filing a petition for rehabilitation or liquidation pursuant to this chapter, is fraudulent as to then existing and future creditors if made or incurred without just cause or with an actual intent to hinder, delay or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer subject to a rehabilitation or liquidation proceeding pursuant to this chapter, and which is fraudulent according to this section, may be voided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a fair equivalent value and except when a purchaser, lienor or obligee who in good faith has given a consideration less than fair for such transfer or lien or obligation may retain the property, lien or obligation as security for repayment. The court may order, on due notice, that any transfer or obligation for which a consideration less than fair has been given to be preserved for the benefit of the estate and in such an event, the receiver shall succeed to and may exercise the rights of the purchaser, lienor or obligee.
(2)
(a) A transfer of property other than real property, shall be deemed to have been made and completed when it has been so perfected that no subsequent lien obtained by legal or equitable proceedings on an oral contract could become superior to the rights of the transferee pursuant to § 4025(3) of this title.
(b) A transfer of real property shall be deemed to have been made or completed when it becomes so perfected that no subsequent bona fide purchaser of the insurer can obtain rights superior to those of the transferee.
(c) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to have been made immediately before the filing of the successful petition.
(d) The provisions of this subsection shall apply whether or not there are or have been creditors who might have obtained a lien or whether or not there are or have been persons who might have been bonafide purchasers.
(3) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be voided by the receiver under subsection (1) of this section if:
(a) The transaction consists of the termination, adjustment, or liquidation of a reinsurance contract in which the reinsurer is released from complying with any part of his/her obligation to pay the originally specified share of losses that had occurred prior to the date of the transaction, unless the reinsurer gives a fair value for the release, and
(b) part of the transaction took place within three years prior to the date of filing of the petition through which the receivership was commenced.
History —Ins. Code, added as § 40.230 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 23.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4024/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4024 - Liquidation—Fraudulent transfers after the petition
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4024 - Liquidation—Fraudulent transfers after the petition
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(1) After a petition for rehabilitation or liquidation has been filed, the transfer of any of the real property of the insurer to a bona fide purchaser shall be valid against the receiver if fair value was paid, and if fair value was not paid, the transferee or purchaser shall retain a lien on the property up to the value paid for said property. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for an order of rehabilitation or liquidation with the Property Registrar wherever the real property in question is located. The power of any United States Federal Court or the court of any state or any other jurisdiction to effect or authorize a judicial sale of real property of the insurer in any county or municipality in a state shall not be impaired by the pendency of such a proceeding unless the copy of the aforesaid petition is recorded prior to the consummation of the sale in the section of the Property Registry corresponding to the county or municipality.
(2) After a petition for rehabilitation or liquidation has been filed and before the receiver takes possesion of the property of the insurer, or before an order of rehabilitation or liquidation is granted:
(a) The transfer of any property of the insurer, other than real property, made to a person acting in good faith shall be valid for the receiver if made for its fair value or if not made for its fair value the transferee shall have a lien on the property to the extent of the value paid for it.
(b) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the debt or return the property, or any part thereof, to the insurer or upon his order, with the same effect as if the petition were not pending.
(c) A person having knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith.
(d) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as provided in this section, no transfer by or on behalf of the insurer made after the date of the petition for rehabilitation or liquidation by a person other than the rehabilitator or liquidator shall be valid against the aforementioned.
(3) None of the provisions of this chapter shall impair the negotiability of currency or other negotiable instruments.
History —Ins. Code, added as § 40.240 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4025/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4025 - Liquidation—Voidable preferences and liens
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4025 - Liquidation—Voidable preferences and liens
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(1)
(a) A preference is the transfer of any property or interest on a property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt made or accepted by the insurer within one (1) year prior to filing a successful petition for liquidation pursuant to this chapter, whose effect may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would have received. If a liquidation order is filed while the insurer is already subject to a rehabilitation order, then these transfers shall be deemed to be preferences if completed or accepted within one (1) year prior to filing the successful petition for rehabilitation or within the two (2) years prior to filing the successful petition for liquidation, whichever time is shorter.
(b) The liquidator may annul a preference if:
(i) The insurer was insolvent at the time of the transfer; or
(ii) the transfer was made within one hundred and twenty (120) days prior to filing the petition; or
(iii) the creditor receiving the same or to be benefited thereby or his/her agent in the transaction had, at the time of the transaction, reasonable cause to believe that the insurer was insolvent or was about to become insolvent, or
(iv) the creditor receiving the same was an officer, employee or attorney or other person who, in fact, was in a position of influence over the insurer comparable to that of an officer, regardless of whether or not he/she held such a position, or an affiliate corporation, or a shareholder directly or indirectly holding more than five percent of any type of stock issued by the insurer or any other person, firm, corporation, partnership or group of persons with whom the insurer conducted business on a regular basis.
(c) When the preference is voidable the liquidator may recover the property, or if it has been converted, its value from any person who has received or converted it, except that when a bona fide purchaser or lienor has paid less than fair value, he/she shall have a lien upon the property to the extent of the consideration given by him/her. When a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator.
(2)
(a) A transfer of property other than real property shall be deemed to be made or completed when it is so perfected that no subsequent lien obtainable by legal or equitable proceedings with relation to an oral contract could become superior to the rights of the transferee.
(b) A transfer of real property shall be deemed to be made or completed when it becomes so perfected that no subsequent bona fide purchaser who has directly acquired it from the insurer could obtain rights superior to those of the transferee.
(c) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be established.
(d) A transfer not perfected prior to the filing of the petition for liquidation is deemed to have been made immediately before the filing of the successful petition.
(e) The provisions of this subsection apply whether or not there are or have been creditors who could have obtained a lien or whether there are or have been persons who could have been bona fide purchasers.
(3)
(a) A lien obtained through legal or equitable proceedings under an oral contract is one arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree or upon attachment, garnishment, execution or like process whether before, upon or after the judgment or decree and whether before or upon execution. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.
(b) A lien obtained by legal or equitable proceedings could become superior to the rights of a transferee, or a buyer could obtain rights superior to those of a transferee within the context of subsection (2) of this section, if such consequences would ensue only from the lien or the purchase itself, or from the lien or the sale followed by any action wholly under the control of the respective lienholder or buyer, with or without the aid of ministerial action by public officers. Such a lien, however, cannot become superior and such sale could not create superior rights for the purposes of subsection (2) of this section, through any actions subsequent to the obtaining of such a lien or subsequent to such a purchase which requires the agreement or concurrence of any third party, or which requires any further judicial action or ruling.
(4) A transfer of property for or on account of a new and contemporaneous consideration which, pursuant to subsection (2) of this section, is deemed to be made and completed after the transfer because of delay in perfecting it, does not thereby become a transfer for or on account of an antecedent debt, if any action required by the applicable law in order to perfect the transfer as against the liens or against the rights of bona fide purchasers are performed within twenty-one (21) days or within the term expressly established by law, whichever is less. A transfer to secure a future loan, if it were in fact to be made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.
(5) If any lien deemed voidable pursuant to subsection (1)(b) of this section has been dissolved by the furnishing of a bond or other obligation, the guarantor of which has been indemnified directly or indirectly by the transfer or the creation of a lien upon the property of an insurer prior to the filing of a petition under this chapter, which results in an order for liquidation, the indemnifying transfer or lien shall also be deemed voidable.
(6) The property affected by a lien deemed voidable pursuant to subsections (1) and (5) of this section shall be discharged from such lien, and the same and any other indemnifying property transferred to, or for the benefit of of a guarantor, shall pass to the liquidator, except that the Court may, on due notice, order that the lien be preserved for the benefit of the estate and may also direct that the transfer be executed as may be proper to evidence the title of the liquidator.
(7) The Receivership Court shall have summary jurisdiction over any proceeding by the liquidator to hold hearings and determine the rights of the parties under this section. Reasonable notice of the hearings in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. When an order is issued for the recovery of indemnifying property in kind or for the voiding of an indemnifying lien, the court, by petition of any interested party, shall determine in the same proceeding the value of the property or lien, and if the value were [less] than the amount for which the property is [indemnified] or [less] than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value to the liquidator, as ascertained by the court, on the reasonable dates set by the court.
(8) The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and voided by the liquidator, or when the property is retained under subsection (7) of this section, to the extent of the amount paid to the liquidator.
(9) If a creditor has been preferred, and afterward in good faith grants additional credit to the insurer without security of any kind, in return for property which becomes part of the estate of the insurer, the amount of new credit which remains unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him/her.
(10) If an insurer, within one hundred and twenty (120) days before filing a successful petition for liquidation pursuant to this chapter or at any time, in contemplation of a proceeding for liquidation, directly or indirectly pays an amount of money or transfers property to an attorney-at-law for services rendered or to be rendered, the court may examine the transaction on its own motion or by petition of the liquidator and it shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefit of the estate. When the attorney holds a position of influence over the insurer or over an affiliate thereof, payment of any amount of money or the transfer to the attorney-at-law of any property for services rendered or to be rendered shall be governed by the provisions of subsection (1)(b)(4) of this section.
(11)
(a) Every officer, manager, employee, shareholder, member, subscriber, attorney in fact or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he/she has reasonable cause to believe the insurer is or is about to become insolvent, at the time of the preference, shall be personally liable to the liquidator for the amount of the preference. It shall be presumed that reasonable cause for such a belief existed if the transfer was made within a year before the date of filing of the successful petition for liquidation.
(b) Any person who receives property from the insurer or the benefit thereof, as a preference voidable under subsection (1) of this section, shall be personally liable therefor and shall be bound to account to the liquidator.
(c) Nothing provided in this section shall prejudice any other claim by the liquidator against any person.
History —Ins. Code, added as § 40.250 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 24.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4026/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4026 - Liquidation—Claims of holders of void or voidable rights
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4026 - Liquidation—Claims of holders of void or voidable rights
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(1) No claim of a creditor who has received or acquired a preference, lien, transfer, assignment or encumbrance which is voidable under this chapter shall be allowed, unless said creditor surrenders such a preference, lien, transfer, assignment or encumbrance. If the voidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed, unless the money is paid or the property returned to the liquidator within thirty (30) days [following] the date of entering the final judgment, except that the Receivership Court may grant additional time if there is an appeal or any other continuation of the proceeding.
(2) A claim allowable under subsection (1) of this section by reason of avoidance, be it voluntary or not, or a preference, lien, transfer, assignment or encumbrance may be filed as an excused late filing under § 4032 of this title if filed within thirty (30) days from the date of voidance or within the additional time granted by the court according to subsection (1) of this section.
History —Ins. Code, added as § 40.260 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 25.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4027/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4027 - Liquidation—Set-offs and counterclaims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4027 - Liquidation—Set-offs and counterclaims
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(1) Mutual debts or mutual credits between the insurer and another person in relation to any action or proceeding pursuant to this chapter shall be set-off and the balance shall only be allowed or paid as provided in subsection (2) of this section and § 4030 of this title.
(2) No setoff or counterclaim shall be allowed in favor of any person where:
(a) The obligation of the insurer to the person does not entitle the aforesaid to participate as a claimant of the insurer’s assets at the date of filing of the petition for liquidation;
(b) the obligation of the insurer to the other person was purchased by or transferred to the person so that it would be used as a set-off;
(c) the obligation of the insurer is owed to an affiliate or entity, and there is no written assignment of the obligation executed more than one hundred and twenty (120) days before the date on which the petition for liquidation is filed;
(d) the obligation of the person is owed to an affiliate or entity other than the insurer, and there is no written assignment of the obligation executed more than one hundred and twenty (120) days before the date on which the petition for liquidation is filed;
(e) the obligation of the person is to pay an assessment imposed on members or subscribers of the insurer, or to pay the balance on a subscription to the capital stock of the insurer, or the same is in any other way in the nature of a capital contribution, or
(f) the obligation of the person is to pay premiums to the insurer, whether earned or not.
History —Ins. Code, added as § 40.270 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 26.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4028/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4028 - Liquidation—Assessments
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4028 - Liquidation—Assessments
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(1) As soon as possible, but no later than two years after the date of an order of liquidation under § 4015 of this title of an insurer who issues assessable policies, the liquidator shall present a report to the court setting forth:
(a) The reasonable value of the assets of the insurer;
(b) the probable total liabilities of the insurer;
(c) the probable aggregate amount of the assessments required to pay all the claims of creditors in full, including expenses of administration and costs involved in collecting the assessment, and
(d) a recommendation as to whether or not an assessment should be levied and the amount thereof.
(2)
(a) Based on the report provided in subsection (1) of this section, including any supplements or amendments to the report, the Receivership Court may impose one or more assessments on the members of the insurer who are subject to assessment.
(b) Subject to any applicable legal limitation on assessability, the total assessment shall be for the amount by which the sum of the probable liabilities, the expenses of administration and the estimated cost of collection of the assessment pursuant to the order, exceeds the value of the existing assets, taking in due account the assessments that cannot be collected economically.
(3) After levy of assessment pursuant to subsection (2) of this section, the liquidator shall issue an order directing each member who has not paid the assessment to show cause why the liquidator should not pursue a judgment ordering the payment of the assessment.
(4) The liquidator shall give notice of the order to show cause by publication and by first-class mail to each affected member to his/hmyer last known address as it appears on the insurer’s records at least twenty (20) days before the date of return of the order to show cause, or by such other method of notification as the Receivership Court may authorize. Failure to receive the notice or the order within the time specified therein shall not be used as [a] defense in any proceeding to collect the assessment.
(5)
(a) If a member does not appear and serve duly verified objections to the liquidator on or before the day for responding to the order to show cause as provided in subsection (3) of this section, the court shall issue an order adjudging the member liable for the payment of the amount of the assessment against him/her according to subsection (3) of this section, including all costs, and the liquidator shall thus have a judgment against the member therefor.
(b) If, on or prior to the day for responding, the member appears and serves duly verified objections, the Commissioner may hear the case and issue a decision or appoint a referee to intervene and issue an order such as the facts warrant. If the Commissioner determines that the objections do not warrant that a member be relieved from assessment, the member may request the court to review the matter and annul the order to show cause.
(6) The liquidator may enforce any order or collect any judgment according to the provisions of subsection (5) of this section, by any lawful means.
History —Ins. Code, added as § 40.280 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 27.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4029/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4029 - Liquidation—Reinsurer; liability
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4029 - Liquidation—Reinsurer; liability
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(1) The amounts that are to be recovered by the liquidator from the reinsurers shall not be reduced as a result of the receivership proceedings, notwithstanding the fact that it be so provided in the reinsurance contract or in any other agreement, or that nothing was provided on the matter. A payment made directly by the reinsurer to an insured party or other creditor shall not diminish the obligation of the reinsurer with respect to the estate of the insurer. This section shall apply to all reinsurance contracts of the insurer, including but not limited to treaty reinsurance, quota share reinsurance, facultative reinsurance or a fronting or captive reinsurance arrangements.
(2) Except as otherwise provided in subsection (1) of this section, the amount recoverable by the liquidator from a reinsurer shall be paid by the reinsurer under one or more reinsurance contracts based on:
(a) Proof of payment of the insured claim by a guaranty association, the insurer, or the liquidator or rehabilitator, to the extent of the amount paid, or
(b) the allowance of the claim pursuant to § 4040 of this title, or according to a liquidation order or rehabilitation plan.
(3) If an insurer takes credit for a reinsurance contract in a filing or submission made to the Commissioner and the reinsurance contract does not contain the provisions required with respect to the obligations of reinsurers in the event of insolvency of the reinsured parties, said reinsurance contract shall be considered to contain the provisions required with respect to the obligations of reinsurers in the event of insolvency of the reinsured parties in order to be able to obtain credit for reinsurance, or other applicable statutes.
(4) Any reinsurance contract that under subsection (3) of this section is presumed or inferred to contain certain provisions, shall be considered to contain the following provision:
“In the event of insolvency and the appointment of a liquidator or rehabilitator, the reinsurer’s obligation shall be payable to the ceding insurer or to the liquidator or rehabilitator without any diminution whatsoever due to insolvency or failure of the liquidator or rehabilitator to pay all or a portion of the claim. Payment shall be made upon either:
(a) Proof of payment of the claim by the guaranty association, the insurer, or the liquidator or rehabilitator up to the sum paid, or
(b) allowance of the claim under § 4040 of this title or according to a rehabilitation plan or liquidation order.”
(5) The liquidator or rehabilitator, in accordance with the terms of the contract, shall give written notice to each reinsurer obligated in relation to each pending claim against the reinsured party. The liquidator or rehabilitator’s failure to give notice of pending claims pursuant to the provisions of the reinsurance contract, shall not excuse the obligation of the reinsurer under the contract, unless the reinsurer is prejudiced by the receiver’s failure, in which case, the reinsurer’s obligations shall be reduced only to the extent of the prejudice. A reinsurer may assert, at its own expense, in a proceeding in which a claim is to be adjudicated, any defense or defenses available to the reinsured party, liquidator or rehabilitator.
(6) The entry of a rehabilitation or liquidation order shall not be construed as a breach or an anticipatory breach of a reinsurance contract, nor shall the same be grounds for retroactive revocation or cancellation of any reinsurance contract by the reinsurer.
(7) In the event that a reinsurer’s payment to a rehabilitator or liquidator of a ceding insurer is later determined to be a payment in excess of the amounts owed to the insurer, said excess shall be credited against future payments owed to the liquidator or rehabilitator, or shall be repaid to the reinsurer as an administrative expense pursuant to § 4039 of this title. Any repayment shall be limited to the remainder of the estate.
History —Ins. Code, added as § 40.290 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 28.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4029a/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4029a - Liquidation—Life and health reinsurance
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4029a - Liquidation—Life and health reinsurance
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(1) A contract reinsuring a life, physical disability or long-term care insurance policy or annuities issued by a ceding insurer subject to a rehabilitation proceeding under this chapter shall be continued or terminated pursuant to their terms and conditions as well as to the provisions of this subsection.
(2) A contract reinsuring a life, physical disability or long-term care insurance policy or an annuity issued by a ceding insurer subject to a liquidation proceeding pursuant to this chapter shall remain in effect, subject to the provisions of this chapter, unless said contracts have been terminated pursuant to their terms prior to the date of the liquidation order or to the date on which said contracts have been terminated pursuant to the liquidation order, in which case, the provisions of the subsection (1) of this section should apply.
(3)
(a) At any time within one hundred and eighty (180) days from the date of the liquidation order, any guaranty association covering in whole or in part a life insurance policy, physical disability insurance policy, long-term care insurance policy or an annuity, may elect to assume the rights and obligations of the ceding insurer that relate to the policy or annuity covered in whole or in part by the guaranty association, in each case, under one or more reinsurance contracts between the insolvent insurer and its reinsurers, as determined by the guarantee association. Said assumption shall be effective as of the coverage date. The election shall be made by the guaranty association or by the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) [on] its behalf by sending written notice, return receipt requested, to the affected reinsurers.
(b) To facilitate the earliest decision possible about whether to assume any of the reinsurance contracts and in order to protect the financial position of the estate, the liquidator and each reinsurer of the ceding insurer shall make available, at the request of the affected guaranty associations or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) in representation of the same, as soon as possible after commencement of receivership proceedings, copies of the reinsurance contracts in force as well as of all records related thereto and other documents relevant to the determination of whether said contracts should be assumed and notice of any default under the reinsurance contracts or any known event or condition that with the passing of time could become a default reinsurance contract.
(c) The following paragraphs shall apply to those reinsurance contracts assumed by any guarantee association:
(i) The guaranty association shall be responsible for all unpaid premiums due under reinsurance contracts, for the periods both before and after the liquidation order, and shall be responsible for complying with any other obligations after the date of the liquidation order in every case related to life insurance policies, physical disability insurance policies, long-term care insurance policies or annuities covered in whole or in part by guarantee associations. Any costs for reinsurance in excess of the obligation of the guaranty association in policies or annuities, on account of these being covered in part by a guarantee association, may be charged by the guarantee association through reasonable allocation methods. The guarantee association shall provide notice and justify said charges to the liquidator.
(ii) The guaranty association shall be entitled to any amounts payable by the reinsurer under reinsurance contracts with respect to losses or events that occur in a period subsequent to the date of the liquidation order and related to life insurance policies, physical disability insurance policies, long-term care insurance policy or annuities covered in whole or in part by the association; Provided, That upon receipt of said amounts, the guaranty association shall be obliged to pay to the beneficiary under the policy or annuity against which the amounts were paid, a portion of said amount equal to the lesser of:
(A) The amount received by the guaranty association, and
(B) the excess of the amount received by the guaranty association over the amount equal to the benefits paid by the guaranty association on account of the policy or annuity, subtracting the retention of the insurer applicable to the loss or event.
(iii) Within thirty (30) days following the election of the guarantee association, the guaranty association and each reinsurer under contracts assumed by the guaranty association shall compute the net balance to be paid by the guaranty association or which the guaranty association is to pay under each reinsurance contract as of the date of the election and with respect to policies or annuities covered, in whole or in part, by the guaranty association. Such computation shall give full credit to all payments made by the insurer or the liquidator or the reinsurer before the date of the election. The reinsurer shall pay the liquidator any amounts payable for claims or events before the date of coverage, subject to any setoff for premiums unpaid for periods before the date of coverage, and the guaranty association or reinsurer shall pay any pending balance due to the other party within five (5) days of the completion of said computation. Any dispute over amounts payable to either party shall be resolved by arbitration pursuant to the terms of the applicable reinsurance contract, or if the contract contains no arbitration clause, as provided in subsection (9)(d) of this section. If the liquidator has received any amounts due to the guaranty association pursuant to paragraph (ii) of this clause, the liquidator shall remit the same to the guaranty association as promptly as practicable.
(iv) If the association or the liquidator, on behalf of the guaranty association, within sixty (60) days of the date of the election, pays the premiums due for periods both before and after the date of the election that relate to life insurance policies, physical disability insurance policies, long-term care insurance policies or annuities covered, in whole or in part, by the guaranty association, the reinsurer shall not be entitled to terminate the reinsurance contracts for failure to pay premiums, insofar as the reinsurance contracts relate to life insurance policies, physical disability insurance policies, long-term care insurance policies or annuities covered, in whole or in part, by the guaranty association, and shall not be entitled to any setoff on any unpaid amounts under other contracts or unpaid amounts due from parties other than the guaranty association, against amounts due the guaranty association.
(4) If pursuant to Receivership Court approval under § 4016 of this title, the liquidator continues certain life insurance policies, physical disability insurance policies, long-term care insurance policies or annuities in force after a liquidation order has been issued, and said policies or annuities are not covered in whole or in part by one or more guaranty associations, the liquidator may, within one hundred and eighty (180) days following the date of coverage, elect to assume the rights and obligations of the ceding insurer under one or more of the reinsurance contracts that relate to the policies or annuities, provided the contracts have not been terminated as set forth in subsection (2) of this section. The election shall be made by sending written notice, return receipt requested, to the affected reinsurers. In such a case, payment of premiums on the reinsurance contracts for the policies or annuities, for periods both before and after the date of coverage, shall be chargeable against the estate as Class 1 administrative expenses. The amounts paid by the reinsurer on account of losses on the policies and annuities shall be paid to the estate of the insolvent insurer.
(5) During the period beginning on the date of coverage and ending on the date of the election:
(a)
(i) Neither the guaranty association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the guaranty association has the right to assume under subsection (3) of this section, whether for a period before or after the date of coverage;
(ii) neither the liquidator nor the reinsurer shall have any rights or obligations under reinsurance contracts that the liquidator has the right to assume under subsection (4) of this section with respect to the period after the date of coverage, but their respective rights and obligations for the period preceding the date of coverage shall remain unchanged, and
(iii) the reinsurer, the liquidator, and the guaranty association shall, to the extent practicable, provide each other with information and records reasonably requested.
(b) Once the guaranty association or the liquidator, as the case may be, elects or declines to elect to assume a reinsurance contract, the parties’ rights and obligations shall be governed by subsection (3), (4) or (9) of this section, as applicable.
(6)
(a) If a guaranty association does not elect to assume a reinsurance contract by the date of the election as provided under subsection (3) of this section, the guaranty association shall have no rights or obligations, in each case for periods both before and after the date of coverage, with respect to the reinsurance contract.
(b) If the liquidator does not elect to assume a reinsurance contract by the date of the election pursuant to subsection (4) of this section, the liquidator and the reinsurer shall retain their respective rights and obligations with respect to the reinsurance contract for the period preceding the date of coverage, but shall have no rights or obligations to each other for the period after the date of coverage, except as provided in subsection (9) of this section.
(c) In the event that the guaranty association or the liquidator, as the case may be, does not elect to assume a reinsurance contract by the date of the election, the reinsurance contract shall terminate retroactively, effective on the date of coverage. Reinsurance contracts covering life insurance policies, physical disability insurance policies, long-term care insurance policies or annuities that are terminated pursuant to § 4016 of this title, shall terminate on the date of coverage. In both cases, subsection (9) of this section shall apply.
(7) When life insurance policies, physical disability insurance policies, long-term care insurance policies, annuities, or guaranty association obligations with respect to them are transferred to an assuming insurer, reinsurance on the policies or annuities may also be transferred by the guaranty association, in the case of contracts assumed under subsection (3) of this section, or by the liquidator, in the case of contracts assumed under subsection (4) of this section, as the case may be, but subject to the following:
(a) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new insurance policy or annuity in addition to those transferred;
(b) the obligations described in subsections (3) and (4) of this section shall not apply with respect to matters arising after the effective date of the transfer, and
(c) notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than thirty (30) days before the effective date of the transfer.
(8) The provisions of this section shall supersede the provisions of any law or of any affected insurance contract that provides for or requires any payment of reinsurance proceeds on account of losses or events that occur in a period after the date of coverage, to the liquidator or to any other person. The liquidator shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in a period before the date of coverage, subject to the provisions of this chapter, including applicable setoff provisions.
(9) If a contract reinsuring a life insurance policy, physical disability insurance policy, long-term care insurance policy, or an annuity is terminated pursuant to this chapter, the following provisions shall apply:
(a) The reinsurer and the liquidator shall, upon being notified in writing by the other party to the reinsurance contract, not later than thirty (30) days after the receipt by the reinsurer of notice of termination, commence a mandatory negotiation or an arbitration proceeding in accordance with this subsection.
(b) Each party shall appoint an actuary to determine an estimated sum payable as a result of the termination of the reinsurance contract, computed in a way expected to render the parties financially indifferent as to whether the contract is continued or terminated, giving due regard to the financial effects of insolvency. Said sum shall take into account the present value of future cash flows expected under the reinsurance contract and shall be based on a gross premium valuation of net liability using current assumptions that reflect post-liquidation experience expectations, without taking into account additional margins and net margins of any amounts payable and receivable, and with a market value adjustment to reflect premature sale of assets to fund the settlement.
(c) Within ninety (90) days from the date on which the written request pursuant to clause (a) of this subsection is made, each party shall provide the other party with its estimate of the sum due as a result of the termination of the reinsurance contract and all relevant documents and any other information supporting the estimate. The parties shall make a good faith effort to reach an agreement on the sum due.
(d) If the parties are unable to reach an agreement within ninety (90) days following the date on which the documents required in clause (c) of this subsection are submitted, either party may initiate arbitration proceedings as provided in the reinsurance contract. In the event that the reinsurance contract does not contain an arbitration clause, either party may commence the arbitration proceeding pursuant to this subsection by providing the other party with a written demand for arbitration. Said arbitration shall be conducted pursuant to the following procedures:
(i) The venue for the arbitration proceeding shall be that which is agreed to by the parties.
(ii) Thirty (30) days from the date either party receives the arbitration demand, each party shall appoint an impartial arbitrator who is a disinterested active officer or executive or a retired officer of a life insurance or reinsurance company, or other professional with not less than ten (10) years of experience in or relating to the field of life insurance or reinsurance. The two arbitrators, in turn, shall appoint an independent, impartial umpire who is an active or retired officer or executive of a life insurance or reinsurance company or other professional with not less than ten (10) years of experience in the field of life insurance or reinsurance. If the arbitrators are unable to agree on an umpire, each arbitrator shall provide the other with the names of three (3) qualified individuals. Each arbitrator shall strike two names from the three submitted by the other arbitrator and the umpire shall be randomly chosen from the two remaining candidates.
(iii) Except as otherwise ordered by the arbitration panel and within sixty (60) days following the date on which the umpire is appointed, the parties shall submit to the panel their estimates of the sum due as a result of the termination of the reinsurance contract, together with all relevant documents and other information supporting each estimate.
(iv) The terms set forth herein may be extended upon mutual agreement of the parties.
(v) The panel shall have all powers necessary to conduct the arbitration proceedings in a fair and appropriate manner, including the power to request additional information from the parties, to authorize discovery, to hold hearings and to hear testimony. Furthermore, the panel may, if the same considers it convenient, appoint independent actuaries, the expense of which shall be shared equally between the parties.
(e) An arbitration panel considering the matters set forth in this clause shall apply the standards set forth in clause (b) of this subsection and shall issue a written award specifying a net settlement amount due from one party or the other as a result of the termination of the reinsurance contract. The Receivership Court shall confirm the award in the absence of proof of statutory grounds for modifying or repealing the award as established by the Federal Arbitration Act.
(f) If the net settlement amount agreed upon or awarded pursuant to this clause should be payable by the reinsurer, the latter shall pay the amount due to the estate, but subject to any applicable setoff under § 4027 of this title. If the net settlement amount agreed upon or awarded pursuant to this clause is payable by the insurer, the reinsurer shall be considered to have a timely filed claim for that amount, which claim shall be paid pursuant to the priority established in § 4039(4) of this title. The guaranty association shall not be entitled to receive the net settlement amount, except to the extent it is entitled to share in the estate assets as creditors thereof, and shall have no responsibility for the amount agreed upon.
(10) Except as otherwise provided in this section, none of the provisions herein shall alter or modify the terms and conditions of any reinsurance contract nor shall abrogate or abridge any rights of a reinsurer to rescind a reinsurance contract. Nothing in this section shall give any policyholder or beneficiary an independent cause of action against the reinsurer that is not otherwise set forth in the reinsurance contract. None of the provisions herein shall either abridge or affect the rights of any guaranty association as a creditor of the estate against the assets of the estate. None of these provisions shall apply to reinsurance agreements covering property or casualty risks.
History —Ins. Code, added as § 40.291 on Dec. 14, 2007, No. 206, § 29.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4030/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4030 - Liquidation—Recovery of premiums owed
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4030 - Liquidation—Recovery of premiums owed
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(1)
(a) Every general agent, authorized representative, producer, proxy, premium financing company or any other person other than the insured party responsible for the payment of a premium, shall be obligated to pay to the liquidator any amount due to the insurer on account of the portion of the premiums earned at the time of the liquidation declaration, as shown on the records of the insurer. Regarding any part of the unearned premium that has been collected, the general agent, authorized representative, producer or proxy shall be governed by the provisions of § 952h of this title. Neither credits, nor setoffs, or both, shall be allowed to a general agent, authorized representative, producer, proxy or premium financing company for any amounts that the general agent, authorized representative, producer, proxy or premium financing company has advanced to the insurer on behalf of, but in the absence of payment by, the insured party.
(b) The general agent, authorized representative, producer or proxy shall be obligated to return to the liquidator the unearned commissions of the premiums remitted to the insurer.
(c) An insured shall be bound to pay any unpaid earned premiums due the insurer at the time of the declaration of liquidation, as shown on the records of the insurer.
(2) Upon satisfactory evidence of a violation of the provisions of this section, the Commissioner may pursue either one or both of the following courses of action:
(a) Suspend or revoke, or refuse to renew the licenses of such infringer or infringers.
(b) Impose an administrative penalty of not more than one thousand dollars ($1,000) for each violation of this section by said party or parties. For the purpose of the imposition of this fine, the placement or issuance of each insurance policy shall be considered as a separate violation.
History —Ins. Code, added as § 40.300 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 30.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4031/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4031 - Liquidation—Distribution of assets, proposal
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4031 - Liquidation—Distribution of assets, proposal
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(1) Within one hundred and twenty days of a final determination of insolvency of an insurer by the Receivership Court, the liquidator shall petition the court to approve a proposal to disburse assets, from time to time, out of marshalled accrued assets as they become available, to a guaranty association or a foreign guaranty association having obligations because of such insolvency. The liquidator shall have the right to petition the Receivership Court for an extension of up to one hundred and twenty (120) days to make this petition. If at that time, the liquidator determines that there are not sufficient assets to disburse, the petition required by this section shall be deemed to be satisfied in full if the liquidator files a motion stating the reasons for such a determination.
(2) The proposal shall at least include provisions for:
(a) The establishment of reserves for the payment of administrative expenses and the payment of claims of secured creditors, up to the amount of the value of the security, and of claims included in the priorities established in § 4039 of this title, Classes 1 and 2;
(b) the disbursement of assets marshalled to said date and the subsequent disbursement of assets as they become available;
(c) the equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto;
(d) the obtainment by the liquidator of an agreement with each of the associations entitled to disbursements, pursuant to this section, to the effect that such assets shall be returned to the liquidator, together with the proceeds earned by virtue of the provisions of § 4033 of this title, the assets previously disbursed, as required to pay claims of secured creditors, and those claims that fall within the priorities established in § 4039 of this title, in accordance with such priorities. No bond whatsoever shall be required from any of the aforesaid associations for this purpose; and
(e) a full report from each association to the liquidator accounting for all assets so disbursed to the Association, all disbursements made from said assets, any proceeds earned by the association on said assets and any other matter which the court may require.
(3) The liquidator’s proposal shall provide for the disbursement of assets to the associations in amounts estimated at least equal to the claim payments made or to be made, for which the associations could assert a claim against the liquidator, and shall furthermore provide that if the assets available for disbursement from time to time do not equal or exceed the total amount of such claim payments made or to be made by the association, then the disbursements shall be in the amount of the available assets.
(4) The proposal of the liquidator shall provide, with respect to an insolvent insurer underwriting life or disability insurance, for the disbursement of assets to any guaranty association or foreign guaranty association in the field of life or disability insurance or annuities, or to any other organization or entity which reinsures, assumes or secures insurance policies or contracts pursuant to the laws that create such associations.
(5) Notice of such a petition shall be given to the association and to the Commissioner of Insurance of each state. It shall be deemed that notice has been given when it has been sent by first class postage prepaid certified mail, at least thirty (30) days prior to submitting the application to the court. The court may take action concerning the petition provided the aforementioned required notice has been given and, furthermore, if the liquidator’s proposal meets the requirements of clauses (a) and (b) of subsection (2).
History —Ins. Code, added as § 40.310 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 31.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4032/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4032 - Liquidation—Filing of claims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4032 - Liquidation—Filing of claims
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(1) The liquidator shall be given proof of every claim, in the form required by § 4033 of this title on or before the last day for filing specified in the notice required pursuant to § 4019 of this title, except that it shall not be necessary to present proof of claims for cash surrender values or other investment values in life insurance and annuities unless the liquidator expressly so requires.
(2) The liquidator may permit a claimant making a late claim to share in the distributions, whether past or future, as if the claim were not late, to the extent that the payment does not prejudice the orderly administration of the liquidation, under the following circumstances:
(a) The existence of the claim was not known to the claimant and he/she filed the same ninety (90) days after learning about it;
(b) A transfer to a creditor was voided pursuant to §§ 4023 and 4025 of this title, or was voluntarily surrendered pursuant to § 4026 of this title and the filing of the claim meets the provisions of § 4026 of this title.
(c) The valuation, pursuant to § 4038 of this title, of the security held by a secured creditor shows a deficiency which is claimed within thirty (30) days after the valuation.
(3) The liquidator shall permit late claims to share in the distributions, whether past or future, as if they were not late, if they are claims of a guaranty association or a foreign guaranty association for the reimbursement of paid covered claims, or for expenses incurred, or both, subsequent to the last day for filing and if the payments were made and the expenses incurred as provided by law.
(4) The liquidator may consider any claim filed late, which is not covered by subsection (2) of this section, and may permit it to receive distributions which were subsequently declared for claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The claimant who files a claim belatedly shall receive at each distribution the same percentage of the amount allowed on his/her claim which is then being paid to claimants with a lower priority. The procedure shall so continue until his/her claim has been paid in full.
History —Ins. Code, added as § 40.320 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 32.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4033/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4033 - Liquidation—Claims form
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4033 - Liquidation—Claims form
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(1) The claims form shall consist of a statement sworn to and signed by the claimant which includes all of the following when applicable:
(a) The particulars of the claim, including the consideration given for it;
(b) identification and amount of the security involved in the claim;
(c) payments made on the debt, if any;
(d) that the sum claimed is legitimately owed and that there is no set-off, counterclaim, or defense to the claim;
(e) any right of priority of payment or other specific rights alleged by the claimant;
(f) a copy of the written instrument on which the claim is founded, and
(g) name and address of the claimant and his/her legal representative, if any.
(2) No claim shall be considered or allowed if it does not contain all applicable information stipulated in subsection (1) of this section. The liquidator may require that a form prescribed by him/her be used and that other information and documentation be included.
(3) The liquidator may require at any time that the claimant submit information or evidence supplementary to that which is required by subsection (1) of this section and may take testimony under oath or pledge, require the production of statements, or otherwise obtain additional information or evidence.
(4) No judgment or order against the insured or the insurer entered after the filing of a successful petition for liquidation, nor any judgment or order against the insured or the insurer entered at any time by default or collusion, will have to be considered as evidence of liability or of quantum of damages. No judgment or order against the insured or the insurer issued within four months prior to the filing of the petition will have to be considered as evidence of liability or of the quantum of damages.
(5) All claims of a guaranty association or a foreign guaranty association shall be in such form and shall contain the proof agreed upon by the association and the liquidator.
History —Ins. Code, added as § 40.330 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 33.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4034/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4034 - Liquidation—Special claims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4034 - Liquidation—Special claims
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(1) The claim of a third party claimant which is contingent only on his/her first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
(2) A claim may be allowed, even if contingent, if it is filed in accordance with § 4032 of this title. It may be allowed and may participate in all the distributions declared after the filing, to the extent that it does not prejudice the orderly administration of the liquidation.
(3) Claims which are not payable because their due date has not expired, shall be treated as payable claims, except that their future value may be discounted at the legal rate of interest.
(4) The claims of directors, principal officers or other persons performing similar functions or with similar authority pursuant to employment contracts, are limited to payment for services rendered before the issuance of any order of rehabilitation or liquidation pursuant to the provisions of §§ 4010 and 4015 of this title.
History —Ins. Code, added as § 40.340 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 34.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4035/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4035 - Liquidation—Third party claimants
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4035 - Liquidation—Third party claimants
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(1) When a third party claimant asserts a cause of action against an insured party of an insurer in liquidation, the third party claimant may file a claim with the liquidator.
(2) The insured may present a claim in favor of the third party claimant regardless of whether the aforesaid files the claim or not. If the insured fails to file a claim by the date stipulated in the liquidation order for the filing of claims, or within sixty (60) days after the notice required by § 4019 of this title has been issued, whichever is later, the aforementioned shall be an unexcused late claimant.
(3) The liquidator shall make his/her recommendations to the Receivership Court, pursuant to § 4039 of this title, to allow the acceptance of a claim of an insured pursuant to subsection (2) of this section, taking into consideration the probable outcome of any action pending against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses in the defense. After the court has given its consent, the liquidator shall withhold any dividends payable on the claim pending the outcome of the litigation or negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and shall amend his/her recommendations to the court. The insured shall be granted the same notice and the same opportunity to be heard in all changes in the recommendation, as in the initial determination. The court may amend its allowance as it may deem appropriate. As claims against the insured are settled or denied, the aforesaid shall be paid from the amount withheld the same percentage of the dividends as was paid in other similar claims, based on the lesser of the amount in fact recovered from the insured by the action or paid by agreement plus the reasonable costs and expenses of the defense, or the amount allowed on the claims by the court. After all the claims have been settled or denied, any remainder of the amount withheld shall revert to the undistributed assets of the insurer. A delay in the final payment pursuant to this paragraph shall not be a cause for unreasonable delay of final distribution and payment on the part of the liquidator.
(4) If several claims are filed on the basis of one policy, whether by third party claimants or as claims of an insured according to this section, and the aggregate amount granted in the claims to which an equal limit of liability in the policy is applicable, exceeds that limit, each claim granted shall be reduced in the same proportion, so that the total shall equal the limit of the policy. The claims by the insured shall be valued according to the provisions of subsection (3) of this section. If the claim of any insured party is subsequently reduced as indicated in subsection (3) of this section, the amount thus freed shall be apportioned ratably among the claims which have been reduced pursuant to this subsection.
(5) No claim shall be filed under this section if it is, or can be, covered by any guaranty association of foreign guaranty association.
(6) A claimant may withdraw a claim with the approval of the liquidator. The liquidator may approve the withdrawal of the claim after giving notice to the insured party and only upon showing just cause.
(7) The filing of a claims form in connection with a claim against an insured party shall have the following effect on the rights of the claimant and the insured party:
(a) The claimant waives any right to claim the assets of the insured party to the extent of the coverage or policy limits provided by the insurer and agrees that, to the extent of said coverage or limit, his/her claim against the insured party shall be satisfied solely from distributions paid by the liquidator on the claim and any payment that the guaranty association may pay on account of the claim, except as provided in this section.
(b) The waiver provided for in this section is conditioned upon the cooperation of the insured party with the liquidator or with any guaranty association in defense of the claim. This waiver shall not discharge the guaranty association from any of its responsibilities and duties or the insured party with respect to any claim in excess of the coverage or limits of the policy issued by the insurer or any other responsible party.
(c) The waiver provided for under this section is void if:
(i) A claimant withdraws the claims form under subsection (6) of this section, or
(ii) the liquidator denies a claim, because there is no coverage.
History —Ins. Code, added as § 40.350 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 35.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4036/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4036 - Liquidation—Evaluation of claims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4036 - Liquidation—Evaluation of claims
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(1) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or his/her representative by first-class mail at the address shown [on] the claims form. Within thirty (30) days after the notice has been mailed, the claimant may file his/her objections with the liquidator. If no such filing is made, the claimant may not further object to the determination.
(2) Regarding the determination of the liquidator, the claimant may resort to the Receivership Court for a review.
(3) The provisions of this section shall not apply to disputes with respect to determinations of coverage by a guaranty association as part of its statutory obligations.
History —Ins. Code, added as § 40.360 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 36.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4037/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4037 - Liquidation—Claims of surety
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4037 - Liquidation—Claims of surety
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Whenever a creditor whose claim is secured, in whole or in part, by the undertaking of another person, fails to prove and file the claim, the other person may do so in the creditor’s name and shall be subrogated to the rights of the creditor, when the claim has been filed by the creditor or by the other party in the creditor’s name, to the extent that he/she has discharged his/her undertaking. In the absence of an agreement to the contrary with the creditor, the other person shall not be entitled to any distribution whatsoever until the amount paid to the creditor, in the undertaking plus the distributions paid on the claim to the creditor from the insurer’s estate, equal the amount of the creditor’s total claim. Any amount received in excess by the creditor shall be held by him/her in trust for such other person. It shall not be understood that the term “other person” as used in this section applies to a guaranty association or a foreign guaranty association.
History —Ins. Code, added as § 40.370 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4038/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4038 - Liquidation—Secured creditor’s claims
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4038 - Liquidation—Secured creditor’s claims
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(1) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
(a) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors, or
(b) by agreement, arbitration, settlement or litigation between the creditor and liquidator.
(2) The determination shall be made under the supervision and control of the court with due regard for the recommendations of the liquidator. The amount so determined shall be credited upon the secured claim and any deficiency shall be treated as an unsecured claim. Were the claimant to surrender his security to the liquidator the entire claim shall be deemed as unsecured.
(3)
(a) A surety has paid any losses and adjustment expenses under a surety bond contract before any petition for liquidation and the principal posts collaterals to the surety that have not been used to reimburse said losses and adjustment expenses and at the time of the petition said collaterals have not been credited against the payments made, the liquidator shall have first priority over any other person to use collateral to reimburse losses and adjustment expenses incurred by a surety before the petition for liquidation.
(b) If the principal under a surety bond or contract pledges any collateral to secure his/her obligation of reimbursing to the insurer any claim of a creditor under the surety bond or contract, such a claim shall be satisfied first out of the collateral or the collateral’s proceeds.
(c) When paying a claim to a creditor under a bond or surety contract secured by collateral, the liquidator shall retain a sufficient sum to pay for any other potential claim against the collateral.
(d) If the collateral is insufficient to pay in full all possible claims under clause (b) of this subsection, the claims shall be paid on a pro rata basis and creditors shall have a claim for any deficiency, subject to the provisions of § 4032 of this title.
(e) If the term to file a claim against a bond or surety has expired and all claims have been satisfied in full, the remaining collateral shall be returned to the principal.
[(4)] The liquidator may recover from any property securing a covered claim, the reasonable, necessary costs and expenses of preserving, or disposing of, said property, up to the total sum of the claim.
History —Ins. Code, added as § 40.380 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 37.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4039/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4039 - Liquidation—Distribution, priority
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4039 - Liquidation—Distribution, priority
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The priority in the distribution of claims from the insurer’s estate shall be in accordance with the order in which each class of claims is set forth in this section. All claims in each class shall be paid in full or sufficient funds shall be retained for such payment before the members of the next class receive any payment. No subclauses shall be established within any class. The distribution order of the claims shall be:
(1) Class 1.— The administrative costs and reasonable expenses of the settler of a guaranty association or a foreign guarantee association in the handling of claims.
(2) Class 2.— Due debts with employees for services rendered up to a maximum of one thousand dollars ($1,000) and which represent payment for services rendered within one year prior to the filing of the petition for settlement. Officers and directors shall not be entitled to the benefit of this priority. This priority shall be in lieu of any other similar priority that any other law may grant with respect to salaries or compensation of employees.
(3) Class 3.— All claims for losses incurred and covered by policies, including third party claims, all claims against the insurer for liability for body injuries or damage, or destruction of tangible property, which are not covered by policies and all claims of a guaranty association or a foreign guaranty association.
(4) Class 4.— Claims for unearned premiums or other premiums refunds under non-assessable policies and the claims of general creditors.
(5) Class 5.— Claims of the federal government, or of any Commonwealth or local government body. Claims, including those of a government body for penalties or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained as a result of the act, transaction or proceeding costs resulting thereby. The remainder of such claims shall be passed on to the class describe[d] in Class 8.
(6) Class 6.— Claims filed late and claims of any other class that are not described in Classes 7 and 8.
(7) Class 7.— Surplus notes or loans without the guarantee of assets or apportionments, or any other similar obligations and premiums refunds on policies subjects to assessment. Payments to members of domestic mutual insurance companies shall be limited in accordance with this title.
(8) Class 8.— Claims of shareholders or other owners.
All claims included under separate account, which provides, in effect, that the assets of said separate account shall not be subject to the obligations that arise from any other business that the insurer may carry out, shall only be paid from the assets of the separate account. If the claims cannot be fully satisfied as provided above, the surplus of said claim shall be deemed as a Class 3 claim to the extent in which the corresponding reserve have been established in the general account of the insurer pursuant to this chapter. If the assets deposited in the separate account or accounts exceed obligations that arise from the separate account agreements, said excess shall be transferred to the insurer’s estate.
For purposes of this section, “separate accounts agreement or agreements” means any separate accounts agreement or agreements referred to in § 1328a of this title.
History —Ins. Code, added as § 40.390 on Aug. 17, 1991, No. 72, § 1; Dec. 19, 2003, No. 310, § [4]
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4040/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4040 - Liquidation—Recommendations to the court
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4040 - Liquidation—Recommendations to the court
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(1) The liquidator shall review all claims duly filed in the liquidation and shall make such further investigations as deemed necessary. He/she may adjust, settle or otherwise negotiate the amounts for which claims shall be recommended to the court except when the liquidator is required by law to accept claims as settled by any other person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be treated as provided in § 4036 of this title. As soon as possible the court shall be presented with a report of the claims filed with recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment values and the amounts owed.
(2) The court may approve, reject or modify the report on claims presented by the liquidator. The liquidator shall regard as allowed claims those claims included in the report which are not modified by the court within a period of sixty (60) days after being filed, subject to subsequent modifications by the court in accordance with § 4036 of this title. No claim under an insurance policy shall be allowed for an amount in excess of the applicable policy limits.
History —Ins. Code, added as § 40.400 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4041/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4041 - Liquidation—Distribution of assets
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4041 - Liquidation—Distribution of assets
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Under the supervision of the Receivership Court, the liquidator shall pay the distributions in such a way that they will ensure the proper acknowledgement of priorities and create a reasonable balance between the prompt completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. All claims approved within the same class shall be paid at the same percent.
History —Ins. Code, added as § 40.410 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 38.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4042/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4042 - Liquidation—Unclaimed and withheld funds
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4042 - Liquidation—Unclaimed and withheld funds
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(1) Unclaimed funds subject to distribution remaining in possession of the liquidator after the final distribution, shall be deposited in an unclaimed fund account under the custody of the Commissioner. If the person entitled to said funds presents satisfactory proof of ownership of said right within two years after the liquidation, the Commissioner shall remit the funds to him/her. The interest earned on unclaimed funds may be used to pay administrative expenses related to the handling of the return of said funds.
(2) The Commissioner may file a motion requesting that the Receivership Court issue an order to dispose of the withheld funds that remain unclaimed after two years, as set forth in subsection (1) of this section. Any costs incurred in carrying out said disposal shall be paid from the unclaimed funds. The motion shall specify the name of the insurer, the names and last known addresses of the persons entitled to the unclaimed funds, if known, and the amount of the funds. Notice of said motion shall be given as provided by the court. Upon a finding by the court that the funds have not been claimed within two years after the liquidation proceeding has been completed, the court shall rule that any claim for unclaimed funds and any interest earned thereon have been abandoned, and shall provide for the distribution of the funds under any of the following methods:
(a) To be deposited in the general liquidation expense account as provided by subsection (3) of this section;
(b) to be transferred to the Secretary of the Treasury, or
(c) to be used to reopen the liquidation proceeding and conduct a new distribution among the known claimants as provided in § 4043a of this title.
(3) The Commissioner may open a bank account to deposit the unclaimed funds and use said funds:
(a) To pay general expenses related to the administration of liquidations, and
(b) to advance funds to any other liquidation that does not have sufficient funds to pay for its operating expenses.
(4) Any advance to an insurer in liquidation, as allowed under subsection (3)(b) of this section, may be deemed to be a Class 1 claim within the distribution order established in § 4039 of this title.
[(5)] If the Commissioner determines that the funds in the account exceed the amount needed for the purposes specified in subsection (3) of this section, the Commissioner may transfer said funds to the Secretary of the Treasury, chargeable to the General Fund.
History —Ins. Code, added as § 40.420 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 39.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4042a/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4042a - Liquidation—Conditions for release from receivership proceedings
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4042a - Liquidation—Conditions for release from receivership proceedings
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Unless otherwise provided in a plan approved by a guaranty association, until all payments on account of the insurer’s contractual obligations are repaid to the guaranty associations, plus expenses and interest incurred by the same, the insurer that is subject to a receivership proceeding may not:
(1) Solicit or accept new business or accept the restoration of any suspended or revoked license.
(2) Have its control of shareholders or private management restored.
(3) Have any of its assets returned to its shareholders or administrators.
History —Ins. Code, added as § 40.421 on Dec. 14, 2007, No. 206, § 40.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4043/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4043 - Liquidation—Termination of proceedings
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4043 - Liquidation—Termination of proceedings
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(1) The liquidator shall petition the court for discharge of the liquidation once all the assets that justify collection and distribution expenses have been collected and distributed pursuant to this chapter. The court may grant the discharge and issue any other orders, including an order for the transfer of any remaining funds, whose high cost of distribution renders their distribution uneconomic, to where it may deem appropriate.
(2) Any other person may petition to the court at any time for an order in accordance with subsection (1) of this section. If the petition is denied, the person shall pay the costs and expenses incurred by the liquidator to oppose the petition.
History —Ins. Code, added as § 40.430 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4043a/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4043a - Liquidation—Reopening
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4043a - Liquidation—Reopening
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After liquidation proceedings are completed and the Receivership Court grants the discharge of the liquidation, the Commissioner may petition the Receivership Court to reopen the liquidation proceedings for just cause, including for the fact that additional property belonging to said estate has been discovered. If the court deems that there is justification for reopening the liquidation proceedings, it shall issue an order to such effects.
History —Ins. Code, added as § 40.431 on Dec. 14, 2007, No. 206, § 41.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4044/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4044 - Liquidation—Disposition of records during and after
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4044 - Liquidation—Disposition of records during and after
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(1) When the Commissioner, acting as liquidator of an insolvent insurer, deems that the records, documents and books of an insurer undergoing the process of liquidation or finally liquidated, are of no use whatsoever, he/she may recommend to the court and the court shall determine which records, documents and books shall be retained for future use and which shall be destroyed.
(2) If the liquidator determines that certain documents, records, and books of the insurer under a liquidation proceeding should be maintained after the closing of the liquidation, an amount of the estate of the insurer shall be reserved for the maintenance thereof. The amount reserved shall be deemed to be an administrative expense of the estate. The records, documents, and books retained pursuant to this section shall be transferred to the Commissioner, who shall retain and dispose of the same at his/her discretion. These records, documents, and books shall not be deemed to be official documents of the Office of the Insurance Commissioner, [for which reason] they shall not be subject to applicable laws regarding public documents.
History —Ins. Code, added as § 40.440 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 42.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4045/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4045 - Liquidation—External audit of the administrator’s books
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4045 - Liquidation—External audit of the administrator’s books
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The Receivership Court may order audits to be conducted on the books of the rehabilitation and liquidation proceedings established pursuant to this chapter and a copy of the audit report shall be filed with the Commissioner and another with the Receivership Court. The books, records and other documents of the administration shall be made available to the auditor at any time without prior notice. The expenses of each audit shall be deemed to be costs of the administration of the rehabilitation or liquidation proceedings.
History —Ins. Code, added as § 40.450 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 43.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4046/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4046 - Liquidation—Custody of property of foreign or alien insurers
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4046 - Liquidation—Custody of property of foreign or alien insurers
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(1) If a domiciliary liquidator has not been appointed, the Commissioner may request by verified petition that the Court of First Instance issue an order for the Commissioner to act as conservator of the property in Puerto Rico of an alien insurer not domiciled in Puerto Rico or a foreign insurer on one or more of the following grounds:
(a) Any of the grounds established in § 4009 of this title.
(b) That property of the insurer has been sequestered through official action in his/her domiciliary state, or in any other state.
(c) That a considerable portion of his/her property has been sequestered in a foreign country giving reasonable cause to fear that the insurer is or may become insolvent.
(d)
(1) That his/her certificate of authority to do business in Puerto Rico has been revoked, or that none was ever issued, and
(2) that there are residents of Puerto Rico with outstanding claims or policies in force.
(2) When an order is requested pursuant to subsection (1) of this section, the court shall cause the insurer to be given notice and shall grant it ten (10) days to respond.
(3) The court may issue the order in the terms it deems appropriate. The recording of the order with the Clerk of the Court of First Instance in the area where the main office of the insurer is located, or where the main business of the aforesaid is conducted, and in the case of real estate, with the Property Registrar where the same is located, shall have the same effect of notice as a deed, bill of sale or any other evidence of title duly filed and recorded with the Property Registrar would have on third parties.
(4) The conservator may at any time petition the court and the Court may grant an order pursuant to § 4047 of this title to liquidate the assets of a foreign or alien insurer under conservator, or, if appropriate, an order under § 4049 of this title to be appointed ancillary receiver.
(5) The conservator may at any time petition the court for an order terminating the conservation of an insurer. If the court determines that the conservation is no longer necessary, it shall order that possession of property and control of business be restored to the insurer and may order the insurer to reimburse the conservator the expenses incurred by him/her during the proceeding for the conservation of the property of the insurer. The court may also arrive at this conclusion and issue such an order on the motion of any interested party, but if such a motion is denied, the petitioner shall pay all costs that may be imposed.
(6) The conservator may liquidate property of the insurer, if necessary, in order to defray the expenses incurred in the initiation of the proceedings and the administration of the property of the insurer, as provided by this section.
History —Ins. Code, added as § 40.460 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 44.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4047/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4047 - Liquidation—Property of foreign or alien insurers located in Puerto Rico
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4047 - Liquidation—Property of foreign or alien insurers located in Puerto Rico
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(1) If no domiciliary administrator has been appointed, the Commissioner may petition to the Court of First Instance, by verified petition, to issue an order directing him/her to liquidate the assets located in Puerto Rico of a foreign insurer or an alien insurer not domiciled in Puerto Rico, on any of the following grounds:
(a) Any of the grounds established in § 4009 or 4014 of this title, or
(b) any of the grounds established in § 4046(1)(b)–(d) of this title.
(2) When an order is requested under subsection (1) of this section, the court may order that the insurer be given notice and grant the same a term of ten (10) days to respond.
(3) If the court should determine that the best interests of the policyholders, creditors and the public so require, it may issue a liquidation order under the terms it shall deem appropriate. The filing or recording of the order with the Clerk of the Court of First Instance, or in the case of real estate, with the Property Registry of the area where such property is located, shall have the same effect of notice as a deed, bill of sale or other evidence of title duly filed and recorded with the Property Registry would have on third parties.
(4) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding pursuant to this section, the liquidator shall thereafter act as an ancillary receiver under § 4049 of this title.
(5) On the same grounds established in subsection (1) of this title the Commissioner may petition any court with jurisdiction to be appointed receiver to liquidate that portion of the assets and business of the insurer over which the court has jurisdiction or any lesser portion thereof that the Commissioner may deem desirable for the protection of the policyholders and creditors in Puerto Rico.
(6) The court shall order the Commissioner, when he/she has liquidated the assets of a foreign or alien insurer under this section, to pay the claims of the residents of Puerto Rico against the insurer under those rules established in this chapter for the liquidation of insurers and that are otherwise compatible with the provisions of this section.
History —Ins. Code, added as § 40.470 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 45.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4048/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4048 - Liquidation—Liquidators domiciled in other states
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4048 - Liquidation—Liquidators domiciled in other states
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(1) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall be vested, except regarding special deposits and security on secured claims pursuant to § 4049(3) of this title, with the title to all the assets, property, contracts, rights of action, balances of authorized representatives and all the books, accounts and other records of the insurer located in Puerto Rico. The date of vesting shall be the date of filing the petition, if that is the date specified in the domiciliary law for the vesting of property title in the domiciliary state. Otherwise, the date of vesting shall be the date of issue of the order to take possession of the property. The domiciliary liquidator shall have the immediate right to recover balances due from authorized representatives and obtain possession of the books, accounts and other records of the insurer located in Puerto Rico. He/she shall also have the right to recover all other assets of the insurer located in Puerto Rico, subject to the provisions of § 4049 of this title.
(2) Full faith and credit shall be given to all statutory provisions of reciprocal states and to orders issued by courts of competent jurisdiction in relation to the appointment of a rehabilitator, liquidator or administrator of an insurer, and any related proceeding.
(3) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the Commissioner of that state shall be vested, by operation of law, with the title to all the property, contracts and rights of action, and over all the books, accounts and other records of the insurer located in Puerto Rico, at the same time that the domiciliary liquidator is vested with the title in the domicile. The Commissioner of Puerto Rico may request a conservation or liquidation order pursuant to § 4046 or 4047 of this title, or for an ancillary administration under § 4049 of this title or may, with the approval of the Court of First Instance, transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(4) Claimants residing in Puerto Rico may file claims with the liquidator or the ancillary administrator, if any, in Puerto Rico, or with the domiciliary liquidator, if allowed under the domiciliary law. The claims shall be filed on or prior to the last date fixed for filing claims in the domiciliary liquidation proceedings.
History —Ins. Code, added as § 40.480 on Aug. 17, 1991, No. 72, § 1; Jan. 19, 2006, No. 10, § 9; Dec. 14, 2007, No. 206, § 46.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4049/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4049 - Liquidation—Formal ancillary proceeding
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4049 - Liquidation—Formal ancillary proceeding
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(1) If a domiciliary liquidator has been appointed for an insurer not domiciled in Puerto Rico, the Commissioner may request that the Court of First Instance appoint him/her as ancillary administrator in Puerto Rico:
(a) If he finds that there are sufficient assets of the insurer located in Puerto Rico to justify the appointment of an ancillary receiver;
(b) if it is so required for the protection of the creditors or the policyholders in Puerto Rico.
(2) The court may issue an order appointing an ancillary receiver in any terms it may deem appropriate. The filing or recording of the order with the Property Registry in Puerto Rico shall impart the same notice given to third parties by a deed, bill of sales or other evidence of title duly filed or recorded with the Property Registry.
(3) When a domiciliary liquidator has been appointed in a reciprocal state, the ancillary receiver appointed in Puerto Rico may, whenever necessary, aid and assist the domiciliary liquidator to recover the insurer’s assets located in Puerto Rico. The ancillary receiver shall liquidate, as soon as practicable, those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in Puerto Rico from their respective securities, and shall pay the necessary expenses of the proceeding. He/she shall promptly transfer all the remaining assets, books, accounts and records to the domiciliary liquidator. Pursuant to this section, the ancillary receiver and his/her assistants shall have the same powers and the same obligations with respect to the administration of assets as the liquidator of an insurer domiciled in Puerto Rico.
History —Ins. Code, added as § 40.490 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 47.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4050/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4050 - Liquidation—Claims of nonresidents against insurers domiciled in Puerto Rico
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4050 - Liquidation—Claims of nonresidents against insurers domiciled in Puerto Rico
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(1) In a liquidation proceeding initiated in Puerto Rico against an insurer domiciled in Puerto Rico, claimants residing in foreign countries or in states that do not grant reciprocity to Puerto Rico, shall file their claims in Puerto Rico, and the claimants who reside in reciprocal states may do so with the ancillary receivers in their respective states, if any, or with the domiciliary liquidator. Claims must be filed on or before the final date set in the domiciliary liquidation proceedings for the filing of claims.
(2) Claims filed by claimants residing in reciprocal states may be proved either in the liquidation proceedings in Puerto Rico subject to the provisions of this chapter, or in the ancillary proceedings of the reciprocal states, if any. If the domiciliary liquidator of Puerto Rico is given notice of the claims and has the opportunity to appear and be heard, as provided in § 4051(2) of this title with regard to ancillary proceedings, the final allowance of claims by the court undertaking the ancillary proceedings of the reciprocal states shall be conclusive as to the amount and the priority against special deposits or other securities located in such reciprocal states, but shall not be conclusive with regard to priorities against the general assets pursuant to § 4039 of this title.
History —Ins. Code, added as § 40.500 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4051/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4051 - Liquidation—Claims of residents against insurers domiciled in reciprocal states
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4051 - Liquidation—Claims of residents against insurers domiciled in reciprocal states
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(1) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside in Puerto Rico may present their claims with the ancillary receiver in Puerto Rico, if any, or with the domiciliary liquidator. Claims must be filed on or before the final date set in the domiciliary liquidation procedures for the filing of claims.
(2) Claims of claimants residing in Puerto Rico may be proved either in the domiciliary state pursuant to the laws of that state or under the ancillary proceedings in Puerto Rico, if any. If a claimant decides to prove his/her claim in Puerto Rico, he/she shall present his/her claim to the liquidator according to the provisions of §§ 4032 and 4033 of this title. The ancillary receiver shall make his/her recommendation to the court according to the provisions of § 4040 of this title. He/she shall also set a date for a hearing, if necessary, under § 4036 of this title and shall notify the liquidator of the domiciliary state by certified mail or personal service, at least forty (40) days prior to the date of the hearing. If within thirty (30) days after notice the domiciliary liquidator gives notice in writing, by certified mail or by personal service, to the ancillary receiver and the claimant of his/her intention to contest the claim, he/she shall have the right to appear or be represented in any proceeding in Puerto Rico involving the adjudication of the claim.
(3) The final allowance of the claim by the courts of Puerto Rico shall be accepted as conclusive with regard to amount and priority against special deposits or other security locate din Puerto Rico.
History —Ins. Code, added as § 40.510 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4052/
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PR
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Justia›US Law›US Codes and Statutes›Laws of Puerto Rico›2023 Laws of Puerto Rico›TITLE TWENTY-SIX - Insurance (§§ 101 — 10377)›Subtitle 1 - Insurance Generally (§§ 101 — 4513)›Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054)›§ 4052 - Liquidation—Garnishment, attachment and writ of execution
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 40 - Rehabilitation and Liquidation (§§ 4001 — 4054) › § 4052 - Liquidation—Garnishment, attachment and writ of execution
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While liquidation proceedings are pending in Puerto Rico or in any other state, be they denominated as such or not, no action or proceeding in the nature of a garnishment, attachment or writ of execution shall be commenced or maintained in Puerto Rico against the insurer or his/her assets.
History —Ins. Code, added as § 40.520 on Aug. 17, 1991, No. 72, § 1.
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