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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4053/
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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)›§ 4053 - Liquidation—Interstate priorities
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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) › § 4053 - Liquidation—Interstate priorities
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(1) In a liquidation proceeding in Puerto Rico involving one or more reciprocal states, the order of distribution issued in the domiciliary state shall prevail in regard to all the claims of the residents of Puerto Rico and the reciprocal states. All the claims of residents of reciprocal states shall be given equal priority of payment from the general assets regardless of where such assets are located.
(2) The owners of special deposit claims against an insurer for which a liquidator has been appointed in Puerto Rico or in any other state of the United States, shall be given priority against the special deposits pursuant to the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit so that the claim secured by it cannot be paid in full, the claimants may share in the general assets, but the sharing shall be deferred until the general creditors as well as the claimants against other special deposits who have received smaller percentages of their respective special deposits have been paid percentages of their claims equal to the percentage paid from the special deposits.
(3) The owner of a secured claim against an insurer for which a liquidator has been appointed in Puerto Rico or any other state, may surrender his/her security and file his/her claim as a general creditor or the claim may be discharged by recourse to the surety, pursuant to § 4038 of this title, in which case the deficiency, if any, shall be deemed as a claim against the general assets of the insurer as if they were claims of unsecured creditors.
History —Ins. Code, added as § 40.530 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-40/4054/
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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)›§ 4054 - Liquidation—Noncooperation, subordination 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) › § 4054 - Liquidation—Noncooperation, subordination of claims
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(1) If an ancillary receiver in another state or foreign country, whether named as such or not, fails to transfer to the domiciliary liquidator in Puerto Rico any assets within his/her control other than special deposits, reduced only by the expenses of the ancillary receivership, if any, the claims filed with the ancillary receiver, other than special deposit claims or secured claims, shall be included in the corresponding class of claims pursuant to § 4039(7) of this title.
History —Ins. Code, added as § 40.540 on Aug. 17, 1991, No. 72, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4101/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4101 - Program
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4101 - Program
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A medical-hospital professional liability insurance program is hereby established in the Commonwealth of Puerto Rico, which shall be implemented pursuant to the provisions of this chapter. Said program and its activities shall be carried out by insurers licensed to contract accident insurance in Puerto Rico and an Insurers’ Syndicate, as provided in Article 41.020 of this chapter.
History —Ins. Code, added as § 41.010 on Dec. 30, 1986, No. 4, p. 869, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4102/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4102 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4102 - Definitions
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For the purposes of this chapter, the following terms and phrases shall have the meaning set forth below:
(1) Health care or service.— Means any act, action or treatment provided or which should have been provided to a patient by a health service professional or a health care institution.
(2) Damage for malpractice.— Means any damage to a patient by error, omission, fault or negligence as a result of, or inherent in professional services rendered or which should have been rendered by a health service professional or a health care institution.
(3) Health care institution.— Means any facility or organization devoted to the care and maintenance of a patient’s health, including ambulatory surgical services authorized to operate as such, pursuant to the provisions of §§ 331 et seq. of Title 24, except nonprofit asylums as defined in said sections.
(4) Open market.— Means the market constituted by insurers, excluding surplus line insurers, who voluntarily and in the exercise of their rights to free competition, underwrite medical-hospital professional liability insurance policies.
(5) Plan.— Means the Insurers’ Syndicate Operating Plan.
(6) Health services professional.— Shall mean every person duly authorized pursuant to §§ 31–52d, 81–94u and 2851 et seq. of Title 20, and [who] practices the profession of physician, osteopath, dentist or podiatrist.
For the sole purpose that they may be insured by the Insurer’s Syndicate created in this chapter, this definition includes those professionals who are duly authorized to practice as naturopaths and doctors in naturopathy, as established by §§ 2501 et seq. and 2451 et seq. of Title 20.
(7) Medical-hospital professional liability insurance.— Means the professional liability insurance coverage established in this chapter for health service professionals and health care institutions.
(8) Qualified applicant.— Means any health services professional or health care institution, as defined herein, that has been unable to obtain medical-hospital professional liability insurance on the open market or prefers to obtain such insurance through the Syndicate.
(9) Syndicate.— Means the Insurers’ Syndicate to underwrite the medical-hospital professional liability insurance established in this chapter.
History —Ins. Code, added as § 41.020 on Dec. 30, 1986, No. 4, p. 869, § 1; Sept. 19, 1996, No. 242, § 1; Aug. 15, 1999, No. 247, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4103/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4103 - Insurers—Compulsory participation
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4103 - Insurers—Compulsory participation
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Every insurer licensed in Puerto Rico to contract any type of insurance as defined in §§ 404–409 of this title shall participate through the Syndicate in issuing policies as contemplated in this program to cover the financial responsibility which is required hereinafter of the health service professionals and the health care institutions pursuant to what is established in this chapter.
The Commissioner, through regulation to that effect, and when deemed justifiable, shall distribute in equal amounts among insurers authorized in Puerto Rico to underwrite any type of insurance specified in the preceding paragraph, those policies exceeding the financial responsibility required by § 4105 of this title, whenever said persons could not find said coverage with authorized insurers in Puerto Rico, provided that the total policy shall not exceed two hundred and fifty thousand dollars ($250,000) per incident and five hundred thousand dollars ($500,000) per aggregate, and subject to reasonability, adequacy and market experience criteria, as established in § 1204 of this title.
History —Ins. Code, added as § 41.030 on Dec. 30, 1986, No. 4, p. 869, § 1; Dec. 19, 2002, No. 284, § 5.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4104/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4104 - Insurers—Syndicate; operating plan
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4104 - Insurers—Syndicate; operating plan
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A Medical/Hospital Malpractice Insurance Joint Underwriters Syndicate is hereby created to provide such insurance to qualified applicants. The Syndicate shall be composed of all insurers in Puerto Rico authorized to contract any type of insurance as defined in §§ 404–409 of this title. Said insurers shall be members of the Syndicate and their participation in it shall be an indispensable condition for them to be able to continue underwriting insurance in the Commonwealth of Puerto Rico.
(1) The purpose of the Syndicate is to provide medical-hospital professional malpractice insurance to qualified applicants. The Syndicate shall be obliged to provide the limits established in § 4105 of this title. The Syndicate may opt to underwrite limits in excess of those established in § 4105 of this title, for the rate classifications, provided this does not affect the financial situation of the Syndicate.
(2) The Syndicate shall have the power to issue, with regard to the medical-hospital professional malpractice insurance, insurance policies to qualified applicants and to cede and assume reinsurance. Likewise, the Syndicate shall be empowered to issue, at its discretion, public liability insurance policies to those qualified applicants to whom it has issued professional malpractice insurance policies. The Syndicate shall not be subject to the provisions of § 329 of this title, and shall not be bound to transact its insurance through agents or brokers. Neither shall qualified applicants be bound to use agents or brokers to place their insurance with the Syndicate. With the consent of the Commissioner, the Syndicate may delegate on one or more of its members who wish to do so and who do not participate in the open market, or in any other entity, to service its policies and claims on its behalf. The member or entity to be chosen shall be selected through a process of competitive biddings without the cost of the bid necessarily being a determining factor in said selection. In evaluating said selection, the Commissioner shall have the proper authority to ensure that the entity is chosen which proves it has the greatest capability to penetrate the market and provide its services to all geographic areas of the country, safeguard the competitive side of the Syndicate and ensure the most efficient operation thereof.
(3) The Syndicate shall operate under the direction of a Board of Directors composed of nine (9) members. It shall consist of five (5) insurers elected by the insurers who are members of the Syndicate or their authorized representatives, which in the case of a local insurer shall be the respective presidents, and in the case of a foreign insurer shall be its principal officers in Puerto Rico; one (1) private citizen representing the public interest, who may not have any substantial financial interest in health services or insurance providers; one (1) representative of the Department of Health of Puerto Rico, who shall be its Secretary, one (1) representative of the Board of Medical Examiners and one (1) representative of the Puerto Rico Surgeons Association. The directors shall be elected for staggered terms as follows: three (3) directors that represent insurers who are members of the Syndicate shall be appointed for three (3) years and the remaining directors shall hold office for two (2) years. The remaining directors shall be appointed by the Governor of Puerto Rico for a term of three (3) years each and shall hold office until their successors are appointed and take office.
In the case of the representatives of the Board of Medical Examiners and the Puerto Rico Surgeons Association, the Governor shall appoint their representatives with the recommendation of said private entities.
The full Board shall elect the administrator of the Syndicate, who shall not be a director.
(4) The Commissioner of Insurance shall convoke all of the members of the Syndicate annually for the election of the new members of the Board of Directors through a notice to such effects issued at least fifteen (15) days prior to the date the meeting is to be held, and such notice shall specify the date, hour and place said meeting shall take place. The members’ votes in said election shall be weighed in the proportion that the net direct premiums underwritten by each member in the types of insurance mentioned in this section during the former calendar year have to the total direct net premiums underwritten in Puerto Rico for said lines of insurance by all Syndicate members in said year. The members of the Board of Directors shall elect the Chairman and other officers from among themselves according to the standards established by regulations. The Board shall be empowered to designate the Syndicate’s executives and officers.
(5) The insurers that participate in the open market shall have all the rights that the other Syndicate members have, including access to all information that, in the Board of Directors’ judgment, does not place them in a privileged competitive position nor injure the Syndicate’s opportunities to compete with regard to said insurers.
(6) The insurers who operate on the open market as well as the Syndicate shall provide all qualified applicants with medico-hospital professional liability insurance coverage in a uniform insurance policy form for all health service professionals and health care institutions. Said uniform policy form shall meet the requirements established in §§ 1101–1137 of this title, and shall include a clause guaranteeing the right of the insured to be issued line coverage for an undefined term in case his/her coverage for withdrawal or voluntary or involuntary separation from the profession lapses, or in case of the liquidation or closing down of the operations of a health care institution. Said form shall also establish the premium rates that apply to the policy. Likewise, said policy shall contain a clause that provides that in the case of sudden death or total disability of the insured who has not purchased the line coverage, his heirs or tutor, as the case may be, shall be issued line coverage, provided the insured has paid the corresponding premium for the right to exercise this option.
The premium for line coverage shall not exceed double the premium that the insured has paid for the last medico-hospital professional liability coverage, prior to the line coverage, unless in public hearings here required, it is shown beyond reasonable doubt that a greater increase is imposed than that indicated for the premium to be adequate.
The Commissioner shall not approve an increase establishing the rates of premium applicable to the policy without previously holding public hearings where the affected insured, as well as the Syndicate, the insurers who participate in the free market, and any other interested person have an opportunity to express their points of view and to present the reports, documents or actuarial studies deemed pertinent to sustain their position. The Commissioner shall notify the affected parties on the holding of public hearings for the increase in the types of premium, through the publication of a notice, on two occasions within a period of thirty (30) days in a newspaper of general circulation. Such notice shall be made sixty (60) days before holding public hearings. Any decision made by the Commissioner shall be subject to judicial review according to § 226 of this title.
The Commissioner shall review the policy premiums for medical malpractice insurance every two (2) years, according to regulations implemented by the Commissioner for this purpose. However, the Commissioner may hold public hearings for this purpose within the period of two (2) years if conditions and circumstances of the industry or of the medical class so require it.
(7) The Syndicate shall have the general corporate powers established in § 2905 of this title and may sue and be sued and negotiate such contracts that are proper to carry out its purposes.
(8) The Syndicate shall adopt an operating plan within sixty (60) days of being constituted, subject to the approval of the Commissioner, which shall be effective ten (10) days after having been approved by the latter. Should the Commissioner fail to approve the plan in whole or in part, the Board of Directors of the Syndicate shall submit the duly amended and revised plan within fifteen (15) working days after notice of said disapproval and should the Board fail to submit said new plan or should it not be acceptable, the Commissioner shall promulgate his/her own plan or the corresponding part thereof, as the case may be.
The plan shall provide for an efficient, economical, fair and nondiscriminatory administration and for the prompt and efficient marketing of the medical-hospital professional malpractice insurance which will strengthen the competitiveness of the Syndicate in the insurance market and guarantees access to the service to potential insurers. The Board of Directors may, on its own initiative, or at the request of the Commissioner, amend the operating plan, subject to the approval of the Commissioner.
Without it being construed as a limitation, said plan shall contain the following:
(a) The standards, organization and procedures for the administration of the Syndicate, including the designation of the officials that the Board of Directors deems necessary.
(b) The rates, rating plans and rating rules that apply to health service professionals and health care institutions as well as the statistics related to the experience for those two (2) categories of insured; all subject to the provisions of §§ 1201–1240 of this title.
Recognizing the importance of the responsibility of this Syndicate, the Commissioner shall ascertain that the rates are not excessive, inadequate or unfairly unequal.
(c) The rating rules and plans registered with regard to the Plan shall provide standards for the application of surcharges for risks with adverse experience. Such rating rules and plans shall provide for the prompt elimination of said surcharges once the experience returns to normal. Standards may also be provided for risk classification that reflects the experience of losses and expenditures in the different specialties of the practice of the health service professionals or health care institutions, and to recognize the cost of specialist’s reinsurance in the case of risks which merit it because of their nature or the limits of the coverage.
(9) The Commissioner shall be responsible for safeguarding the Syndicate’s right to compete on the open market. To such effects he shall see to it that:
(a) The Syndicate retains the reserves required by law;
(b) the insurers who participate in said market do not use their membership in the Syndicate to limit or weaken the Syndicate’s competitive status, and
(c) the Syndicate’s Board of Directors shall always keep the health service professionals and the health care institutions well informed of the fact that [the] Syndicate is a competitive insurer, and of the services it offers, its rates and its financial responsibility based on the financial backing of the insurance industry. The Commissioner shall require the Syndicate to divulge said information broadly and that, among other measures, it sends [to] each and every one of the health professionals and health care institutions, annually, a written communication containing said information.
(10)
(a) All insurers who are members of the Syndicate shall share in its profits and losses in the proportion that the direct net premiums for the types of insurance specified in § 4103 of this title, underwritten in Puerto Rico by each of said members during the year preceding the year in which the profits or losses are declared, represent to the total of the direct net premiums underwritten in Puerto Rico by all of said members during the preceding year, for said types of insurance.
(b) To these purposes, the Commissioner shall certify to the Syndicate the direct net premiums underwritten during said previous year and the proportions corresponding to the various members of the Syndicate, pursuant to the formulas established in clause (a) of this subsection.
(c) At their option, and subject to the standards established to such effects by the Syndicate, the insurers who are members thereof may participate therein in a higher percentage than that indicated above.
(d) The criteria to participate in the Syndicate may apply to the underwriting of the types of insurance specified in § 4103 of this title, separately, if it is thus provided in the plan.
(e) If an insurer who is a member of the Syndicate becomes insolvent, the obligations contracted by said insurer with the Syndicate shall be distributed among all the other members of the Syndicate in the corresponding proportions as provided in this section. Said insurers shall, in turn, be entitled to claim said sums from the Insurance Guaranty Association created in §§ 3801–3819 of this title.
In those cases in which an insurer retires from the market he shall be obliged to continue his responsibility with the Syndicate until his obligations are extinguished, in the same proportion he had at the date of his retirement.
(11) Any profits obtained from the operation of the Syndicate, as well as any profit that reverts to the participants, shall be exempted from the payment of income taxes. Likewise, the Syndicate shall be exempted from the payment of personal property taxes related to the investments in securities.
(12) The Commissioner shall be empowered to regulate the Syndicate’s operations pursuant to the provisions of this title and in those areas it deems pertinent, especially to ensure its competitive nature and with regard to the use of agents and brokers and the payment of commissions.
(13) Neither the Board of Directors of the Syndicate nor its directors, shall incur financial liability for any action taken in the performance of their duties and powers under this chapter, in their personal or individual capacity, which in the case of insurer members shall mean both the insurer and its representative before the Board of Directors, nor the Syndicate officials, provided they do not act in violation of their fiduciary duties to the Syndicate, or incur any action which directly or indirectly impairs the competitive position, the financial interests or the participation of the Syndicate in the market, or act intentionally to cause damages or are knowingly aware that they may cause any damage.
(14) Any members of the Board of Directors who individually or jointly among themselves or in conjunction with other members of the Syndicate, and acting in violation of their fiduciary duties regarding the Syndicate, incur any action which, directly or indirectly impairs the competitive position, the financial interests or the participation of the Syndicate in the market; use or disclose inside information of the Syndicate which is not equally accessible to other insurer members, or allow the disclosure of inside information with the purpose of harming or benefiting insurers that participate in the free market, shall be individually or collectively liable, as the case may be, to the Syndicate, or to the damaged insurer member, for an amount equal to three (3) times the financial losses that said actions may have caused the latter.
History —Ins. Code, added as § 41.040 on Dec. 30, 1986, No. 4, p. 869, § 1; Aug. 5, 1993, No. 55, § 1; Aug. 23, 1997, No. 99, § 1; Aug. 29, 2002, No. 223, § 1; Dec. 19, 2002, No. 284, § 6; May 21, 2004, No. 119, § 1; Sept. 17, 2004, No. 378, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4105/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4105 - Financial responsibility
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4105 - Financial responsibility
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Every health service professional and healthcare institution shall annually file proof of his/her or its financial liability in the amount of one hundred thousand dollars ($100,000) per incident or up to an aggregate of three hundred thousand dollars ($300,000) per year. The Commissioner may require limits for a maximum of five hundred thousand dollars ($500,000) per medical incident and an aggregate of one million dollars ($1,000,000) per year in the case of healthcare institutions and of those rate classifications of healthcare service professionals engaged in the practice of high risk specialties, upon the holding of public hearings where such professionals or institutions or any other interested party shall have the opportunity of appearing and expressing their points of view on the matter in question and of furnishing any information, documents, or studies to support their position. Those health service professionals who do not practice their profession privately and who work exclusively as employees of private healthcare institutions shall be exempt from this requirement; provided, that they are covered by the proof of financial liability of the latter. Those health service professionals who render services exclusively as employees, officials, agents, consultants or contractors of the Government of Puerto Rico, its agencies, instrumentalities and municipalities shall also be exempt from this requirement, provided that they do not practice their profession privately. Healthcare institutions belonging to and operated or administered by the Commonwealth of Puerto Rico, its agencies, instrumentalities and municipalities shall also be exempt.
The proof of financial responsibility demanded in the first paragraph of this Section shall be presented at the corresponding Board of Examiners or at the Department of Health, as the case may be, no later than the 30th of June of each year and it shall cover the financial responsibility of the health service professional or of the healthcare institution, as the case may be for the following year.
No healthcare professional (employee or contractor) may be included as defendant in a civil action for damages because of culpability or negligence arising from malpractice committed in the practice of his/her profession while said healthcare professional acts in compliance with his/her duties and functions, including teaching duties; in the neonatal or pediatric intensive care units, operating or emergency rooms, and trauma centers of the San Antonio Hospital in Mayagüez, the Mayagüez Medical Center-Dr. Ramón Emeterio-Betances Hospital-its Trauma Center and its offices; to health professionals rendering such services to patients referred by the State Insurance Fund Corporation (SIFC), as well as those Trauma and Stabilization Centers designated as such under Act No. 544-2004. The same limits shall apply to students and residents using the neonatal or pediatric intensive care units, operating or emergency rooms, and trauma centers of the San Antonio Hospital in Mayagüez and the Mayagüez Medical Center-Dr. Ramón Emeterio-Betances Hospital-as a teaching and university research facility. In these cases, the pediatric and neonatal intensive care specialists and pediatricians, as well as the obstetricians/gynecologists and surgeons of the San Antonio Hospital, the Mayagüez Medical Center-Dr. Ramón Emeterio-Betances Hospital-and the corresponding Trauma Center shall be subject to the liability limits set forth in §§ 3077 et seq. of Title 32, for the Commonwealth under similar circumstances.
The liability limits established in this chapter shall be extensive to every healthcare professional intervening in the diagnosis and treatment of Trauma and Stabilization Center patients, from the time of their admission to their discharge, in a duly designated Trauma and Stabilization Center as provided in the regulations adopted in accordance with Act No. 544-2004, regardless of whether such entity is administered or operated by a private entity.
In any civil action in which damages are claimed against the University of Puerto Rico or the Cardiovascular Center of Puerto Rico and the Caribbean; in any case in which a judgment is pronounced for acts which constitute hospital-medical malpractice committed by the employees, faculty members, residents or students of the Medical Sciences Campus of the University of Puerto Rico or physicians rendering services under contract to the University of Puerto Rico in the performance of its institutional duties; in any case in which a judgment is pronounced for acts or omissions which constitute medico-hospital malpractice incurred by the employees of the Cardiovascular Center of Puerto Rico and the Caribbean, any student or resident of the University of Puerto Rico working therein or any government employee assigned to, and performing duties in said Center; or when a judgment is pronounced for acts or omissions which constitute a fault or negligence directly related to the operation of a health care institution by the University of Puerto Rico, the latter or the Cardiovascular Center of Puerto Rico and the Caribbean shall be subject to the liability limits and conditions which §§ 3077 et seq. of Title 32 imposes to demand that the Commonwealth of Puerto Rico be made liable in similar circumstances.
Every health services professional and health care institution must show its financial solvency for the fiscal year in which it shall exercise its function in one of the following manners:
(1) Establish a guarantee fund whose minimum amount in the case of a health services professional shall be, at all times, the amount of the aggregate limit established as provided in this section and in the case of health care institutions for the amount of one million dollars ($1,000,000). In no case may it be drawn against those amounts without the prior authorization of the Commissioner.
Those health care institutions that avail themselves of this option must also comply with the conditions established below and with those others the Commissioner may authorize so that two (2) or more health care institutions may establish guarantee funds in common, provided they also meet the following requirements:
(a) That the guarantee fund be deposited in a trust created according to the laws of the Commonwealth of Puerto Rico.
(b) That the trust invest said funds in securities authorized by this title for the insurers of the country.
(c) That the trust accredits to the guarantee fund the income accrued as a result of its investments.
(d) That any sum needed to ensure that the guarantee fund maintains the minimum level required be replaced, in case disbursements are made to pay claims.
(e) That the trust use the guarantee fund solely and exclusively for paying claims for medical-hospital professional liability and for paying expenses inherent to said claims.
(f) That a risk management plan be established, with emphasis on matters pertaining to the prevention of losses approved by the Commissioner who may authorize that two or more institutions establish guarantee funds in common, provided they meet all requirements herein established.
(2) To have obtained from an insurer active in the free trade market, or from the Syndicate, a professional liability medical-hospital insurance policy for the limits established as provided in this section. Said insurance contract shall contain a provision stating that the insurer or the Syndicate shall previously notify the corresponding Board of Examiners or the Secretary of Health, as the case may be, about the cancellation or termination of the insurance.
(3) Any combination of a professional liability medical-hospital insurance policy and a guarantee fund that meets all minimum requirements herein established.
(4) Should a health services professional or a health care institution fail to comply with the provisions on financial solvency established in this section, the corresponding Board of Examiners or the Secretary of Health, as the case may be, shall suspend the license or the certificate of authority issued in favor of the aforementioned health services professional or the health care institution, to practice the profession or trade.
(5) In those situations in which the health services professional or the health care institution have incurred by error, omission, fault or negligence in acts of professional malpractice or manifest negligence in the practice of their profession or trade, the Board of Examiners corresponding or the Secretary of Health, as the case may be, shall take the disciplinary actions specifically provided by the law, suspend or revoke the license or certificate of authority issued in favor of the health services professional or the health care institution.
(1) To the University of Puerto Rico, the Puerto Rico and the Caribbean Cardiovascular Center, the Center for Diabetes Research, Education, and Medical Services, and the Industrial Hospital of Puerto Rico in any civil action in which damages are claimed;
(2) to the Medical Sciences Campus of the University of Puerto Rico, in any case in which a judgment is pronounced for medical and hospital malpractice committed by its employees, faculty members, residents, students, or physicians rendering services under contract;
(3) to the Industrial Hospital and healthcare professionals working in said institution in any case in which a judgment is pronounced for actions that constitute medical and hospital malpractice committed by its employees or healthcare professionals who are employees or render services under contract;
(4) to the State Insurance Fund Corporation (SIFC) and the healthcare professionals rendering services to the patients of said public corporation for actions that constitute medical and hospital malpractice committed by said professionals while rendering services to patients referred by the SIFC;
(5) to the Puerto Rico and the Caribbean Cardiovascular Center and the health professionals working in said institution in any case in which a judgment is pronounced for actions that constitute medical and hospital malpractice committed by its employees or healthcare professionals providing services therein while carrying out their teaching duties or offering emergency services;
(6) to the Center for Diabetes Research, Education, and Medical Services, the students working therein, and the health professionals rendering services in said institution while carrying out their teaching or other duties for said Center as its employees or contractors;
(7) to the Regional Academic Medical Centers of Puerto Rico, its students, and faculty members in any case in which a judgment is pronounced for actions that constitute medical and hospital malpractice committed by its students or faculty members while carrying out their teaching duties;
(8) to any student or resident of the Medical Sciences Campus of the University of Puerto Rico or any other duly accredited university or any other government employee assigned to and carrying out functions in the Centers mentioned in subsections (2), (3), (4), (5), and (6), and
(9) to the University of Puerto Rico in any case in which a judgment is pronounced for culpable or negligent actions or omissions directly related to the operation of a healthcare institution.
The responsibility limits imposed by §§ 3077 et seq. of Title 32, on the Commonwealth of Puerto Rico under similar circumstances shall apply in the following cases:
History —Ins. Code, added as § 41.050 on Dec. 30, 1986, No. 4, p. 869, § 1; Aug. 24, 1994, No. 98, § 1; Sept. 19, 1996, No. 242, § 2; Aug. 15, 1999, No. 247, § 2; Dec. 19, 2002, No. 284, § 7; Aug. 24, 2004, No. 228, § 1; Aug. 26, 2004, No. 230, § 16; Aug. 23, 2005, No. 62, § 1; Dec. 5, 2006, No. 260, § 1; June 27, 2011, No. 103, § 1; June 27, 2011, No. 104, § 1; Sept. 29, 2012, No. 278, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4105a/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4105a - Incorporation of naturopaths into the insurance program
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4105a - Incorporation of naturopaths into the insurance program
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The Insurer’s Syndicate created by § 4104 of this title, shall establish the measures needed to incorporate the naturopaths and Doctors in Naturopathy to the medico-hospital professional liability insurance program, in such a way that the naturopaths and doctors in naturopathy may begin to apply for coverage in the program thirty (30) days after the approval of this act.
History —Aug. 15, 1999, No. 247, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4106/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4106 - Reports—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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4106 - Reports—To the Commissioner
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The insurers who participate in the open market, as well as the Syndicate shall submit to the Office of the Insurance Commissioner on the form required by him semiannual reports of each and every one of the malpractice claims, court resolutions, adjudications and judicial and extrajudicial transactions which are filed. This information shall be filed in the Office of the Insurance Commissioner on or before the month following the close of the previous semester. The Commissioner, in turn, shall remit a copy of said resolutions and adjudications and transactions, within thirty (30) days after having received them, to the Secretary of Health and the health service professionals board of examiners, as the case may be, to take whatever legal action is pertinent against the health service professionals or health care institutions. Failure to comply with this requirement shall be sanctioned by the Insurance Commissioner pursuant to the provisions of § 321 of this title.
History —Ins. Code, added as § 41.060 on Dec. 30, 1986, No. 4, p. 869, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4107/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4107 - Reports—To the Legislature
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4107 - Reports—To the Legislature
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In view of the public interest which invests medicohospital liability insurance, the Commissioner shall file a report each year before the legislature on the operational results in this line of insurance individually and aggregately of the insurers who participate on the open market and the Syndicate. Said report shall include an evaluation of the operations and the manner that the insurers who are a part of the open market and the Syndicate are handling the needs of the health professionals and the health care institutions. He shall also report any problem that could seriously affect the interests of the participants and the insured, and advise of any legislative measures that should be considered to protect the Syndicate’s operational and financial integrity.
History —Ins. Code, added as § 41.070 on Dec. 30, 1986, No. 4, p. 869, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4108/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4108 - Claims—Complaint
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4108 - Claims—Complaint
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Any civil suit that arises from a claim for damages due to fault or negligence in professional medicohospital malpractice shall be initiated by filing a complaint in the part of the competent court. In these civil suits, the court will have discretion to submit the claim to arbitration as provided in § 4109 of this title. In those cases in which one of the parties does not have sufficient means to pay the costs of the arbitration panel, he shall make it known by means of a motion after having been notified that the court plans to submit the claim for arbitration.
History —Ins. Code, added as § 41.080 on Dec. 30, 1986, No. 6, p. 927, § 1, eff. 60 days after Dec. 30, 1986.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4109/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4109 - Claims—Arbitration panel
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4109 - Claims—Arbitration panel
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The judge of the Court of First Instance before whom a claim is filed for damages for fault or negligence for medico-hospital professional malpractice, may designate an arbitration panel thirty days after the answer to the complaint is filed, or at any other later time when he/she deems it convenient to expedite the procedures and to facilitate a better understanding of the medical controversies involved. The panel shall advise the court and shall produce its findings on the technical aspects of the claim. Provided, That the court, prior to designating said arbitration panel, shall take into consideration, but without being limited thereto, such factors as the technicality of the litigation, the interests of the parties, the time elapsed from the beginning of the dispute and the status of the courtroom calendar.
(1) The arbitration panel shall have functions similar to those of a Special Commissioner under Rule 41 of the 1979 Rules of Civil Procedure for the General Court of Justice of Puerto Rico, App. III of Title 32, and shall be composed of three (3) members selected at the complete discretion of the Judge of the Part before whom the claim is pending. The panel shall be made up of one (1) attorney who shall be its Chairman, a health service professional or a representative of a health care institution who does not have a direct or indirect interest in the case and a person representing the public interest. This last member shall not be an attorney, a health care professional or a person representing a health care institution.
(2) The Secretary of Health of Puerto Rico and the Bar Association of Puerto Rico shall submit to the Chief Justice of the Supreme Court of Puerto Rico within thirty (30) days following the date of approval of this act, and within ninety (90) days after the close of every calendar year, a list of possible candidates to integrate said arbitration panels. The Chief Justice of the Supreme Court may circulate said lists with the additions or omissions he deems necessary to the corresponding Parts of the Court of First Instance for the action they deem pertinent within their discretion.
(a) The court shall, at its discretion, fix the per diem of each member of the panel. The total amount of the per diems as well as the expenses incurred by the arbitration panel in conducting the hearings shall be defrayed by the party against whom judgment is rendered in a manner proportional to the number of persons included by such party in the lawsuit. The court shall have discretion to dismiss, totally or partially, any of the persons of the party against whom judgment has been rendered from the proportional payment of the per diems, if it is proven that said person’s financial resources do not allow him to make the payment, in which case, the party shall contribute with the amount determined by the court, and the remainder shall be defrayed as prorated among the other persons in the party against whom judgment has been rendered.
(b) The amounts of the per diems and expenses incurred by the arbitration panel shall be included as part of the costs of the lawsuit. When the party who is responsible for the costs imposed therefor refuses without a just cause to comply with the order for the payment thereof, the court may impose sanctions in accordance with Rule 34.2 of the 1979 Rules of Civil Procedure for the General Court of Justice, App. III of Title 32.
(3) The nonappearance of any of the parties, their witnesses or attorneys, that cause the suspension of any duly notified meeting, except in the case of prior notice of nonappearance for a just cause and diligently notified, shall cause the payment of the per diems fixed for the members of the panel by the party that causes the suspension.
(4) Any of the parties may object to the designation of a member of the arbitration panel after showing just cause therefore, and the court may replace him at its discretion.
(5) Rule 41 of the 1979 Rules of Civil Procedure for the General Court of Justice, App. III of Title 32, shall govern in all that is applicable regarding the appointment, duties, powers and functions of the arbitration panel referred to in this chapter.
(6) Before the arbitration panel begins to meet, the members thereof shall take an oath before the judge that presides the part that they will hear the evidence presented and issue a fair and equitable report and recommendations. Once they have been sworn they shall be empowered to take sworn statements. The members of the arbitration panel shall have immunity regarding their expressions and recommendations while acting within their official capacity as such.
(7) The arbitration panel shall hold meetings, fix the time thereof and notify the parties. It may also suspend or postpone their meetings and exercise all the powers needed to conduct them. The court in which the suit for damages for fault or negligence due to medico-hospital professional malpractice has been filed, on petition by a party, shall have discretion to direct the arbitration panel to proceed with the meetings without delay.
(8) The arbitration panel shall keep exact and concise minutes of the procedures of its meetings and a stenographic or taped record thereof.
(9) The testimony of the witnesses shall be given under oath. The parties shall be entitled to introduce evidence and to cross-examine witnesses.
(10) The arbitration panel shall hold meetings and render its report with recommendations, when a duly notified party does not appear at the meetings on three (3) consecutive occasions.
(11) The arbitration panel may order the appearance of witnesses, the presentation of documentary evidence and any other evidence needed. The summons shall be issued by the court upon petition of the party or of the arbitration panel, and shall be served and complied with as provided in Rule 40 of the 1979 Rules of Civil Procedure for the General Court of Justice, App. III of Title 32.
(12) The meetings shall be held with the presence of all the members of the arbitration panel.
The procedures before the arbitration panel shall begin within ten (10) days after it has been sworn in. The court, upon a petition of the arbitration panel and for just cause, may extend said term to a maximum of thirty (30) additional days.
(a) The arbitration panel shall issue a majority report within the term established by the court, which shall not exceed sixty (60) days after the date of its last meeting, to receive the evidence. Said report shall contain its findings on proven facts, statement of what the arbitration panel deems is the applicable point of law and its recommendations, which shall be duly grounded.
(b) The report shall be signed by all the members of the arbitration panel, but any of its members may issue a dissident or concurrent opinion in writing, stating the reason therefor.
(c) The report of the arbitration panel shall be submitted before the judge who presides the part and shall have the effect that said judge attributes to it in the exercise of his discretion.
History —Ins. Code, added as § 41.090 on Dec. 30, 1986, No. 6, p. 927, § 2; May 30, 2002, No. 71, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4110/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4110 - Claims—Judgments; payments in installments
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4110 - Claims—Judgments; payments in installments
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In judgments on civil actions for fault or negligence due to medical-hospital professional malpractice in which a compensation that exceeds one hundred thousand dollars ($100,000) is adjudicated, the court, after due petition of the party which justifies its necessity and convenience, or by stipulation, shall order or authorize installment payments of the amounts of the adjudicated compensation or stipulated between the parties in excess of said one hundred thousand dollars ($100,000) by means of a resolution to such effects.
For the purposes of this authorization or order, the court shall consider the financial means and current and future solvency of the parties, the rise in the cost of living, the resources that the party who was favored in the judgment requires for sustenance, and other needs, and anything else required to ensure the payment of the adjudicated compensation within the established terms and conditions. In its resolution, the court shall provide the dates, terms, and conditions of said installment payments, including interest to be paid, payment of the costs of the suit, the convenience of requiring the posting of a surety bond, and any other aspects thereof that are deemed reasonable and necessary.
If the amount of the judgment exceeds the total of the risk covered by a medical-hospital malpractice policy, the court may authorize the payment in installments of such part of the judgment that pertains to the insured’s health care professional or institution.
In no case may the payments for the fixed compensation exceed the term of eight (8) years.
When any installment of the adjudicated compensation is defaulted, the creditor may request the court to disallow the authorization to pay the compensation by installments, and the court shall issue an order requiring the debtor to pay the total unpaid balance in one payment.
If a complainant to whom compensation has been adjudicated dies, his heirs shall be entitled to receive the total of the balance of the adjudicated compensation still unpaid, unless some other thing is agreed to between said heirs and the defendant who is charged with paying the unpaid amount of the judgment.
History —Ins. Code, added as § 41.100 on Dec. 30, 1986, No. 6, p. 927, § 4; Aug. 5, 2003, No. 180, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-41/4111/
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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 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111)›§ 4111 - Claims—Contingent fees; limit
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 41 - Medical-Hospital Professional Liability Insurance (§§ 4101 — 4111) › § 4111 - Claims—Contingent fees; limit
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The term “contingent fees” as used in this chapter means any agreement regarding fees under which the compensation is determined, in whole or in part, with the results obtained in the suit for damages for fault or negligence due to medicohospital professional malpractice against a health care professional or a health care institution.
With the exception of minors and disabled persons, for which the limits of contingent fees provided in § 742 of Title 4, shall prevail, attorneys shall not agree to or collect contingent fees to represent a person in a suit for damages for fault or negligence due to malpractice against a health care professional or a health care institution, in excess of the following compensation limits:
Compensation Fees (a) First $75,000 33% (b) First $75,001 to $150,000 $24,750 plus 25% of the excess $75,000 (c) $150,001 or more $43,500 plus 20% of the excess $150,000
Notwithstanding the above, the court may authorize the charging of contingent fees in these cases up to a maximum of 33% of the final product of the judgment, transaction or agreement, if the attorney should request it and can justify it.
This limit shall be of application [to any] transaction, arbitration award or judicial judgment, or if the person compensated is a nondisabled adult, except for the provisions of subsection (5) of this section.
History —Ins. Code, added as § 41.110 on Dec. 30, 1986, No. 6, p. 927, § 5, eff. 60 days after Dec. 30, 1986.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4201/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4201 - Charitable organizations—Definition
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4201 - Charitable organizations—Definition
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Any corporation or organization that is constituted pursuant to the laws of Puerto Rico, or a corporation or organization that is constituted pursuant to the laws of any state of the union or a foreign country that is duly authorized to do business in Puerto Rico, without capital shares, created as non-profitable, and actively managed for a term of at least five (5) years, prior to applying for a special license to subscribe life annuity contracts exclusively for religious, charitable, scientific, literary or educational purposes, or for the prevention of cruelty to children or animals, and tax exempted under Section 1101(4) of the Puerto Rico Internal Revenue Code of 1994.
History —Ins. Code, added as § 42.010 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4202/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4202 - Special license
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4202 - Special license
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The Commissioner may, at his discretion, issue a special license to charitable organizations to subscribe life annuity agreements known as annuities, with donors in Puerto Rico. The license will authorize the charitable organization to receive cash donations or properties, conditioned to or in exchange for an agreement to pay a life annuity or annuity payments to the donor or to the person designated by the donor, and to issue and execute said annuity contract. It shall also submit evidence that it has been duly registered in the Department of State of Puerto Rico.
No charitable organization may make or issue an annuity contract in Puerto Rico before obtaining a special license issued according to the provisions of this Code.
History —Ins. Code, added as § 42.020 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4203/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4203 - Requirements to obtain a special license
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4203 - Requirements to obtain a special license
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Every charitable organization that requests a special license pursuant to the provisions of this Code shall file the following documents in the Office of the Commissioner:
(1) Certified copies of the [in]corporation charter, [in]corporat[ion] articles, and regulations. Foreign corporations shall also file a certified copy of their authorization to do business in Puerto Rico.
(2) A copy of the administrative authorization or determination issued by the Department of the Treasury of its designation as a tax-exempt entity.
(3) In the case of a foreign charitable organization that has a charitable annuity program in its state of origin or other state, district, territory, province or country, a certificate of the proper authorities evidencing the authorization of said program, if the issuing of charitable annuities is regulated in said jurisdiction; or a certification of the proper authority of the state or country to the effect that said issue is not regulated in the jurisdiction.
(4) Certified financial statements of the charitable organization for the last year.
(5) Copies of the annuity contract forms with the donors for evaluation by the Commissioner, who shall approve the model subject to the requirements of § 1111 of this title. Provided, That the contract should at least include information on:
(a) The value of the property or thing that is donated, which shall be its market value as of the date of the donation, as determined under Article 3206(c) of the Puerto Rico Internal Revenue Code of 1994;
(b) the amount of the annuity to be paid to the donor or the persons designated by him;
(c) the manner and interval [in] which the payments will be made;
(d) the age of the person to whom the payments will be made, and
(e) the present value of the annuity benefits created on the date that the annuity contract is issued based on the valuation standards established by the Commissioner. Said value shall not be less than 15% of the value of the original donation, but its determination shall also be subject to the requirement of a residual established in subsection (6) of this section.
(6) A table of maximum annuity rates, which shall be based on the annuity standards adopted by the charitable organization to calculate its reserves, so that the residual contemplated to be withheld by the organization shall not be greater than one half of the original donation made by the donor. The rates used to calculate said reserves shall be, as a maximum, lower by one percentile point to the rates applicable to the annuities marketed by the insurers.
(7) A sworn statement [by] each director and official of the Board of Directors, that he/she has not been convicted of a felony or a crime that implies moral turpitude and that he/she has not filed for bankruptcy.
(8) Proof that the charitable organization is a member of the American Council on Gift Annuities, or any entity that is a successor thereof.
(9) Any other information that the Commissioner deems is necessary.
History —Ins. Code, added as § 42.030 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4204/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4204 - Required funds
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4204 - Required funds
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The charitable organization shall possess and keep on deposit, assets for a value equal to the total of its reserves on annuity contracts in effect, plus a minimum surplus of ten percent (10%) of said reserves.
Upon determining said reserves, a deduction for the total or any portion of the risks of the annuities that are reinsured by a life insurance company authorized by the Insurance Commissioner to issue life insurance in Puerto Rico, shall be allowed.
The funds required for these annuities shall be invested in those investments authorized by this Code for the investment of the assets of the life insurance companies, and subject to the same limitations. Every authorized foreign charitable organization or [one] that requests authorization for a special license [to invest] its funds pursuant to the laws of the state, district, territory, country or province in which it is incorporated, shall be deemed to fulfill the requirements of this section for the investment of funds.
The required funds, and the income and earnings obtained from said funds, shall be kept apart as designated and separate funds, regardless of the other funds of the charitable organization, and shall not be used to pay debts or obligations nor for any purpose other than the payment of the benefits of the charitable annuities. The general assets of the charitable organization shall be responsible for any insufficiency of the funds thus segregated to meet the commitments contracted under the annuity contracts issued by said organization.
History —Ins. Code, added as § 42.040 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4205/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4205 - Annual reports
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4205 - Annual reports
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The charitable organization shall present an annual report to the Insurance Commissioner before March 31 of each year on the financial condition of the segregated fund of the charitable organization, in the form and with the general contents approved by the Commissioner of Insurance, unless the Commissioner extends said term.
History —Ins. Code, added as § 42.050 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4206/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4206 - Revocation or suspension of license
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4206 - Revocation or suspension of license
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The Commissioner may investigate the operations of the charitable annuity programs of the charitable organizations holding special licenses, as empowered by §§ 201–232 of this title. If the Commissioner determines, after due notice and hearing, that a charitable organization holding a special license has not complied with the requirements of §§ 4201–4210 of this title, the Commissioner may revoke or suspend said special license or direct the charitable organization to desist from making new annuity contracts until it complies with said requirements.
History —Ins. Code, added as § 42.060 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4207/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4207 - Exemptions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4207 - Exemptions
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Every charitable organization that obtains and maintains a special license shall be governed by the provisions of §§ 4201–4210 of this title, and those provisions of this Code that, because of their nature, are compatible with the purpose and scope of said sections.
History —Ins. Code, added as § 42.070 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4208/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4208 - Solicitation, negotiation, acquisition or subscription of annuity contracts
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4208 - Solicitation, negotiation, acquisition or subscription of annuity contracts
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(1) The solicitation, negotiation, acquisition or subscription of annuity contracts shall be done directly by the charitable organization, its officers, salaried employees, and volunteers, and not by agents or other intermediaries.
(2) The charitable organizations mentioned in §§ 4201–4210 of this title, shall submit a list of all the persons who shall solicit, negotiate, obtain and subscribe annuity contracts, before the Commissioner, certifying that they have the necessary training and knowledge to carry out these tasks. Any changes or additions to the list shall be reported to the Commissioner within fifteen (15) days following the effectiveness of said additions or changes.
(3) Before accepting any property that is transferred to the charitable organization in exchange for an annuity contract, the organization shall obtain a sworn statement signed by the potential donor attesting to the following terms of the contract:
(a) The value of the transferred property.
(b) The amount of the periodic payments of the annuity contract.
(c) The manner that the payments are to be paid and the intervals for the payments.
(d) The fair value of the benefits created as of the date of the agreement.
(e) The date the payments shall begin.
(4) In addition to the above statements, the charitable organization shall obtain a written statement from the potential donor attesting that it has been informed that the payments made under the annuity contract are solely guaranteed by the full faith and credit of the organization; are not guaranteed or insured by an insurer; are not protected in any way by surety associations; and are not backed in any way by the Government of Puerto Rico.
(5) The requirements of subsections (3) and (4) of this section may be fulfilled by a recognition that is a part of the annuity contract that is signed by the donor.
History —Ins. Code, added as § 42.080 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4209/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4209 - Personal liability
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4209 - Personal liability
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No director, official or employee of the charitable organization shall be liable for the payment of any benefit provided by the annuity contract.
(1) No charitable organization shall discriminate or allow unreasonable discrimination between beneficiaries with the same life expectancy under life annuities of the same class when establishing the terms and conditions of the annuity contracts it issues.
(2) No charitable organization, per se or through others, shall give, offer, promise, grant, establish or pay, directly or indirectly, any asset or incentive to a donor to accept an annuity contract whose clauses and conditions are not those stated in the annuity certificate.
(3) The provisions of this Code shall be governed, as may be relevant, according to the provisions of the Civil Code of Puerto Rico concerning donations.
History —Ins. Code, added as § 42.090 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42/4210/
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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 42 - Charitable Annuities (§§ 4201 — 4210)›§ 4210 - Rules and regulations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42 - Charitable Annuities (§§ 4201 — 4210) › § 4210 - Rules and regulations
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The Commissioner may issue reasonable rules and regulations that will put any provisions of §§ 4201–4210 of this title into effect pursuant to § 204 of this title.
History —Ins. Code, added as § 42.110 on Aug. 12, 1999, No. 230, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4221/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4221 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4221 - Definitions
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(a) Fraudulent viatical settlement acts.— Include:
(1) Acts or omissions committed by any person who, knowingly or with intent to defraud, for the purpose of depriving another of property or for profit, commits, or permits its employees or its agents to engage in acts including:
(A) Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by a viatical settlement provider, viatical settlement broker, viatical settlement purchaser, viatical settlement investment agent, financing entity, insurer, insurance producer or any other person, false material information, or concealing material information, as part of, in support of or concerning a fact material to one or more of the following:
(i) An application for the issuance of a viatical settlement or insurance policy.
(ii) The underwriting of a viatical settlement or insurance policy.
(iii) A claim for payment or benefit pursuant to a viatical settlement or insurance policy.
(iv) Premiums paid on an insurance policy.
(v) Payments and changes in ownership or beneficiary made in accordance with the terms of a viatical settlement or insurance policy.
(vi) The reinstatement or conversion of an insurance policy.
(vii) The solicitation, offer, execution or sale of a viatical settlement or insurance policy.
(viii) The issuance or disclosure of written evidence of a viatical settlement or insurance policy.
(ix) A financing transaction.
(B) Employing any device, scheme, or artifice to defraud in relation to a viaticated insurance policy.
(2) Committing or allowing its employees or agents to commit the following acts in the furtherance of a fraud or to prevent the detection of a fraud:
(A) Remove, conceal, alter, destroy or sequester from the Commissioner the assets or records of an authorized person or entity.
(B) Misrepresent or conceal the financial condition of the authorized person or entity, financing entity, insurer or other person.
(C) Transact the business of viatical settlements in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of viatical settlements.
(D) File with the Commissioner or the chief insurance regulatory officer of another jurisdiction a document containing false information or that otherwise conceals information about a material fact from the Commissioner.
(3) Embezzlement, theft, misappropriation or conversion of monies, funds, premiums, credits or other property of a viatical settlement provider, insurer, insured, viator, insurance policy owner or any other person engaged in the viatical settlement business or insurance.
(4) Recklessly entering into, brokering, or otherwise dealing in a viatical settlement, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, where the viator or the viator’s agent intended to defraud the policy’s issuer. “Recklessly” means engaging in the conduct in conscious and clearly unjustifiable disregard of a substantial likelihood of the existence of the relevant facts or risks, such disregard involving a gross deviation from acceptable standards of conduct.
(5) Attempting to commit, assisting, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subsection.
(b) Viatical settlement.— Means a written agreement executed in Puerto Rico or in any state of the United States establishing the terms under which compensation or anything of value will be paid, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator’s assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance. A viatical settlement also includes a contract for a loan or other financing transaction with a viator secured primarily by an individual or group life insurance policy, (other than a loan by a life insurance company pursuant to the terms of the life insurance contract), or a loan secured by the cash value of a policy. A viatical settlement includes an agreement with a viator to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the viator. Viatical settlements shall not be considered as securities as the term is defined in § 881(l) of Title 10, part of the act known as the “Uniform Securities Act of Puerto Rico”. Those viatical settlement contracts executed outside the jurisdiction of the Commonwealth of Puerto Rico, shall not be regulated by the Office of the Insurance Commissioner of Puerto Rico, yet, they shall be regulated by the Commissioner of the jurisdiction where said contract was executed, thus being established that its benefits may be sold to purchasers residing in the Commonwealth of Puerto Rico.
(c) Viatical settlement investment agent.— Means a person appointed or designated by a viatical settlement provider, who holds a license issued by the Insurance Commissioner, who solicits or arranges the funding for the purchase of a viatical settlement by the viatical settlement purchaser, and who acts on behalf of the viatical settlement provider.
(1) A viatical settlement investment agent shall have no direct contact with the viator, nor shall he/she know the identity of the viator.
(2) A viatical settlement investment agent represents the viatical settlement broker as his/her designated or retained agent.
(3) The acts of the viatical settlement investment agent in the sale or transfer of viatical settlements shall not constitute the purchase, sale or transfer of securities, as said term is defined in § 881(l) of Title 10, part of the act known as the “Uniform Securities Act of Puerto Rico”.
(d) Advertisement.— Means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed before the public, directly or indirectly, for the purpose of creating an interest in or inducing a person to sell a life insurance policy.
(e) Commissioner.— Means the Insurance Commissioner of Puerto Rico.
(f) Viatical settlement buyer.— Means a person who gives a sum of money to another person other than the viator or the insurer in exchange for a life insurance policy or an interest in the death benefits of a life insurance policy; or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns viatical settlements or is the beneficiary of a life insurance policy that has been or shall be the subject of a viatical settlement, for the purpose of making a specific financial profit. A viatical settlement buyer does not include:
(1) A person or entity authorized to do business under this chapter;
(2) an accredited investor or qualified institutional buyer as defined respectively in the Federal Securities Act of 1933, as amended, and its regulations and §§ 851 et seq. of Title 10;
(3) a financing entity;
(4) a special purpose entity, or
(5) a related provider trust.
(g) Viatical settlement purchase agreement.— Means a contract or agreement between a viatical settlement buyer and a person other than a viator, to acquire a life insurance policy or an interest in the death benefits of a life insurance policy, or to acquire an interest in a trust that owns viatical settlements or is the beneficiary of a life insurance policy that has been or shall be the subject of a viatical settlement, with the purpose of making a specific financial profit. The purchase, sale, or transfer of a viatical settlement or any interest therein under a viatical settlement purchase agreement shall not constitute the purchase, sale, or transfer of securities, as said term is defined in § 881(l) of Title 10, known as the “Uniform Securities Act of Puerto Rico”. In order to be applicable, all life insurance policies referred to in this subtitle must have been underwritten by an insurance company that has been assigned a “Good” ranking as a minimum financial strength requirement pursuant to A.M. Best standards.
(h) Viatical settlement broker.— Means a person who on behalf of a viator and for a fee, commission or other valuable consideration offers or attempts to negotiate viatical settlements between a viator and one or more viatical settlement providers. Notwithstanding the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator and owes a fiduciary duty to the viator to act according to the viator’s instructions and in the best interest of the viator. The term does not include an attorney, certified public accountant or a financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the viator and whose compensation is not paid directly or indirectly by the viatical settlement provider or purchaser.
(i) Chronically ill.— Means:
(1) A person unable to perform at least two (2) activities of daily living (i.e., eating, toileting, transferring, bathing, dressing or continence);
(2) a person requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment, or
(3) a person who has a level of disability similar to that described in clause (1) of this subsection as determined by the Secretary of Health.
(j) Terminally ill.— Means a person who has an illness or sickness that can reasonably be expected to result in death in twenty-four (24) months or less.
(k) Special purpose entity.— Means a corporation, partnership, trust, limited liability company or other similar entity formed solely to provide either directly or indirectly access to institutional capital markets for a financing entity or licensed viatical settlement provider.
(l) Financing entity.— Means:
(1) An underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a viatical settlement provider, credit enhancer, or any entity that has a direct ownership in a policy or certificate that is the subject of a viatical settlement contract, but:
(A) Whose principal activity related to the transaction is providing funds to effect the viatical settlement or purchase of one or more viaticated policies, and
(B) who has an agreement in writing with one or more licensed viatical settlement providers to finance the acquisition of viatical settlements.
(2) Financing entity does not include non-accredited investors or viatical settlement purchasers.
(m) Authorized entity or person.— Means the licensed viatical settlement provider and the licensed viatical settlement broker.
(n) Viatical settlement trust.— Means a titling trust or other trust established by a licensed viatical settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. The trust shall have a written agreement with the licensed viatical settlement provider under which the licensed viatical settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to viatical settlement transactions available to the Commissioner as if those records and files were maintained directly by the licensed viatical settlement provider.
(o) Viatical settlement business.— Means an activity involved in the offering, solicitation, negotiation, procurement, effectuation, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner, of viatical settlements and viatical settlement purchase agreement contracts, as well as any other related activity that the Commissioner defines as such through regulations.
(p) Person.— Means a natural person or a legal entity, including, but not limited to, an individual, partnership, limited liability company, association, trust, or corporation.
(q) Policy.— Means an individual or group policy, group certificate, contract or arrangement of life insurance affecting the rights of a resident of the Commonwealth of Puerto Rico or bearing a reasonable relation to the Commonwealth of Puerto Rico, regardless of whether delivered or issued for delivery in Puerto Rico and was underwritten in the United States or in the Commonwealth of Puerto Rico.
(r) Viaticated policy.— Means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement. The purchase, sale or transfer of a viaticated policy or viatical settlement, or any interest therein, shall not constitute the purchase, sale or transfer of securities, as said term is defined in § 881(l) of Title 10, part of the act known as the “Uniform Securities Act of Puerto Rico”.
(s) Viatical settlement provider.— Means a person, other than a viator, who enters into or executes a viatical settlement. Viatical settlement provider does not include:
(1) A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan;
(2) the issuer of a life insurance policy providing accelerated benefits pursuant to the policy;
(3) an authorized or eligible insurer that provides stop loss coverage to a viatical settlement provider, purchaser, financing entity, special purpose entity or related provider trust;
(4) a natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit;
(5) a financing entity;
(6) a special purpose entity;
(7) a related provider trust;
(8) a viatical settlement purchaser, or
(9) an accredited investor or qualified institutional buyer as defined in the “Federal Securities Act of 1933”, as amended, and its regulations and the Uniform Securities Act of Puerto Rico, §§ 851 et seq. of Title 10, who purchases a viaticated policy from a viatical settlement provider.
(t) Viator.— Means the owner of a life insurance policy or a certificate holder under a group policy who enters or seeks to enter into a viatical settlement. For the purposes of this chapter, a viator shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except where specifically addressed. “Viator” does not include:
(1) A person or entity authorized to do business under this chapter;
(2) an accredited investor or qualified institutional buyer as defined respectively in the Federal Securities Act of 1933, as amended, and its regulations and §§ 851 et seq. of Title 10;
(3) a financing entity;
(4) a special purpose entity, or
(5) a related provider trust.
History —Ins. Code, added as § 43.010 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, §§ 1–13; Nov. 7, 2010, No. 166, §§ 1, 2, eff. 90 days after Nov. 7, 2010; June 1, 2012, No. 101, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4222/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4222 - License—Requirements
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4222 - License—Requirements
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(a) Regarding viators residing in Puerto Rico, a person shall not operate as a viatical settlement broker without first obtaining a license from the Insurance Commissioner of Puerto Rico. The annual fees for the viatical settlement broker license shall not be greater than the cost of the annual fees required from a life insurance producer.
If there is more than one viator on a single policy and the viators are residents of different jurisdictions, the viatical settlement shall be governed by the laws of the jurisdiction in which the viator having the largest percentage ownership resides. Should the viators hold equal ownership, the viatical settlement shall be governed by the laws of the jurisdiction of residence of one viator, as agreed upon in writing by all viators concerned.
Regarding viators residing in Puerto Rico, a person shall not operate as a viatical settlement provider without first obtaining a license from the Insurance Commissioner of Puerto Rico and having submitted evidence that he/she is covered under a professional public liability policy.
(b) Regarding viatical settlement purchasers residing in Puerto Rico, a person shall not operate as a viatical settlement investment agent without first obtaining a license issued by the Insurance Commissioner. The annual fees for the viatical settlement investment agent license shall not be greater than the cost of the annual fees required for a life insurance producer license. If there is more than one purchaser of a single policy and the purchasers are residents of different jurisdictions, the viatical settlement purchase agreement shall be governed by the laws of the jurisdiction in which the purchaser having the largest percentage ownership resides. If the purchasers hold equal ownership, the viatical settlement purchase agreement shall be governed by the laws of the jurisdiction of residence of one purchaser, as agreed upon in writing by all purchasers concerned.
(c) A viatical settlement provider may offer, sell or solicit viatical settlement purchase agreements directly to or from viatical settlement purchasers residing in Puerto Rico only if he/she has obtained a license issued by the Insurance Commissioner.
(d) Applicants shall submit their applications to the Commissioner to obtain a viatical settlement broker license and to be authorized to do business as viatical settlement providers on the forms designated by the Commissioner, and such applications shall be accompanied by the payment of the annual fees specified in § 701(1) of this title. If the viator is a resident of another jurisdiction, such viatical settlement shall be governed by the laws of the jurisdiction where the viator is a resident.
(e) Licenses may be renewed from year to year on the anniversary date upon payment of the annual renewal fees specified in subsection (b) of this section. Viatical settlement producers shall renew their licenses in a series of steps pursuant to the rules established by the Commissioner for the renewal of the insurance producer license, which shall be renewed simultaneously. Failure to pay the fees by the renewal date results in expiration of the license.
(f) The applicant shall provide information on forms required by the Commissioner by means of regulation or regulatory document. The Commissioner shall have authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers, members and employees, and the Commissioner may, in the exercise of the Commissioner’s discretion, refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner or member thereof who may materially influence the applicant’s conduct meets the standards of this chapter.
(g) A license issued to a provider authorizes all partners, officers, members and designated employees to act as viatical settlement providers, as applicable, under the license, and all those persons shall be named in the application and any supplements to the application.
(h) Upon the filing of an application and the payment of the license fee, the Commissioner shall make an investigation of each applicant and issue a license if the Commissioner finds that the applicant:
(1) Intends to act in good faith in the performance of activities related to the license applied for.
(2) Has a good business reputation and has had experience, training or education so as to be qualified in the business for which the license is applied for.
(3) If a viatical settlement provider, has provided a detailed plan of operation.
(4) If a legal entity, provides a certificate of good standing from the state of its domicile.
(5) If a viatical settlement provider or viatical settlement producer, has provided an anti-fraud plan that meets the requirements of § 4231 of this title.
(6) If a viatical settlement producer, holds and maintains a valid life insurance producer license.
(i) The Commissioner shall not issue a license to a nonresident applicant, unless a written designation of the producer for service of process is filed and maintained with the Office of the Commissioner, or the applicant has filed with the Commissioner the applicant’s written irrevocable consent that any action may be commenced against the applicant by service of process on the Commissioner.
(j) The viatical settlement providers or viatical settlement producers shall provide to the Commissioner new or revised information regarding officers, shareholders who own ten percent (10%) or more of the stock, partners, directors, members or designated employees within thirty (30) days of the change or of the information thus requested.
History —Ins. Code, added as § 43.020 on Dec. 28, 2005, No. 164, § 2; Jan. 19, 2006, No. 10, § 9; Aug. 4, 2006, No. 147, §§ 14–22; June 30, 2008, No. 104, § 3; Nov. 7, 2010, No. 166, §§ 3–5, eff. 90 days after Nov. 7, 2010; June 1, 2012, No. 101, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4223/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4223 - License—Revocation and denial
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4223 - License—Revocation and denial
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(a) The Commissioner may refuse to issue, suspend, revoke or refuse to renew the license of a viatical settlement provider, or viatical settlement broker if the Commissioner finds that the authorized person or entity:
(1) Made any material misrepresentation of an essential fact in the application for the license;
(2) the authorized person or entity or any officer, partner, member or key management personnel has been convicted of fraudulent or dishonest practices, is subject to a final administrative action or is otherwise shown to be untrustworthy or incompetent;
(3) the viatical settlement provider demonstrates a pattern of unreasonable payments to viators;
(4) the authorized person or entity, or its officer, partner, member or key management personnel has been found guilty of, or has pleaded guilty or nolo contendere to, any felony, or to a misdemeanor involving fraud or moral turpitude, regardless of whether a judgment of conviction be final and unappealable;
(5) the viatical settlement provider has entered into any viatical settlement that has not been approved pursuant to this chapter;
(6) the viatical settlement provider has failed to honor contractual obligations set forth in a viatical settlement.
(7) the broker or the provider no longer meet the requirements for initial licensure or its authorization;
(8) the viatical settlement provider has assigned, transferred or pledged a policy subject to a viatical settlement contract to a person other than a viatical settlement provider licensed in this state, viatical settlement purchaser, an accredited investor or qualified institutional buyer as defined respectively in the Federal Securities Act of 1933, as amended, its Regulations and the Uniform Securities Act of Puerto Rico, §§ 851 et seq. of Title 10, a financing entity, special purpose entity, or viatical settlement trust, or
(9) the authorized person or entity, its officer, partner, member or key management personnel have violated any provision of this chapter.
(b) If the Commissioner denies a license application or suspends, revokes or refuses to renew the license of a viatical settlement provider or a viatical settlement broker, the Commissioner shall conduct a hearing in accordance with the provisions of the Insurance Code of Puerto Rico, its Regulations and §§ 2101 et seq. of Title 3.
History —Ins. Code, added as § 43.030, on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 23.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4224/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4224 - Approval of viatical settlements and disclosure statements
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4224 - Approval of viatical settlements and disclosure statements
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No person shall use a viatical settlement executed in the Commonwealth of Puerto Rico or provide to a viator a disclosure statement form in Puerto Rico unless they have been filed with the Commissioner for his/her approval. The Commissioner shall approve or deny the forms within sixty (60) days after being filed, unless said term is extended for an additional sixty (60) days, if the Commissioner notifies said extension within the initial sixty (60) days. Once the initial term has elapsed, if the Commissioner failed to notify the extension thereof, or the additional term without the Commissioner having denied the forms, it shall be understood that the same are approved. The Commissioner shall disapprove a viatical settlement form or disclosure statement form if, in the Commissioner’s opinion, the contract or provisions contained therein are unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the viator. At the Commissioner’s discretion, the Commissioner may require, through regulations, the submission of advertising material regarding the viatical settlements.
The provider shall submit to the Office of the Insurance Commissioner the viatical settlement purchase agreements solely for knowledge and information purposes.
History —Ins. Code, added as § 43.040 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 24.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4225/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4225 - Reporting requirements and privacy
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4225 - Reporting requirements and privacy
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(a) Every authorized person or entity shall file with the Commissioner on or before March 1 of each year an annual statement containing such information as the Commissioner may prescribe by regulation.
(b) Except as otherwise allowed or required by law, a viatical settlement provider, viatical settlement broker, insurance company, insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insured’s identity, shall not disclose that identity as an insured, or the insured’s financial or medical information to any other person unless the disclosure:
(1) Is necessary to execute a viatical settlement contract between the viator and a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;
(2) is provided in response to an investigation or examination by the Commissioner or any other governmental officer or agency or pursuant to the provisions of § 4231(c) of this title;
(3) is a term of or condition to the transfer of a policy by one viatical settlement provider to another viatical settlement provider;
(4) is necessary to permit a financing entity, related provider trust or special purpose entity to finance the purchase of policies by a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;
(5) is necessary to allow the viatical settlement provider or viatical settlement broker or their authorized representatives to make contacts for the purpose of determining health status, or
(6) is required to purchase stop loss coverage.
History —Ins. Code, added as § 43.050 on Dec. 28, 2005, No. 164, § 2; 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-42a/4226/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4226 - Examinations or investigations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4226 - Examinations or investigations
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(a) Authority, scope and scheduling of examinations.—
(1) The Commissioner may conduct an examination under this chapter of an authorized person or entity as often as the Commissioner in his or her sole discretion deems appropriate.
(2) For purposes of completing an examination of an authorized person or entity under this chapter, the commissioner may examine or investigate any person, or the business of any person, in so far as the examination or investigation is, in the sole discretion of the Commissioner, necessary or material to the examination of the authorized person or entity.
(3) In lieu of an examination of any foreign or alien person or entity authorized in Puerto Rico under this chapter, the Commissioner may, at her/his discretion, accept an examination report on the authorized person or entity as prepared by the Commissioner for the state of domicile or port-of-entry state of said authorized person or entity.
(b) Record retention requirements.—
(1) A person required to be licensed by this chapter shall retain for five (5) years copies of the following documents:
(A) Proposed, offered or executed contracts, purchase agreements, underwriting documents, policy forms, and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later;
(B) all checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction, and
(C) all other records and documents related to the requirements of this chapter.
(2) This section does not waive a person’s obligation to produce these documents to the Commissioner after the retention period has expired if the person has retained the documents.
(3) Records required to be retained by this section must be legible and complete and may be retained in paper, photograph, microprocessor, magnetic, mechanical, or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.
(c) Examination process.—
(1) Upon determining that an examination should be conducted, the Commissioner shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners’ Handbook adopted by the National Association of Insurance Commissioners (NAIC). The examiners may also employ such other guidelines or procedures, as the Commissioner may deem appropriate.
(2) Every authorized person or entity, or person from whom information is sought, its officers, directors and agents shall provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets and computer or other recordings relating to the property, assets, business and affairs of the authorized person or entity being examined. The officers, directors, employees and agents of the authorized person or entity shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of an authorized person or entity, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the Commissioner shall be grounds for suspension or refusal of, or non renewal of any license or authority held by the authorized person or entity to engage in the viatical settlement business or other business subject to the Commissioner’s jurisdiction. Any proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to the Insurance Code of Puerto Rico and the Uniform Administrative Procedures Act of Puerto Rico, §§ 2101 et seq. of Title 3.
(3) The Commissioner shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court.
(4) When making an examination under this chapter, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the authorized person or entity that is the subject of the examination.
(5) Nothing contained in this chapter shall be construed to limit the Commissioner’s authority to terminate or suspend an examination in order to pursue other legal or regulatory action pursuant to the Insurance Code of Puerto Rico. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or administrative action.
(6) Nothing contained in this chapter shall be construed to limit the Commissioner’s authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or administrative action which the Commissioner may, in his or her sole discretion, deem appropriate.
(d) Examination reports.—
(1) Examination reports shall be comprised of only facts appearing upon the books, records or other documents of the authorized person or entity, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from the facts. These reports shall never disclose the viators’ confidential financial, medical or personal information.
(2) The Commissioner shall transmit the report to the authorized person or entity investigated or examined, together with a notice that shall afford the authorized person or entity a reasonable opportunity of not more than twenty (20) days to make a written comment or rebuttal with respect to any matters contained in the examination report.
(3) The Commissioner may initiate any proceedings or actions provided by law, if at his/her discretion the Commissioner determines that it is appropriate as a result of an investigation or examination.
(e) Confidentiality of examination information.—
(1) Names and individual identification data for all viators shall be considered private and confidential information and shall not be disclosed by the Commissioner, unless required by law.
(2) Except as otherwise provided in this chapter, all working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of an investigation or examination made under this chapter, or in the course of analysis or investigation by the Commissioner of the financial condition or market conduct of an authorized person or entity shall be confidential by law and therefore privileged, and shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action, unless otherwise ordered by the court. The Commissioner is authorized to use the documents, materials or other information regarding any administrative or legal action brought as part of the Commissioner’s official duties.
(3) Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the NAIC and its affiliates and subsidiaries shall be confidential by law and therefore privileged information, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action if they are:
(A) Created, produced and/or obtained by or disclosed to the NAIC and its affiliates and subsidiaries in the course of assisting an investigation or examination made under this chapter, or assisting the Commissioner in the analysis or investigation of the financial condition or market conduct of an authorized person or entity, or
(B) disclosed to the NAIC and its affiliates and subsidiaries under clause (4) of this subsection by the Commissioner.
(C) For the purposes of clauses (2) and (3) of this subsection, “act” includes the law of another state or jurisdiction that is substantially similar to this chapter.
(4) Neither the Commissioner nor any person that received the documents, material or other information while acting under the authority of the commissioner, including the NAIC and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information pursuant to clause (1) of this subsection, unless otherwise ordered by the court.
(5) In the performance of his/her duties the Commissioner:
(A) May share documents, materials or other information, including the confidential and/or privileged documents, materials or information pursuant to clause (1) of this subsection, with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that said agency, organization or authority agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;
(B) may receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with the understanding that they are confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information, and
(C) may enter into agreements governing sharing and use of information consistent with this subsection.
(6) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in clause (4) of this subsection.
(7) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall apply and be enforced in any legal or administrative procedure conducted in Puerto Rico.
(8) Nothing contained in this chapter shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the commissioner of any other state or country, or to law enforcement officials of Puerto Rico or any other state or agency of the federal government at any time or to the NAIC, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter.
(f) Conflict of interest.—
(1) An examiner may not be appointed by the Commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This section shall not be construed to automatically preclude an examiner from being:
(A) A viator;
(B) an insured in a viaticated insurance policy, or
(C) a beneficiary in an insurance policy that is proposed to be viaticated.
(2) Notwithstanding the requirements of this clause, the Commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though these persons may from time to time be similarly employed or retained by persons subject to examination under this chapter. These professionals shall never be retained at the same time by the Commissioner or by the person under investigation.
(g) Immunity from liability.—
(1) No cause of action shall arise nor shall any liability be imposed against the Commissioner, the Commissioner’s authorized representatives or any examiner appointed by the Commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this section.
(2) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner’s authorized representative or examiner pursuant to an examination made under this chapter, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. This clause does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in clause (1) of this subsection.
(3) A person identified in clauses (1) or (2) of this subsection shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant damage arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this subsection a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time that it was initiated.
(h) Investigative authority of the Commissioner.— The Commissioner may investigate suspected fraudulent viatical settlement acts and persons engaged in the business of viatical settlements.
History —Ins. Code, added as § 43.060 on Dec. 28, 2005, No. 164, § 2, eff. 90 days after Dec. 28, 2005.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4227/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4227 - Disclosures
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4227 - Disclosures
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(a) With each application for a viatical settlement, a viatical settlement provider or viatical settlement broker shall provide the viator with at least the following disclosures no later than the time the application for the viatical settlement is signed by all parties. The disclosures shall be provided in a separate document that is signed by the viator and the viatical settlement provider or viatical settlement broker, and shall provide the following information:
(1) There are possible alternatives to viatical settlement contracts including any accelerated death benefits or policy loans offered under the viator’s life insurance policy.
(2) Some or all of the proceeds of the viatical settlement may be taxable under state income tax and other state or federal taxes, and assistance should be sought from a professional tax advisor.
(3) Proceeds of the viatical settlement could be subject to the claims of creditors.
(4) Receipt of the proceeds of a viatical settlement may adversely affect the viator’s eligibility for Medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate government agencies.
(5) The viator has the right to rescind a viatical settlement for fifteen (15) calendar days after the receipt of the viatical settlement proceeds by the viator, as provided in § 4228(c) of this title. If the insured dies during the rescission period, the settlement contract shall be deemed to have been rescinded, subject to repayment of all viatical settlement contract proceeds and any premiums, loans and loan interest to the viatical settlement provider or purchaser.
(6) Funds will be sent to the viator within three (3) business days after the viatical settlement provider has received the insurer or group administrator’s acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated.
(7) The execution of a viatical settlement may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the viator. Assistance should be sought from a financial adviser.
(8) Disclosure to a viator shall include distribution of a brochure describing the process of viatical settlements.
(9) The disclosure document shall contain the following statement language: “All medical, financial or personal information requested or obtained by a viatical settlement provider or viatical settlement broker about an insured, including the insured’s identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to execute the viatical settlement between the viator and the viatical settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.”
(10) The insured may be contacted by either the viatical settlement provider or broker or its authorized representative for the purpose of determining the insured’s health status. This contact is limited to once every three (3) months if the insured has a life expectancy of more than one year, and no more than once per month if the insured has a life expectancy of one year or less.
(b) A viatical settlement provider shall provide the viator with at least the following disclosures no later than the date the viatical settlement is signed by all parties. The disclosures shall be conspicuously displayed in the viatical settlement or in a separate document signed by the viator and the viatical settlement provider or viatical settlement broker, and provide the following information:
(1) The affiliation, if any, between the viatical settlement provider and the issuer of the insurance policy to be viaticated.
(2) The document shall include the name, address and telephone number of the viatical settlement provider.
(3) A viatical settlement broker shall disclose to a prospective viator the amount and method of calculating the broker’s compensation. The term “compensation” includes anything of value paid or given to a viatical settlement broker for the placement of a policy.
(4) If an insurance policy to be viaticated has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be viaticated, the viator shall be informed of the possible loss of coverage on the other lives under the policy and shall be advised to consult with his or her insurance producer or the insurer issuing the policy for advice on the proposed viatical settlement.
(5) The dollar amount of the actual death benefit currently payable to the viatical settlement provider under the policy or certificate. If known, the viatical settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the viatical settlement provider’s interest in those benefits.
(6) The name, business address, and telephone number of the independent third party escrow agent, and the fact that the viator or owner may inspect or receive copies of the relevant escrow or trust agreements or documents.
(c) If the provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate the change in ownership or beneficiary to the insured within twenty (20) days after the change.
History —Ins. Code, added as § 43.070 on Dec. 28, 2005, No. 164, § 2; Jan. 19, 2006, No. 10, § 9; Aug. 4, 2006, No. 147, § 25.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4228/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4228 - General rules
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4228 - General rules
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(a)
(1) A viatical settlement provider executing a viatical settlement shall first obtain:
(A) If the viator is the insured, a written statement from a attending physician with license in effect, that the viator is of sound mind and under no constraint or undue influence to enter into a viatical settlement, and
(B) A document in which the insured consents to the release of his or her medical records to a viatical settlement provider, viatical settlement broker and the insurance company that issued the life insurance policy covering the life of the insured.
(2) Within twenty (20) days of entering into any agreement, option, promise or any other form of understanding, expressed or implied, to viaticate the policy, the viatical settlement provider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy and said notice shall be accompanied by the documents required by clause (3) of this subsection.
(3) The viatical settlement provider shall deliver a copy of the medical release required under clause (1)(B) of this subsection, a copy of the viator’s application for the viatical settlement, the notice required under clause (2) of this subsection and a request for verification, unless other standards are developed by the Commissioner.
(4) The insurer shall respond to a request for verification of coverage submitted on an approved form by a viatical settlement provider within thirty (30) calendar days of the date the request is received and shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract.
(5) Prior to or at the time of execution of the viatical settlement, the viatical settlement contract provider under the jurisdiction of the Commonwealth of Puerto Rico, shall obtain a sworn statement in which the viator consents to the viatical settlement, represents that the viator has a full and complete understanding of the viatical settlement, that he or she has a full and complete understanding of the benefits of the life insurance policy, acknowledges that he or she is entering into the viatical settlement freely and voluntarily and, for persons with a terminal or chronic illness or condition, acknowledges that the insured has a terminal or chronic illness and that the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued.
(6) If a viatical settlement broker performs any of these activities required of the viatical settlement provider, the provider is deemed to have fulfilled the requirements of this section.
(b) All medical information solicited or obtained by any authorized person or entity shall be subject to the applicable provisions of state law related to confidentiality of medical information.
(c) All viatical settlements executed in the Commonwealth of Puerto Rico shall provide the viator with an unconditional right to rescind the settlement for at least fifteen (15) calendar days from the receipt of the viatical settlement proceeds. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the provider of viatical settlements subscribed in the jurisdiction of the Commonwealth of Puerto Rico, of all viatical settlement proceeds, and any premiums, loans, and loan interest that have been paid by the viatical settlement provider or purchaser.
(d) The viatical settlement provider shall instruct the viator to send the executed documents required to effect the change in ownership, assignment or change in beneficiary directly to the independent escrow agent. Within three (3) business days after the date the escrow agent receives the document (or from the date the viatical settlement provider receives the documents, if the viator erroneously provides the documents directly to the provider), the provider shall pay or transfer the proceeds of the viatical settlement executed in the jurisdiction of the Commonwealth of Puerto Rico, into an escrow or trust account maintained in a state or federally-chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Upon payment of the settlement proceeds into the escrow account, the escrow agent shall deliver the original change in ownership, assignment or change in beneficiary forms to the viatical settlement provider’s or related provider trust. Upon the escrow agent’s receipt of the acknowledgment of the properly completed transfer of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement proceeds to the viator.
(e) Failure to tender consideration to the viator for the viatical settlement within the time disclosed pursuant to Section 8A(6) [sic] renders the viatical settlement voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator.
(f) Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider or viatical settlement broker after the viatical settlement is effectuated, shall only be made by the viatical settlement provider or broker licensed in Puerto Rico or its authorized representatives and shall be limited to once every three (3) months for insureds with a life expectancy of more than one year, and to no more than once per month for insureds with a life expectancy of one year or less. The provider or broker shall explain the procedure for these contacts at the time the viatical settlement is entered into. The limitations set forth in this subsection shall not apply to any contacts with an insured for reasons other than determining the insured’s health status. Viatical settlement providers and viatical settlement brokers shall be responsible for the actions of their authorized representatives.
History —Ins. Code, added as § 43.080 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 26.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4229/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4229 - Prohibited practices
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4229 - Prohibited practices
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It is a violation of this chapter for any person to enter into a viatical settlement within a two-year period commencing with the date of issuance of the insurance policy or certificate unless the viator certifies to the viatical settlement provider that one or more of the following conditions have been met within the two-year period:
(a) The policy was issued upon the viator’s exercise of conversion rights arising out of a group or individual policy, provided the total of the time covered under the conversion policy plus the time covered under the prior policy is at least twenty-four (24) months. The time covered under a group policy shall be calculated without regard to any change in insurance carriers, provided the coverage has been continuous and under the same group sponsorship.
(b) The viator is a charitable organization exempt from taxation.
(c) The viator is not a natural person.
(d)
(1) The viator submits independent evidence to the viatical settlement provider that one or more of the following conditions have been met within the two-year period:
(A) The viator or insured is terminally or chronically ill;
(B) the viator’s spouse dies;
(C) the viator divorces his or her spouse;
(D) the viator retires from full-time employment;
(E) the viator becomes physically or mentally disabled and a physician determines that the disability prevents the viator from maintaining full-time employment;
(F) the viator was the insured’s employer at the time the policy or certificate was issued and the employment relationship terminated;
(G) [a] final and unappealable order is entered by a court of competent jurisdiction, on the application of a creditor of the viator, adjudicating the viator bankrupt or insolvent, or approving a petition seeking reorganization of the viator or appointing a receiver, trustee or liquidator to all or a substantial part of the viator’s assets;
(H) the viator experiences a significant decrease in income that is unexpected and that impairs the viator’s reasonable ability to pay the policy premium, or
(I) the viator or insured disposes of his or her ownership interests in a closely held corporation.
The certification required under subsections (a)–(d) shall be sworn and signed before a notary public.
(2) Copies of the independent evidence described in clause (1) of this subsection and documents required by § 4228(a) of this title shall be submitted to the insurer when the viatical settlements provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a sworn statement signed before a notary public by which the viatical settlement contract provider states that the copies are true and correct copies of the documents received by the viatical settlement provider.
(e) If the viatical settlement provider submits to the insurer a copy of the owner or insured’s certification described in subsection (d) of this section when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider, the copy shall be deemed to conclusively establish that the viatical settlement satisfies the requirements of this section and the insurer shall timely respond to the request.
History —Ins. Code, added as § 43.090 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 27.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4230/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4230 - Advertising
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4230 - Advertising
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The purpose of this section is to provide prospective viators with clear and unambiguous statements in the advertisement of viatical settlements and to assure the clear, truthful and adequate disclosure of the benefits, risks, limitations and exclusions of any viatical settlement. This purpose is intended to be accomplished by the establishment of guidelines and standards of permissible and impermissible conduct in the advertising of viatical settlements to assure that product descriptions are presented in a manner that prevents unfair, deceptive or misleading advertising and is conducive to accurate presentation and description of viatical settlements through the advertising media and material used by authorized persons or entities to negotiate said contracts.
(a) This section shall apply to any advertising of viatical settlements or related products or services intended for dissemination in Puerto Rico, including Internet advertising viewed by persons located in Puerto Rico. Where disclosure requirements are established pursuant to federal regulation, this section shall be interpreted so as to minimize or eliminate conflict with federal regulation whenever possible.
(b) Every person or entity authorized to negotiate viatical settlements shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its contracts, products and services. All advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the person or entity authorized to negotiate viatical settlements, as well as of the individual who created or presented the advertisement. The system of control shall include a regular routine notification, at least once a year, to agents and others authorized by the authorized person or entity to negotiate viatical settlements to disseminate advertisements of the requirements and procedures for approval prior to the use of any advertisements not furnished by the authorized person or entity.
(c) Advertisements shall be truthful and not misleading in fact or by implication. The form and content of an advertisement of a viatical settlement contract, product or service shall be sufficiently complete and clear so as to avoid deception. It shall not have the capacity or tendency to mislead or deceive. Whether an advertisement has the capacity or tendency to mislead or deceive shall be determined by the Commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.
(d) The information required to be disclosed under this section shall not be underrated, rendered obscure, or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.
(1) An advertisement shall not omit material information or use words, phrases, statements, references or illustrations if the omission or use has the capacity, tendency or effect of misleading or deceiving viators, as to the nature or extent of any benefit, covered loss, payable premium, or state or federal tax consequence. The fact that the viatical settlement offered is made available for inspection prior to the closing of the sale, or an offer is made to refund the payment if the viator is not satisfied or that the viatical settlement includes a “free look” period that satisfies or exceeds legal requirements, does not remedy misleading statements.
(2) An advertisement shall not use the name or title of an insurer or a life insurance policy unless the advertisement has been approved by the insurer.
(3) An advertisement shall not state or imply that interest charged on an accelerated death benefit or a policy loan is unfair, inequitable or in any manner an incorrect or improper practice.
(4) The words “free”, “no cost”, “without cost”, “no additional cost”, “at no extra cost”, or words of similar import shall not be used with respect to any benefit or service unless true. An advertisement may specify the charge for a benefit or a service or may state that a charge is included in the payment or use other appropriate language.
(5) Testimonials, appraisals or analysis used in advertisements must be genuine; represent the actual opinion of the author; be applicable to the viatical settlement product or service advertised; and be accurately reproduced with sufficient completeness to avoid misleading or deceiving prospective viators. In using testimonials, appraisals or analysis, the person or entity authorized to negotiate viatical settlements makes as its own all the statements contained therein, and the statements are subject to all the provisions of this section.
(A) If the individual making a testimonial, appraisal, analysis or an endorsement has a financial interest in the viatical settlement provider or related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than required union scale wages, that fact shall be prominently disclosed in the advertisement.
(B) An advertisement shall not state or imply that a viatical settlement benefit or service has been approved or endorsed by a group of individuals, society, association or other organization unless that it is indeed the case, and unless any relationship between an organization and the person or entity authorized to negotiate viatical settlements is disclosed. If the entity making the endorsement or testimonial is owned, controlled or managed by the person or entity authorized to negotiate viatical settlements or receives any payment or other consideration from the person or entity authorized to negotiate viatical settlements for making an endorsement or testimonial, that fact shall be disclosed in the advertisement.
(C) When an endorsement refers to benefits received under a viatical settlement, all pertinent information shall be retained for a period of five (5) years after its use.
(e) An advertisement shall not contain statistical information unless it accurately reflects recent and relevant facts. The source of all statistics used in an advertisement shall be identified.
(f) An advertisement shall not disparage insurers, viatical settlement providers, viatical settlement brokers, viatical settlement investment agents, insurance producers, policies, services or methods of marketing.
(g) The name of the person or entity authorized to negotiate viatical settlements shall be clearly identified in all advertisements about the authorized person or entity or its viatical settlements, products or services, and if any specific viatical settlement is advertised, the viatical settlement shall be identified either by form number or some other appropriate description. If an application is part of the advertisement, the name of the viatical settlement provider shall be shown on the application.
(h) An advertisement shall not use a trade name, group designation, name of the parent company of a person or entity authorized to negotiate viatical settlements, name of a particular division of said authorized person or entity, service mark, slogan, symbol or other device or reference without disclosing the name of said authorized person or entity, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the person or entity authorized to negotiate viatical settlements, or to create the impression that a company other than said authorized person or entity would have any responsibility for the financial obligation under a viatical settlement.
(i) An advertisement shall not use any combination of words, symbols or physical materials that by their content, phraseology, shape, color or other characteristics are so similar to a combination of words, symbols or physical materials used by a government program or agency or otherwise appear to be of such a nature that they tend to mislead prospective viators into believing that the solicitation is in some manner connected with a government program or agency.
(j) An advertisement may state that the person or entity authorized to negotiate viatical settlement contracts is licensed in Puerto Rico or in any other jurisdiction where the advertisement appears, provided, it does not exaggerate that fact or suggest or imply that competing authorized persons or entities may not be so licensed. The advertisement may ask the audience to consult the website of the authorized person or entity, or contact the department of insurance to find out if said jurisdiction requires licensing and, if so, whether the viatical settlement provider or broker is licensed.
(k) An advertisement shall not create the impression that the viatical settlement provider, its financial condition or status, the payment of its claims or the merits, desirability, or advisability of its viatical settlement are recommended or endorsed by any government entity.
(l) The name of the actual authorized person or entity shall be stated in all of its advertisements. An advertisement shall not use a trade name, any group designation, name of any affiliate or controlling entity of the authorized person or entity, service mark, slogan, symbol or other device in a manner that would have the capacity or tendency to mislead or deceive as to the true identity of the authorized person or entity or create the false impression that an affiliate or controlling entity would have any responsibility for the financial obligation of the authorized person or entity.
(m) An advertisement shall not directly or indirectly create the impression that any division or agency of the Commonwealth of Puerto Rico or of the United States Government endorses, approves or favors:
(1) Any person or entity authorized to negotiate viatical settlements or its business practices or methods of operation; or
(2) the merits, desirability or advisability of any viatical settlement; or
(3) any viatical settlement, or
(4) any life insurance policy or life insurance insurer.
(n) If the advertisement emphasizes the speed with which the viatication process will occur, the advertising must disclose the average time frame from completed application to the date of offer, and from acceptance of the offer to receipt of the funds by the viator.
(o) If the advertising emphasizes the dollar amounts available to viators, the advertising shall disclose the average purchase price as a percent of face value obtained by viators contracting with the authorized person or entity during the past six (6) months.
History —Ins. Code, added as § 43.100 on Dec. 28, 2005, No. 164, § 2; Jan. 19, 2006, No. 10, § 9; Aug. 4, 2006, No. 147, § 28.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4231/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4231 - Fraud prevention and control
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4231 - Fraud prevention and control
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(a) [Prohibition].— Fraudulent viatical settlement acts or practices, interference and participation of convicted felons are hereby prohibited.
(1) A person shall not commit a fraudulent viatical settlement act.
(2) A person shall not knowingly or intentionally interfere with the enforcement of the provisions of this chapter or investigations of suspected or actual violations of this chapter.
(3) A person in the viatical settlement business shall not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the [viatical] settlement business.
(b) Fraud warning.—
(1) Viatical settlements and applications for viatical settlements, regardless of the form of transmission, shall contain the following statement or a substantially similar statement: “Any person who knowingly presents false information in an application for insurance or viatical settlement is guilty of a crime and may be subject to fines and imprisonment.”
(2) The lack of a statement as required in clause (1) of this subsection does not constitute a defense in any prosecution for a fraudulent viatical settlement act.
(c) Mandatory reporting of fraudulent viatical settlement acts.—
(1) Any person engaged in the business of viatical settlements having knowledge or a reasonable belief that a fraudulent viatical settlement act is being, will be or has been committed shall provide to the Commissioner the information required by, and in a manner prescribed by, the Commissioner.
(2) Any person having knowledge or a reasonable belief that a fraudulent viatical settlement act is being, will be or has been committed may provide to the Commissioner the information required by, and in a manner prescribed by the Commissioner.
(d) Immunity.—
(1) No civil liability shall be imposed on, and no cause of action shall arise from a person’s furnishing information concerning suspected, anticipated or completed fraudulent viatical settlement acts or suspected or completed fraudulent insurance acts, if the information is provided to or received from the following persons or entities:
(A) The Commissioner or the Commissioner’s employees, agents or representatives;
(B) federal, state or local law enforcement or regulatory officials or their employees, agents or representatives;
(C) any person involved in the prevention and detection of fraudulent viatical settlement acts or that person’s agents, employees or representatives;
(D) the National Association of Insurance Commissioners (NAIC, English acronym), National Association of Securities Dealers (NASD, English acronym), the North American Securities Administrators Association (NASAA, English acronym), or their employees, agents or representatives, or other regulatory agency overseeing life insurance, viatical settlements, securities or investment fraud, or
(E) the life insurer that issued the life insurance policy covering the life of the insured.
(2) Clause (1) of this subsection shall not apply to statements made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a fraudulent viatical settlement act or a fraudulent insurance act, the party bringing the action shall plead specifically any allegation that clause (1) of this subsection does not apply because the person filing the report or furnishing the information did so with actual malice.
(3) A person identified in clause (1) of this subsection shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant damage arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this section a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time that it was initiated.
(4) This section does not repeal or modify the privileges or immunities enjoyed by a person described in clause (1) of this subsection.
(e) Confidentiality.—
(1) The documents and evidence provided pursuant to subsection (d) of this section or obtained by the Commissioner in an investigation of fraudulent viatical settlement acts shall be privileged and confidential, and shall not be a public record nor be subject to discovery or subpoena in a civil or criminal action.
(2) Clause (1) of this subsection does not prohibit release by the Commissioner of documents and evidence obtained in an investigation of viatical settlement acts, under the following circumstances:
(A) In administrative or judicial proceedings to enforce laws administered by the Commissioner;
(B) to federal, state or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraudulent viatical settlement acts or to the NAIC, or
(C) at the discretion of the Commissioner, to a person in the business of viatical settlements that is aggrieved by a fraudulent viatical settlement act.
(3) Disclosure of documents and evidence under clause (2) of this subsection does not repeal or modify the privilege granted in clause (1) of this subsection.
(f) Other law enforcement or regulatory authority.— This chapter shall not:
(1) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine and prosecute suspected violations of law;
(2) prevent or prohibit a person from disclosing voluntarily information concerning viatical settlement fraud to a law enforcement or regulatory agency other than the Office of the Insurance Commissioner, or
(3) limit the powers granted elsewhere by the laws of the Commonwealth of Puerto Rico to the Insurance Commissioner or the Antifraud Unit to investigate and examine possible violations of law and to take appropriate action against wrongdoers.
(g) Antifraud program.— Viatical settlement providers and viatical settlement brokers shall implement an antifraud program to detect, prosecute and prevent fraudulent viatical settlement acts. At the discretion of the Commissioner or upon request of an authorized person or entity, the Commissioner may order the following modifications, as necessary, to ensure an effective antifraud program. The modifications may be more or less restrictive than the required program provided they comply with the purpose of this section. The antifraud program shall include:
(1) The appointment of fraud investigators, who may be viatical settlement providers or viatical settlement brokers or employees of independent contractors, and
(2) the establishment of an antifraud plan, which shall be submitted to the Commissioner. The antifraud plan shall include, but not be limited to:
(A) A description of the procedures for detecting and investigating possible fraudulent viatical settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications;
(B) a description of the procedures for reporting possible fraudulent viatical settlement acts to the Commissioner;
(C) a description of the plan for antifraud education and training of its personnel, and
(D) a description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent viatical settlement acts, and resolve material inconsistencies between medical records and insurance applications.
(3) Antifraud plans submitted to the Commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.
History —Ins. Code, added as § 43.110 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 29.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4232/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4232 - Injunctions; cease and desist; other civil remedies
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4232 - Injunctions; cease and desist; other civil remedies
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(a) In addition to the penalties and other enforcement provisions of this chapter, if any person violates this chapter or any regulation pursuant to this chapter, the Commissioner may seek an injunction in a Court of First Instance and may apply for temporary and permanent orders that the Commissioner determines are necessary to restrain the person from committing the violation to this chapter.
(b) Any person damaged by the acts of a person in violation of this chapter may bring a civil action against the person committing the violation in a court of competent jurisdiction.
(c) The Commissioner may issue, in accordance with the Insurance Code of Puerto Rico and the Uniform Administrative Procedures Act of Puerto Rico, a cease and desist order upon a person that violates any provision of this chapter or its regulations, or of any order adopted by the Commissioner, or any written agreement entered into with the Commissioner.
(d) When the Commissioner finds that an activity in violation of this chapter presents an immediate danger to the public that requires an immediate final order, the Commissioner may issue an emergency cease and desist order itemizing in particular the facts underlying the same. The emergency cease and desist order is effective immediately upon service of a copy of the order on the respondent and remains effective for ninety (90) days. If the Commissioner initiates a permanent cease and desist proceedings, the emergency cease and desist order shall remain effect, in the absence of an order to the contrary by a court of competent jurisdiction pursuant to the Uniform Administrative Procedures Act of Puerto Rico.
(e) Any person who violates any provision of this chapter is subject to civil penalties provided in §§ 2701–2740 of this title. In addition, any person who violates any provision of this chapter shall be ordered to pay restitution to the persons aggrieved by the violation of this chapter.
(f) In addition to the penalties provided in this chapter, any person who violates any provision of this chapter may be convicted of misappropriation, fraud or any other applicable crime, pursuant to the Criminal Code of Puerto Rico. The conviction does not mean that restitution shall not be paid to the aggrieved persons.
History —Ins. Code, added as § 43.120 on Dec. 28, 2005, No. 164, § 2, eff. 90 days after Dec. 28, 2005.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4233/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4233 - Unfair trade practices and fraud
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4233 - Unfair trade practices and fraud
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A violation of this chapter shall be considered an unfair trade practice and subject to the penalties provided in §§ 2701–2740 of this title.
History —Ins. Code, added as § 43.130 on Dec. 28, 2005, No. 164, § 2, eff. 90 days after Dec. 28, 2005.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4234/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4234 - Authority to promulgate regulations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4234 - Authority to promulgate regulations
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The Commissioner shall have the authority to:
(a) Promulgate regulations within 180 days following the approval of this act.
(b) Establish standards for evaluating fairness of payments under viatical settlements for persons who are terminally or chronically ill. This authority includes, but is not limited to, regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise or bequest of a benefit under a life insurance policy.
(c) Establish appropriate licensing requirements, fees and standards to obtain and renew a license for viatical settlement providers and brokers.
(d) Require a mechanism for accountability of negligent acts to viatical settlement providers and brokers.
(e) Adopt rules governing the relationship and responsibilities of both insurers and viatical settlement providers and brokers during the viatication of a life insurance policy or certificate.
(f) Adopt rules governing the relationship and responsibilities of both viatical settlement investment providers and brokers during the purchase, sale or transfer process of viatical settlements.
History —Ins. Code, added as § 43.140 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 30; Nov. 7, 2010, No. 166, § 6, eff. 90 days after Nov. 7, 2010.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-42a/4235/
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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 42A - Viatical Settlements (§§ 4221 — 4235)›§ 4235 - Jurisdiction
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4235 - Jurisdiction
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The Office of the Insurance Commissioner of Puerto Rico shall have exclusive jurisdiction to oversee viatical settlement transactions and viatical settlement purchase contract transactions.
History —Ins. Code, added as § 43.150 on Aug. 4, 2006, No. 147, § 31; Nov. 7, 2010, No. 166, § 7, eff. 90 days after Nov. 7, 2010.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4301/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4301 - Purpose
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4301 - Purpose
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This chapter shall be known as the “International Insurers and Reinsurers Act of Puerto Rico”, which purpose is the establishment of the legal basis to develop Puerto Rico as an International Insurance Center, through which insurers and reinsurers shall export and import insurance and services related to the insurance industry. These entities shall provide insurance and consulting services exclusively in international markets and to captive entities, while entities engaged in the business of reinsurance shall provide insurance and services within Puerto Rico and abroad.
History —Ins. Code, added as § 61.010 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4302/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4302 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4302 - Definitions
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(1) Assets.— Shall include:
(a) Cash and deposits;
(b) investments, such as credit instruments or preferential debts, capital securities and of other types, tangible personal property subject to lease, mortgage loans and real property loans, securities loans, repurchase transactions, reverse repurchase transactions, dollar roll transactions and hedging strategy;
(c) declared and unpaid dividends;
(d) interest due or accrued;
(e) accounts and reinsurance receivable on paid losses and related expenses, and
(f) any other asset the Commissioner may allow by regulations.
(2) Affiliate.— Shall mean, with regard to any person, another person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the person.
(3) Fiscal year.— Means the period between January 1st and December 31st of each year.
(4) International insurer.— Means an insurer:
(a) That is organized:
(i) Under this chapter, or
(ii) under the laws of a jurisdiction other than Puerto Rico and that operates a branch in Puerto Rico in compliance with the additional requirements for the authorization of a branch established in this chapter;
(b) that, under this chapter, holds Class 1 Authority, Class 2 Authority, Class 3 Authority, Class 4 Authority or Class 5 Authority, and
(c) does not provide direct insurance on resident risks, located or to be executed in Puerto Rico, unless the international insurer has the authorization to transact surplus line insurance, pursuant to the provisions of §§ 1001–1020 of this title. Provided, That the provisions herein do not limit the authority of the international insurer to assume or accept reinsurance on resident risks, located or to be executed in Puerto Rico.
(5) Class 1 Authority.— Means the authority to transact insurance or reinsurance of all types, whether or not defined in §§ 401–405 of this title, except for disability insurance, life insurance, high limit accident insurance and property catastrophe insurance, with respect to the sole owner of the international insurer, any affiliated owner or other affiliate of the international insurer.
(6) Class 2 Authority.— Means the authority to transact all types of insurance or reinsurance, whether or not defined in §§ 401–405 of this title, except for disability insurance, life insurance, high limit accident insurance and property catastrophe reinsurance, with respect to:
(a) The risks of owners, whether affiliated or not, of the international insurer or of any of their respective affiliates;
(b) risks arising from the businesses or commercial operations of such owners or affiliates, as established by the Commissioner, or
(c) any other risk that does not exceed twenty percent (20%) of the net written premiums by the international insurer.
(7) Class 3 Authority.— Means the authority to transact all types of insurance or reinsurance, whether or not defined in §§ 401–405 of this title, with the exception of disability insurance, life insurance, high limit accident insurance or property catastrophe reinsurance.
(8) Class 4 Authority.— Means the authority to transact all types of insurance or reinsurance, whether or not defined in §§ 401–405 of this title, including high limit accident insurance and property catastrophe reinsurance, with the exception of disability reinsurance and life reinsurance.
(9) Class 5 Authority.— Means the authority to transact disability insurance, life insurance and reinsurance thereof.
(10) Control or controlled.— Means, solely and exclusively for purposes of this chapter, direct or indirect participation, as owner of more than fifty percent (50%) of the voting power with respect to the person controlled.
(11) International insurer holding company.— Shall have the meaning set forth in § 4304 of this title.
(12) Liquidity ratio.— Means the allowable ratio of liquid assets with respect to the liabilities, excluding the capital, as established in the regulations promulgated by the Commissioner.
(13) Premium ratio.— Means the allowable ratio of net written premiums to capital and surplus, as may be established in the regulations promulgated by the Commissioner.
(14) Business incidental to the insurance business.— Means activities that are incidental to the insurance business as described in § 307 of this title, with the exception of the last sentence of said section.
(15) Liabilities.— Shall include:
(a) Outstanding social capital, if any;
(b) the amount necessary to pay all its obligations and claims, whether reported or not, including loss adjustment expenses;
(c) taxes, expenses and other obligations, and
(d) reserves, including unearned premium reserves, for life insurance policy benefits and any other additional reserve that the Commissioner may require.
(16) Person.— Shall have the meaning provided in § 104 of this title.
(17) Segregated assets plan.— Means a group of assets that are identified and managed separately in an integrated manner by an international insurer with Class 2, Class 3, Class 4 and Class 5 Authority for the purpose of paying a group of obligations that are identified and managed pursuant to an operational plan previously approved by the Commissioner.
(18) Property catastrophe reinsurance.— Means the reinsurance assumed by an insurer to cover losses or damages resulting from a catastrophic event or series of events.
(19) Principal representative.— Means a person who is a resident of Puerto Rico, appointed by the international insurer and authorized by the Commissioner as such to supervise the insurance businesses and oversee that they are conducted pursuant to the provisions of this chapter and of this Code, as may apply.
(20) High limit accident insurance.— Means accident insurance, as defined in § 408 of this title, provided that the insurance policy limit exceeds ten (10) million dollars.
(21) Disability insurance.— Shall have the meaning provided in § 403 of this title.
(22) Life insurance.— Shall have the meaning provided in § 402 of this title.
(23) Branch.— Shall mean, as may apply, the business unit through which a foreign insurer not organized under this chapter carries out business transactions, or the assets and liabilities of such insurer corresponding to such business transactions, or the administrative powers corresponding to such business transactions and such assets and liabilities, or any combination thereof.
(24) Code.— Means the Insurance Code of Puerto Rico.
(25) Risk assessment.— Means an international insurer’s securities issue plan, which funds are earmarked to settle or liquidate a segregated assets plan.
History —Ins. Code, added as § 61.020 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4303/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4303 - Applicability of other laws
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4303 - Applicability of other laws
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(1) An international insurer shall be exempted from all the provisions of this Code, with the exception of those that are expressly provided in this chapter or the specific provisions referred to in this chapter.
(2) Without it being construed as a limitation, such exemption shall include the following:
(a) No international insurer shall be required to become associated with or financially contribute to any plan, consortium, association or guaranty or insolvency fund in Puerto Rico, nor shall any international insurer or insured of such insurer receive any benefit from said plan, consortium, association or guaranty or insolvency fund due to claims that arise from the operations of said insurer;
(b) no international insurer shall be required to be a member of any rating agency or to be otherwise subject to the inscription of tariff types in Puerto Rico with respect to any policy issued by said insurer, and
(c) no international insurer shall have the obligation to submit any insurance policy form or tariff plan for the approval of the Commissioner.
History —Ins. Code, added as § 61.030 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4304/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4304 - International insurer holding companies
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4304 - International insurer holding companies
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“International insurer holding company” means any legal entity organized under the laws of Puerto Rico:
(1) That holds stocks or other securities issued by an international insurer or by another international insurer holding company, and
(2) whose assets, other than such securities, consist solely of:
(a) Stock or other securities issued by insurers;
(b) securities or assets (“operational assets”) necessary for the operations of businesses incidental to the insurance business;
(c) cash, cash equivalents and investment portfolios, and
(d) other assets with an aggregate value, as shown in the financial statements of said holding company, which do not exceed five percent (5%) of the total assets of this holding company, as allowed by subsection (1) and clauses (a), (b) and (c) of this subsection.
(3) To benefit from the tax treatment granted in § 4324 of this title, an international insurer holding company shall maintain the type of assets described in subsection (2)(c) of this section, in a ratio of not more than one to one, with respect to the sum of the assets described in subsections (1), (2)(a), (2)(b) and 2(d) of this section. Provided, That the following shall be used to calculate this ratio:
(a) In the case of the stocks and other securities of the international insurer, the net equity value according to the annual report submitted to the Commissioner by the international insurer.
(b) In the case of the stocks and securities issued by other persons, the value calculated according to the generally accepted accounting principles.
(4) Should there be a surplus of assets over the ratio described in subsection (3) above, the amount necessary to comply with the ratio provided in referred subsection (3) shall be invested in the assets described in subsections (1), (2)(a) and (2)(b) of this section. The international insurer holding company shall have a term of two (2) years to make said investment, as of the date of noncompliance with such ratio.
(5) An international insurer holding company shall not control, directly or indirectly, through one or more intermediaries, any person organized under the laws of Puerto Rico, including any person engaged in businesses incidental to the insurance business and who conducts business in Puerto Rico (whether through a separate business or operating within said holding company), with the exception of international insurers, other international insurer holding companies and businesses incidental to the insurance business that provide services exclusively to international insurers to which they are related as subsidiaries or affiliates, where the term “control” shall have the meaning established in Article 6.020(15) of this Code. However, the Commissioner and the Secretary of the Treasury may jointly establish regulations and orders to allow an international insurer holding company to control, directly or indirectly, other insurers that are not international insurers, or their holding companies, including businesses incidental to the insurance business, provided that such businesses are excluded from any tax exemption granted to the international insurers and to the international insurer holding companies.
(6) An international insurer holding company shall submit a certification of any of the insurers in which the holding company maintains an interest to the Commissioner and the Secretary of the Treasury not later than the last filing date of the annual report required by § 4310 of this title. The certification shall provide the following information of the holding company: name, address, employer identification number, the value of its assets, as described in subsections (1), (2)(a), (b), (c) and (d) of this section and a statement to the effect that the company qualifies under this section as an international insurer holding company. The certification shall be sworn by the president, vice-president, treasurer, assistant treasurer or any principal officer, or by a principal partner, in the case of a partnership.
(7) If the Commissioner determines that an international insurer holding company has carried out a transaction or series of transactions the main purpose of which is to obtain assets in excess of the established limits, said entity shall not receive the tax treatment provided in § 4324 of this title.
(8) A domestic insurer duly authorized pursuant to the Code, or its holding company, that controls an international insurer or an international insurer holding company, as defined in this chapter, shall not qualify for the tax treatment granted in § 4324 of this title, with the exception of those tax exemptions related to the distributions received from an international insurer or an international insurer holding company.
History —Ins. Code, added as § 61.040 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4305/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4305 - Authorization requirements for international insurers
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4305 - Authorization requirements for international insurers
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(1) Subject to the provisions of this chapter, after the filing of an application to such effects and the payment of the corresponding fees, the Commissioner may authorize an international insurer to contract with Class 1 Authority, Class 2 Authority, Class 3 Authority, Class 4 Authority, Class 5 Authority insurance, or any combination thereof.
(2) Such international insurer shall file, or cause to be filed, a certificate of authority application to operate as such using the form prescribed by the Commissioner for such purpose with the following information, and any other information or documents that the Commissioner may require by means of regulation or order:
(a) Name, address of the main office, date of organization and, if reciprocal, the name of its attorney-in-fact, and the address of the main office of said representative in Puerto Rico;
(b) class of authority requested;
(c) copy of the determination of its board of directors or other governing body authorizing it to transact insurance in Puerto Rico and designating the officer or officers of the insurer who shall be authorized to report to the Commissioner, from time to time, with respect to the matters over which it shall act on behalf of the insurer;
(d) certified copy of its articles of incorporation duly authenticated by the office in which the original is filed;
(e) copy of its bylaws, if any, certified by its president or secretary;
(f) designation of the principal representative of the insurer, who shall reside in Puerto Rico and shall be in charge of its businesses in Puerto Rico, along with the written acceptance of the principal representative;
(g) name, address and evidence of the acceptance of the designation by the international insurer’s auditor and the actuary;
(h) in the case of a branch, the international insurer shall also file or cause to be filed, the following:
(i) Copy of the insurer’s financial statements for its most recent fiscal year;
(ii) copy of the last examination report, if any, made on the insurer, certified by the insurance supervisory officer of the domicile of the insurer;
(iii) a certificate from the insurance supervisory officer of the domicile of the insurer stating the insurance classes the insurer is authorized to transact, and
(iv) a certification, duly signed by the chief executive officer of the insurer in which the insurer accepts that it may be sued in the courts of Puerto Rico, in compliance with the requirements in § 327 of this title.
(3) When considering whether to issue an authorization to an international insurer, the Commissioner shall take into consideration whether the officers and directors of the insurer demonstrate to be reliable and competent to transact insurance business, and in so doing, he/she shall evaluate at least:
(a) Whether the officers and directors have adequate knowledge and expertise;
(b) whether the officers, administrators or any other person in charge of the insurer’s administration in Puerto Rico are qualified to carry out such activities, and
(c) whether the location, if any, that the international insurer intends to use in Puerto Rico is appropriate for conducting its business.
(4) The international insurer shall pay the Commissioner a fee for the examination, investigation and processing of its authorization application, pursuant to § 4323 of this title. The Commissioner may engage legal, financial and investigative services to evaluate the authorization application, the cost of which shall be paid by the applicant.
(5) Should the Commissioner determine that the international insurer complies with the requirements established pursuant to this chapter, the corresponding certificate of authority shall be issued, stating the Authority Class for which the insurer is authorized in Puerto Rico. In the case of a negative determination, the Commissioner shall deny the authorization within a term of not more than sixty (60) days, after the insurer has submitted a complete application, pursuant to the provisions this chapter. The Commissioner may impose other conditions with respect to a particular class of insurer.
(6) The Commissioner may, at any time, at the request of the international insurer or motu proprio, add, change or eliminate any conditions imposed pursuant to subsection (5) of this section.
(7) Before the Commissioner, pursuant to subsection (5) of this section, with respect to an international insurer, imposes a condition that said insurer had not requested, he/she shall notify the international insurer of such condition and shall take into consideration any written objection made by the insurer within the reasonable term specified in the notice.
(8) The international insurer shall have the obligation to designate and maintain a principal representative in Puerto Rico, who in turn, shall be authorized by the Commissioner.
(9) Before obtaining the authorization, the international insurer shall promptly notify the Commissioner, in writing, of any change in the information submitted as part of the authorization application, pursuant to this chapter, but in no case shall it be later than ten (10) days after becoming aware of said information.
(10) The certificate of authority of the international insurer shall expire at midnight on June 30th immediately following the date of issue or renewal. If the insurer meets the renewal requirements and pays the corresponding fees provided in this chapter, its certificate may be renewed for a term that shall not exceed one year.
(11) The Commissioner may amend a certificate of authority at any time for purposes of adjusting it to changes in the articles of incorporation of the international insurer or within his/her powers with respect to such insurer.
(12) The Commissioner may effect the dismissal of any director or officer of an international insurer, pursuant to § 326 of this title.
(13) The international insurer shall maintain in its main office an updated and accurate list of all its insurance intermediaries in Puerto Rico, and if the Commissioner so requests it in writing, it shall provide a copy thereof to the Commissioner.
(14) International insurers shall maintain their books and records pursuant to § 330 of this title.
(15) Any international insurer that conducts business not incidental to the insurance business shall establish separate accounts to segregate the assets of the insurance business from the assets of the businesses not incidental to the insurance business. Provided, That the Commissioner, by regulations, may limit the businesses not incidental to the insurance business that an international insurer may carry out.
History —Ins. Code, added as § 61.050 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4306/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4306 - Grounds for non-renewal, revocation or suspension of the certificate of authority
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4306 - Grounds for non-renewal, revocation or suspension of the certificate of authority
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(1) The Commissioner shall refuse to renew, revoke or suspend the authorization of an international insurer:
(a) If it is a branch and does not qualify or meet the requirements for such authorization.
(b) If it is an insurer organized under this chapter and ceases to cover any capital deficiency, as required by the Commissioner.
(c) If the international insurer knowingly acted beyond the powers stated in the articles of incorporation or its certificate of authority.
(2) The Commissioner may refuse to renew, revoke or suspend the authorization certificate of an international insurer if:
(a) The insurer fails to comply with or contravenes any of the provisions in this chapter, apart from the provisions with respect to which the refusal to renew, suspension or revocation is mandatory in case of noncompliance or contravention;
(b) there is failure to comply with any regulation approved pursuant to this chapter or with any order of the Commissioner, duly notified in said order, within the term granted thereto, or
(c) for any of the reasons provided in subsections (3) and (6) of § 321 of this title.
(3) An international insurer organized under the provisions of this Code, whose authorization is revoked and who maintains a solvent financial situation shall be liquidated, pursuant to the voluntary liquidation procedures provided in §§ 2948–2953 of this title, as may apply; Provided, That:
(a) The notification required by § 2948(2) of this title shall be deemed as issued on the date of the revocation of the certificate of authority.
(b) Until the certificate of dissolution provided in § 2953 of this title is submitted, the international insurer shall continue to enjoy any tax exemption conferred upon it by virtue of this chapter.
(4) Any trust constituted pursuant to the provisions of § 4318 of this title, by an international insurer that operates as a branch to which the certificate of authority is revoked and which maintains a solvent financial situation, shall be liquidated according to the procedure established in the deed of trust. Provided, That said insurer shall continue to enjoy any tax exemption conferred upon it by virtue of this chapter until the liquidation procedures provided herein are concluded.
History —Ins. Code, added as § 61.060 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4307/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4307 - Business name
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4307 - Business name
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The international insurer shall be governed by the provisions set forth in § 325 of this title, as may apply.
History —Ins. Code, added as § 61.070 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4308/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4308 - Minimum capital and surplus; deposits
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4308 - Minimum capital and surplus; deposits
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(1) No certificate of authority shall be issued to any international insurer, unless it possesses and maintains intact capital and surplus:
(a) Of not less than five hundred thousand dollars ($500,000) in the case of a Class 1 Authority insurer;
(b) of not less than seven hundred fifty thousand dollars ($750,000) in the case of a Class 2 Authority insurer;
(c) of not less than one million five hundred thousand dollars ($1,500,000) in the case of a Class 3 Authority insurer;
(d) of not less than one hundred million dollars ($100,000,000) in the case of a Class 4 Authority insurer, and
(e) in the case of a Class 5 Authority insurer, not less than seven hundred fifty thousand dollars ($750,000) of capital and surplus, in addition to the requirements for other classes of authority.
(2) With respect to the sums provided in subsection (1) of this section, the insurer shall have and maintain a minimum capital of:
(a) Not less than five hundred thousand dollars ($500,000) in the case of a Class 1, Class 2 or Class 3 Authority insurer;
(b) not less than two million dollars ($2,000,000) in the case of a Class 4 Authority insurer;
(c) in the case of a Class 5 Authority insurer, not less than seven hundred fifty thousand dollars ($750,000) of capital in addition to any other capital required for another authority class.
(3) The Commissioner may prescribe additional sums of capital and surplus according to the type, volume and nature of the insurance transactions to be carried out.
(4) The portion corresponding to capital shall be maintained in assets, as defined in this chapter. Provided, That, subject to the approval of the Commissioner, the capital may be maintained in an irrevocable letter of credit in the amount and in compliance with the requirements established by the Commissioner by rules or regulations.
(5) The portion corresponding to surplus may be held in assets as defined in this chapter or in an irrevocable letter of credit, issued by a Puerto Rico bank or a bank that is a member of the Federal Reserve System, and approved by the Commissioner. The Commissioner may establish through regulations the requirements for accepting letters of credit to be used for this purpose.
(6) In Puerto Rico, at all times, an international insurer shall maintain whichever is less among the following:
(a) The capital and surplus it is required to maintain pursuant to subsection (1) of this section, or
(b) five million dollars ($5,000,000).
History —Ins. Code, added as § 61.080 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4309/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4309 - Premium ratio; liquidity ratio
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4309 - Premium ratio; liquidity ratio
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The international insurer shall maintain, at all times, sufficient liquid assets, capital and surplus to satisfy the premium and liquidity ratios required in this chapter, and any other ratio or standard that the Commissioner may require by regulations or orders.
History —Ins. Code, added as § 61.090 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4310/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4310 - Annual report
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4310 - Annual report
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(1) The international insurer shall prepare an annual statement of its true financial condition and its business transactions at the closing of the preceding fiscal year (the annual report):
(a) The annual report shall be prepared using the generally accepted accounting principles, provided that the notes of said report include a reconciliation of the difference between the net profit and the capital and surplus as stated in the annual report filed based upon statutory accounting principles. The Commissioner may establish through regulation the statutory accounting standards that may apply to international insurers.
(b) The annual report shall be audited by an independent certified public accountant, approved by the Commissioner and shall be authenticated with the sworn statement of at least two (2) of the principal officers of the international insurer or its attorney-in-fact in the case of a reciprocal international insurer.
(2) The international insurer shall file before the Commissioner a copy of its annual report, together with the notes thereto, before the last day of the fourth month following the international insurer’s preceding fiscal year. The Commissioner may, upon presentation of a just cause, approve the filing of the annual report in a fiscal year other than the one set forth in this chapter or grant a reasonable time extension for filing the annual report.
(3) In the case of the Class 2 Authority international insurer, the annual report shall be accompanied with the opinion of an actuary with respect to the adequacy of the reserves for losses and adjustment expenses at least once every two years, beginning with the first year of operations.
(4) In the case of a Class 3 or Class 4 Authority international insurer, the annual report shall always be accompanied with the opinion of an actuary with respect to the adequacy of the reserves for losses and adjustment expenses.
(5) All Class 5 Authority international insurers shall file in the manner provided by the Commissioner, together with its annual report, its actuary’s certification of its outstanding obligations with respect to the business transacted according to its Class 5 Authority.
(6) The international insurer may keep its books and records in currency other than United States dollars, provided that its annual report is converted to its equivalent in United States dollars.
(7) All international insurers shall also be subject to the provisions set forth in § 333 of this title.
(8) The international insurer may list its reserves in the annual report on a discounted basis, with the approval of the Commissioner.
History —Ins. Code, added as § 61.100 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4311/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4311 - Investments
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4311 - Investments
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The investments of the international insurer may include, without limitation, assets, credit or preferential debt instruments, capital stock and other securities, tangible personal property subject to lease, mortgage loans and real property loans, loans on securities, repurchase transactions, reverse repurchase transactions, dollar roll transactions and hedging strategy. The Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of an international insurer.
History —Ins. Code, added as § 61.110 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4312/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4312 - Dividends
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4312 - Dividends
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(1) No international insurer shall declare or pay dividends during a given fiscal year if such declaration or disbursement should cause said insurer to fail to comply with its premium or liquidity ratio. Any international insurer that fails to comply with such ratios at the closing of a given fiscal year shall declare or pay dividends during the following fiscal year without the approval of the Commissioner.
(2) No Class 4 Authority international insurer shall pay dividends in any given fiscal year in excess of twenty-five percent (25%) of its capital and surplus, as stated in its annual report for the previous fiscal year, unless the international insurer files a sworn statement, signed by at least two (2) directors of the insurer and by its principal representative in Puerto Rico before the Commissioner at least fifteen (15) days prior to the payment of such dividends. Said sworn statement shall attest that in the opinion of the signers, the declaration of such dividends shall not cause the international insurer to fail to comply with its premium ratio or its liquidity ratio.
(3) No Class 5 Authority international insurer shall declare or pay dividends to any person that is not a policyholder, unless the value of the assets of its business conducted pursuant to its Class 5 Authority, certified as such by its actuary, exceeds the total amount of liabilities of said insurer’s business, and the total amount of said dividend does not exceed the aggregate of:
(a) Said excess amount, and
(b) any other funds that are duly available for the payment of dividends and which result from the business of the insurer that is not the business conducted pursuant to its Class 5 Authority.
History —Ins. Code, added as § 61.120 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4313/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4313 - Reinsurance
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4313 - Reinsurance
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(1) The international insurer may reinsure its risks, or any part thereof, with any insurer or other person, by contract or transaction transferring or protecting against the risk, and in such a case said contract shall be accounted for as a deduction from liabilities, pursuant to the provisions of Article 5.060(2) of this Code.
(2) Section 413 of this title shall apply to the international insurer.
History —Ins. Code, added as § 61.130 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4314/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4314 - Insolvency
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4314 - Insolvency
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The international insurer shall be subject to the provisions set forth in §§ 4001-4054 of this title, except that with respect to a Branch, only the assets in trust shall be considered as the estate of the insurer. Provided, That none of the aforementioned provisions with respect to a Branch shall be construed as a limitation on the power of the Commissioner as liquidator to establish claims against the insurer’s assets.
The protection provided by the insurance guaranty associations under §§ 3801-3819 and 3901-3918 of this title shall not apply to the international insurer, notwithstanding any reference made in §§ 4001–4054 of this title. Provided, further, That in the event of the insolvency of an international insurer, the definition of “assets” that appears in this chapter shall apply.
If a financial institution has granted financing to an international insurer, taking as guarantee or collateral securities or accounts in pledge, the liquidation of such securities or accounts by the financial institution as a set-off mutual credit in accordance with the financing contract to settle the debts of the international insurer, if it meets the requirements of § 4027(2) of this title, shall be subject to the exception provided in § 4005(5)(d) of this title with regard to the stay provided in § 4005(3) of this title.
History —Ins. Code, added as § 61.140 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004; June 20, 2011, No. 98, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4315/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4315 - Intermediaries
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4315 - Intermediaries
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No person shall act as an intermediary with respect to an international insurer, and in relation to its risks in Puerto Rico, unless said person receives prior authorization from the Commissioner, pursuant to Chapter 9 of this Code and to the provisions established by the Commissioner by rules or regulations.
History —Ins. Code, added as § 61.150 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4316/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4316 - Segregated assets plan
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4316 - Segregated assets plan
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(1) With prior approval from the Commissioner, an international insurer may establish and operate one or more segregated assets plans. The international insurer shall submit to the Commissioner, not less than sixty (60) days in advance, the operational plan it intends to use with respect to the creation and administration of a segregated assets plan. If the Commissioner does not disapprove the same within thirty (30) days, as of the date of submittal, the operational plan shall be approved; although said term may be extended by the Commissioner, if he/she thus notifies it within said thirty (30) days.
(2) The operational plan of a segregated assets plan shall at least contain the following:
(a) Business objectives.
(b) Directors, officers in charge and managers.
(c) Obligations and the identification method thereof.
(d) Plan assets and identification method therof.
(e) Investment policy with respect to the plan assets.
(f) Plan for the valuation of the liabilities, if any; Provided, That all valuation plans shall be subject to the provisions in § 2817 of this title with respect to the solicitations of Puerto Rico residents.
(3) The international insurer shall submit to the approval of the Commissioner any amendments to the operating plan made after the initial approval, not less than thirty (30) days prior to its implementation.
(4) The assets of a segregated assets plan approved by the Commissioner shall be available solely for the payment of obligations specifically identified in the corresponding operational plan and shall not be available for the payment of the obligations of other segregated assets plans or of the general obligations of the international insurer.
(5) No segregated assets plan shall be considered as an entity with a juridical personality separate from that of the international insurer for legal purposes. The approval of the Commissioner of a segregated assets plan or its subsequent amendments shall not be construed in that sense.
(6) In the case of the liquidation or rehabilitation of an international insurer under the provisions set forth in §§ 4001–4054 of this title segregated assets plan, the segregated assets plan shall not be available for the payment of the general obligations of the insurer, and on the other hand, the capital and surplus of the international insurer shall not be available for the payment of the liabilities of the segregated assets plan, except as provided in the operating plan.
(7) Assets transferred to a segregated assets plan shall not be considered as a trust.
(8) In the case of the insolvency of a segregated assets plan, the same shall be subject to the provisions of §§ 4001–4054 of this title; Provided, That the definition of “assets” that appear in this chapter shall apply.
(9) The Commissioner may promulgate rules and regulations for the creation, administration and dissolution of the segregated assets plans under conditions of solvency.
History —Ins. Code, added as § 61.160 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4317/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4317 - Principal representative
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4317 - Principal representative
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(1) If the principal representative of the international insurer determines or becomes aware of the probability of the insolvency of said insurer or that any of the event described in subsection (2) of this section have occurred, the principal representative shall notify the Commissioner thereof, in writing, within thirty (30) days, as of the date in which the principal representative made such determination or became aware of such probability.
(2) The events referred to in subsection (1) of this section and for which the notification by the principal representative is required are the following:
(a) If the international insurer:
(i) Substantially fails to comply with a condition imposed by the Commissioner with respect to the premium ratio, the liquidity ratio or any other ration of the insurer, or
(ii) fails to comply with any aspect of any other condition that is not related to such ratios.
(b) If the international insurer becomes involved in criminal proceedings in any jurisdiction.
(c) If the international insurer ceases to transact insurance.
(3) Any principal representative who fails to comply with his/her duties pursuant to this section shall incur in a violation of the provisions of this Code.
(4) The international insurer may not terminate the relationship with its principal representative without first having obtained permission to do so in writing from the Commissioner. The principal representative may not resign, unless he/she notifies the international insurer and the Commissioner in writing at least thirty (30) days in advance of the date on which such resignation shall take effect.
History —Ins. Code, added as § 61.170 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4318/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4318 - Requirements for branch operations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4318 - Requirements for branch operations
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(1) A branch shall maintain a main office in Puerto Rico.
(2) An international insurer operating through a branch in Puerto Rico shall segregate assets under a trust constituted pursuant to the laws of the Commonwealth of Puerto Rico for the benefit of all the policyholders and creditors in an amount at least equal to one hundred fifty percent (150%), or in the case of a Class 4 Authority international insurer, one hundred ten percent (110%) of the capital and surplus required to the international insurer, as required to the international insurer in § 4308 of this title. Such assets shall be considered as “assets in trust” in Puerto Rico.
(3) In Puerto Rico, a branch shall maintain, at all times, assets in trust in an amount that is equal to or less than the following:
(a) The capital and surplus that an international insurer is required to maintain pursuant to § 4308(1) of this title, and
(b) ten million dollars ($10,000,000).
(4) The fiduciary or fiduciaries of all the trusts that are established pursuant to this section shall be solvent banks or fiduciary companies, and shall be approved by the Commissioner. In no case may the fiduciary, directly or indirectly, through one or more intermediaries, control, be controlled by, or be under common control with the international insurer that establishes the branch pursuant to this chapter; Provided, That the terms “control” or “controlled” shall have the meaning provided in § 4302 of this title.
(5) The deed of trust and all its amendments shall be made according to the manner established by the Commissioner and shall contain, among others, provisions that:
(a) Confer the legal title of the assets in trust to the fiduciary or fiduciaries for the protection of all the policyholders and creditors of the branch;
(b) provide [for] the substitution with a new fiduciary or fiduciaries in the case of a vacancy due to death, resignation, or other reasons, subject to the approval of the Commissioner;
(c) require that, at all times, all the assets in trust be maintained in the trust separate and distinct from all other assets of the branch;
(d) require that the fiduciary or fiduciaries maintain a record at all times which allows the identification of the assets in trust;
(e) provide that the asset withdrawals shall be made or allowed by the fiduciary or fiduciaries, pursuant to the conditions for the distribution of dividends provided in § 4312 of this title, and
(f) establish the voluntary liquidation procedure in the case of the revocation of the certificate of authority for any reason other than insolvency.
(6) The Commissioner may, from time to time:
(a) Examine the assets in trust of any branch at the expense of the branch, and
(b) require that the fiduciary or fiduciaries submit to him/her a report in the form provided therefor by the Commissioner, certifying the assets of such trusts and the total value thereof.
(c) Refusal or negligence to comply by a fiduciary with the aforementioned requirements shall constitute grounds for the revocation of the authority of said branch or its liquidation.
(7) The aggregate value of the assets in trust of the international insurer less the net aggregate amount of its liabilities and reserves, both determined pursuant to this chapter, shall be known in Puerto Rico as the “fiduciary surplus”.
(8) Every branch shall report its financial results with respect to its assets in trust and its fiduciary surplus based on the same method and in the same manner as required of an international insurer, pursuant to § 4310 of this title.
(9) When the Commissioner determines that, based on the financial statement or report required pursuant to subsections (6) or (8) of this section, the fiduciary surplus of the branch has been reduced to less than the minimum capital and surplus required of an international insurer with authority to transact the same class of insurance pursuant to § 4308 of this title, the Commissioner:
(a) Shall determine the amount of the deficiency and direct the branch to correct said deficiency within the term established by the Commissioner, but not later than ninety (90) days as of the notification of the order, and
(b) may order the revocation or suspension of the authority of said branch.
(10) With prior presentation of the appropriate documentation, the Commissioner may recognize any group located outside of the United States, whose members are incorporated individual insurers not dedicated to any other business but the transaction of insurance as members of the group and unincorporated individual insurers as a branch of an international insurer, provided that all the members are subject to the same level of regulations regarding the solvency and control by the regulating entity of the domicile of the group.
(11) Any trust established pursuant to this section shall not be considered as a taxpayer separate from the international insurer for purposes of the Internal Revenue Code of 1994.
History —Ins. Code, added as § 61.180 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4319/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4319 - Corporate organization and powers of international insurers
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4319 - Corporate organization and powers of international insurers
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This section shall only apply to those international insurers organized under this Code.
International insurers shall organize pursuant to the provisions in §§ 2801–2810, 2901–2954 and 3301–3328 of this title, as may apply, subject to the following:
(1) It shall not be required that a minimum of the incorporators, organizers, directors, members or officers of any international insurer, as provided in §§ 2801–2810, 2901–2954 and 3301–3328 of this title, be citizens or residents of the United States or residents of Puerto Rico, unless it is so required by the articles of incorporation, the bylaws or other organizational document of the international insurer.
(2) Any meeting of the shareholders, incorporators, organizers, directors or members of the international insurer that is required to be held in Puerto Rico due to any provision in §§ 2801–2810, 2901–2954 and 3301–3328 of this title, may be held outside of Puerto Rico or via telephone, if so provided in the articles of incorporation, bylaws or other organizational document of said insurer.
(3) No incorporator, organizer, director, member or officer of an international insurer shall be prevented from being selected or acting in such capacity under any provision in §§ 2801–2810, 2901–2954 and 3301–3328 of this title solely for the reason that such person owns an interest or has any relationship with a financial firm, a securities brokerage or a business of any other type, whether as director, employee or in any other capacity.
(4) It shall not be required that any director or officer of an international insurer, due to any provision in §§ 2801–2810, 2901–2954 and 3301–3328 of this title, be a shareholder or member, in the case of a mutual insurer, of the international insurer, unless it is so required in the articles of incorporation, bylaws or any other organizational document of the international insurer.
(5) The articles of incorporation, the certificate of authority or any other statement or evidence of the authority of the international insurer shall state the class or classes of authority, as provided in § 4302 of this title, for which the international insurer is authorized, and shall not be limited by the classes of insurance defined in §§ 401–415 of this title.
(6) An international insurer that is a stock corporation may be incorporated by one or more incorporators.
(7) The par value of the stock of the international insurer may not be less than the equivalent of one dollar ($1). Provided, That, upon prior authorization from the Commissioner, the articles of incorporation may be amended to reduce the par value of the shares.
(8) The requirement of prior approval from the Commissioner established in §§ 2930 and 2931 of this title for unsecured loans and the repayment thereof shall not apply to the international insurer, but the Commissioner may impose such a requirement by regulations.
(9) Sections 2806–2817 of this title shall apply to the international insurer solely with respect to solicitation or subscriptions of Puerto Rico residents.
(10) Sections 2803, 2907(1) (last sentence), 2920(6), 2922, 2925, 2926(2), 2932, 2933(2), 2934, 2935, 2938(1) (final phrase beginning with “but not less than”), 2939(5) (the words “sections 501 through 515 of”), 2946(b) and 3307(2)(k) shall not apply to the international insurer. Provided, however, That the prohibition for officers and directors contained in § 2923 shall not apply to the international insurers, provided that the articles of incorporation, bylaws or any other organizational document provide for such transactions to be carried out.
History —Ins. Code, added as § 61.190 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4320/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4320 - Redomestication
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4320 - Redomestication
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(1) An insurer organized pursuant to the laws of a state of the United States or of any foreign jurisdiction may be converted into an international insurer organized under the laws of Puerto Rico, provided that the international insurer is organized under the provisions of this Code and merges its operations with such insurer, pursuant to the provisions in §§ 2901–2954 of this title.
(2) The international insurer organized under this Code may, upon prior authorization from the Commissioner, transfer its domicile to a state of the United States or any other foreign jurisdiction to transact insurance business; Provided, That upon carrying out such a transfer, it shall cease to be an international insurer organized in Puerto Rico, and may be authorized in Puerto Rico if it meets the requirements of a branch. The Commissioner shall approve the proposed transfer, unless he/she determines that the transfer would be contrary to the interests of the policyholders of the international insurer or the sound administration of the insurer.
(3) The certificate of authority in effect at the time in which an international insurer transfers its corporate domicile to any state of the United States or to any other foreign jurisdiction by means of a merger, consolidation or any other legal method, at the discretion of the Commissioner, shall continue to be in full force and effect while the transfer is carried out if the international insurer is duly authorized to transact insurance in the jurisdiction to which its corporate domicile is transferred. All policies of the insurer being transferred that are in effect shall remain in full force and effect and shall not have to be endorsed with the new name or location of the insurer, unless so ordered by the Commissioner. All international insurers who transfer shall notify the Commissioner in advance of the details of the transfer and shall expedite the filing of all amendments to the corporate documents filed with, or required to be filed by, the Commissioner.
(4) The Commissioner may promulgate the regulations necessary for the implementation of the purposes of this section.
History —Ins. Code, added as § 61.200 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4321/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4321 - Prohibited transactions with officers and directors
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4321 - Prohibited transactions with officers and directors
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(1) Subject to the provisions set forth in subsection (2) of this section, an international insurer may not, directly or indirectly:
(a) Grant a loan to an officer of the insurer, or the spouse or child of such director or officer, or
(b) guarantee or provide a guarantee with respect to a loan made by another person to any of the persons referred to in clause (a).
(2) None of the provisions in subsection (1) of this section, shall prohibit a loan from being:
(a) Granted on a policy issued to a person referred to in subsection (1)(a), when the amount of the loan is below the cash surrender value of a life insurance policy issued to such person by the international insurer, or
(b) guaranteed by a first mortgage, when the amount of the loan does not exceed seventy-five percent (75%) of the market value of the mortgaged property.
History —Ins. Code, added as § 61.210 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4322/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4322 - Advertising
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4322 - Advertising
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The international insurer shall be subject to the provisions set forth in § 1004 of this title.
History —Ins. Code, added as § 61.220 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4323/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4323 - Fees and charges
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4323 - Fees and charges
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The Commissioner shall collect the following fees and charges:
(1) The filing fees of an application for a certificate of authority to act as an international insurer shall be three hundred fifty dollars ($350). Furthermore, the international insurer shall pay the following certificate of authority application fees according to the authority class being applied for:
(a) Class 1 Authority: seven hundred fifty dollars ($750)
(b) Class 2 Authority: one thousand dollars ($1,000)
(c) Class 3 Authority: two thousand five hundred dollars ($2,500)
(d) Class 4 Authority: twenty-five thousand dollars ($25,000)
(e) Class 5 Authority: seven hundred fifty dollars ($750)
(2) Every international insurer shall pay, on the date of its original authorization and of each renewal, an annual charge, as provided by the Commissioner by means of rules or regulations.
History —Ins. Code, added as § 61.230 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4324/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4324 - Tax treatment
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4324 - Tax treatment
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(1) Except as provided in subsection (16) of this section, the income derived by the international insurer or by an international insurer holding company that complies with § 4304 of this title shall not be included in the gross income of such entities and shall be exempt from the taxes imposed under §§ 30011 et seq. of Title 13. Income derived by the international insurer or by an international insurer holding company that complies with § 4304 of this title by reason of the liquidation and/or dissolution of its operations in Puerto Rico shall be treated as income derived from the operations allowed under this chapter, thus shall have the same treatment, and shall not be included in the gross income of such entities.
(2) The shareholders or partners of an international insurer or an international insurer holding company that complies with § 4304 of this title shall not be subject to the income tax imposed under the Internal Revenue Code for a New Puerto Rico, as amended, nor to municipal license taxes imposed by §§ 651–651y of Title 21, known as the “Municipal License Tax Act”, with respect to distributions in total or partial liquidation of an international insurer or an international insurer holding company that complies with § 4304 of this title.
(3) The income derived from dividends and profit sharing, in the case of a partnership, distributions in total or partial liquidation, or other income items similar thereto received from an international insurer or an international insurer holding company that complies with § 4304 of this title, shall be exempt from taxation pursuant to §§ 30011 et seq. of Title 13, and from the payment of municipal license taxes imposed by §§ 651-651y of Title 21, known as the “Municipal License Tax Act”. Amounts received by a nonresident individual or a foreign corporation or partnership not engaged in trade or business in Puerto Rico as benefits or interest of any kind under a life insurance or annuity contract issued by an international insurer, shall be exempt from income taxes in accordance with §§ 30011 et seq. of Title 13, and from the payment of municipal license taxes under the Municipal License Tax Act, §§ 651-651y of Title 21.
(4) Except as provided in subsection (16) of this section, the international insurer or international insurer holding company that complies with § 4304 of this title shall not be required to file corporate, partnership, or insurance company tax returns, as provided in §§ 30242, 30243 and 30252 of Title 13. An international insurer or an international insurer holding company that complies with § 4304 of this title and is organized as a corporation of individuals, pursuant to the Internal Revenue Code for a New Puerto Rico, as amended, shall not be required to file the returns and reports required under § 30247 of Title 13. However, an international insurer holding company that complies with § 4304 of this title shall submit to the Commissioner and to the Secretary of the Treasury of Puerto Rico the Certification required under § 4304(6) of this title.
(5) The provisions of § 30278 of Title 13 that impose the requirement to deduct and withhold at the source the income tax on payments made to nonresident individuals shall not apply to an amount received on account of benefits or interests of any kind under a life insurance or annuity contract or the interest (including original issue discount, letters of credit, and other financial guarantees), dividends, partnership interest, distributions in total or partial liquidations, or other similar income items received from an international insurer or an international insurer holding company, as applicable, that complies with § 4304 of this title, provided that these individuals are not engaged in trade or business in Puerto Rico.
(6) The provisions of § 30278 of Title 13 that impose the requirement to deduct and withhold at the source the income tax on payments made for an interest attributable to alien nonresident shareholders on the income of a corporation of individuals shall not apply with respect to the attributable interest of the nonresident shareholders not engaged in trade or business in Puerto Rico, of an international insurer or an international insurer holding company that complies with § 4304 of this title.
(7) The provisions of § 30281 of Title 13 that impose the requirement to deduct and withhold at the source income tax on payments made to foreign corporations not engaged in trade or business in Puerto Rico shall not apply to the amount of any benefit or interest of any kind received under a life insurance or annuity contract or the interest (including the original issue discount, letters of credit, and other financial guarantees), dividends, partnership interest, distributions in total or partial liquidations, or other similar income items, received from an international insurer or an international insurer holding company that complies with § 4304 of this title.
(8) Income derived by an alien nonresident individual, not engaged in trade or business in Puerto Rico, on account of benefits or interest of any kind received under a life insurance or annuity contract or interest (including the original issue discount, letters of credit, and other financial guarantees), dividends, partnership interests, or other similar income items, received from an international insurer or an international insurer holding company that complies with § 4304 of this title, shall not be subject to the payment of the taxes imposed under § 30431 of Title 13.
(9) Income derived by a foreign corporation not engaged in trade or business in Puerto Rico, on account of benefits or interest of any kind received under a life insurance or annuity contract or interest (including the original issue discount, letters of credit, and other financial guarantees), dividends, partnership interest, or other similar income, received from an international insurer or an international insurer holding company that complies with § 4304 of this title, shall not be subject to the taxes imposed under § 30441 of Title 13.
(10) The income derived by an International Insurer, as defined in § 4302(4) of this title, shall not be subject to the taxes imposed under § 30442 of Title 13.
(11) None of the provisions of this section shall be construed as to limit the powers of the Secretary of the Treasury to apply the provisions of § 30179 of Title 13, to an international insurer or an international insurer holding company that complies with § 4304 of this title, or to any other person.
(12) International insurers or international insurer holding companies that comply with § 4304 of this title shall be exempted from the payment of municipal license taxes levied by §§ 651–651y of Title 21, known as the “Municipal License Tax Act”, as amended, as well as any other type of tax, assessment, fee, license, excise tax, levy and tariff, as provided in the “Autonomous Municipalities Act”, §§ 4001 et seq. of Title 21.
(13) The personal and real property that belongs to an international insurer or an international insurer holding company that complies with § 4304 of this title shall be exempted from the payment of personal and real property taxes imposed by §§ 5001 et seq. of Title 21, better known as the “Municipal Property Tax Act of 1991”, as amended.
(14) The provisions of §§ 30501-30511 of Title 13 shall not apply to international insurers.
(15) The Commissioner, along with the Secretary of Economic Development and Commerce and the Secretary of the Treasury, shall promulgate rules and regulations as necessary for the implementation of this section.
(16) Notwithstanding any provisions to the contrary in §§ 30041 et seq. of Title 13, or Subtitle A of the Internal Revenue Code of 1994, as amended, and in this Code, during each of the taxable years beginning after December 31st, 2008, and before January 1st, 2012, every international insurer and every international insurer holding company shall be subject to a special five percent (5%) tax on the amount of its net income for the taxable year, computed in accordance with the provisions of §§ 30041 et seq. of Title 13 or Subtitle A of the Internal Revenue Code of 1994, as amended, whichever applies, as amended[sic], regardless of the provisions of this Code. In addition, for each taxable year beginning after December 31st, 2011, every international insurer shall be subject to a four percent (4%) tax on the amount of its net income in excess of one million two hundred thousand dollars ($1,200,000) computed without taking into account the exemption provided in the first paragraph of this section and without including for these purposes the income from segregated asset plans that the international insurer may have established. Likewise, for each taxable year beginning after December 31st, 2011, every segregated asset plan of an international insurer other than a Class 5 Authority shall be subject to a four percent (4%) tax on the amount of its net income in excess of one million two hundred thousand dollars ($1,200,000), which shall be paid exclusively with the funds of such segregated asset plan; provided that such net income shall be computed as if the segregated asset plan were an international insurer. The Secretary of the Treasury shall prescribe by regulations, circular letter or other administrative determination or general communication, the forms or returns to be filed with respect to the aforementioned taxes; Provided, That in the case of international insurers with segregated asset plans subject to taxation, the international insurer shall report and pay the tax owed by each one of said segregated asset plans.
(17) For purposes of §§ 31001 et seq. of Title 13, the value of any amount payable by an international insurer under a life insurance or annuity contract to a Puerto Rico nonresident, shall be exempt from the taxes on estates and gifts imposed under said sections. Any stock or partnership interest certificate of a partner of an international insurer or an international insurer holding company that complies with § 4304 of this title which are owned by a Puerto Rico nonresident, and any bonds, notes, or other debt obligations of an international insurer or an international insurer holding company that complies with § 4304 of this title that are owned by a Puerto Rico nonresident, shall be exempt from the estate and gift taxes imposed under these sections.
(18) Upon issuing a certificate of authority to an international insurer, in accordance with this chapter, the Commissioner, along with the Secretary of Economic Development and Commerce, shall also issue a tax exemption decree which shall state in detail all that pertains to the tax treatment provided by the different paragraphs of this section. As a requirement to grant the decree and as provided in the regulations adopted pursuant to subsection (15) of this section, the Commissioner and the Secretary of Economic Development and Commerce may impose on the international insurer additional conditions regarding employment or economic activity. The tax exemption decree so detailed including the income tax rates provided in subsection (16) of this section, shall be considered as a contract between the international insurer, its stockholders, partners, or owners and the Government of Puerto Rico, during the effectiveness of the decree, and such contract shall be deemed to be the law between the parties. The decree shall be effective for fifteen (15) years beginning on January 1st, 2012, or on the date of issue, if later, unless such certificate of authority of the international insurer is revoked, suspended, or not renewed before the expiration thereof, in which case, the decree shall become ineffective as of the time of such revocation or non renewal, or during the suspension period, as the case may be. The decree shall not be transferrable; however, it shall not be rendered ineffective as a result of a change of control over the shares of the international insurer or due to the merger or consolidation thereof or because the international insurer converts to a stock or mutual insurer, as the case may be, as long as such change of control, merger or consolidation, or conversion is approved the Commissioner in accordance with this chapter. Any international insurer whose certificate of authority has been issued before the effective date of this act, shall be issued a decree under the same terms provided in this subsection with an effective term beginning on January 1st, 2012, and shall not be required to meet any other condition. No decree shall be issued after December 31st, 2019.
(19) Subject to the conditions or requirements prescribed by regulations pursuant to subsection (15) of this section, any international insurer holding a decree issued pursuant to subsection (18) of this section, may file an application for the renewal thereof for an additional term of fifteen (15) years with the Commissioner and the Secretary of Economic Development and Commerce. Such application shall be filed with the Commissioner not more than twenty-four (24) months or less than six (6) months before the expiration of the decree, and include the information required by Commissioner and the Secretary of Economic Development and Commerce to such purpose. Likewise, before the expiration of the renewal period, the international insurer may apply for another renewal for an additional term of fifteen (15) years.
History —Ins. Code, added as § 61.240 on Sept. 22, 2004, No. 399, § 1; Mar. 9, 2009, No. 7, § 29A; July 10, 2009, No. 37, § 20; June 20, 2011, No. 98, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4324a/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4324a - Benefits exempt from seizure
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4324a - Benefits exempt from seizure
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(1) Except as provided by subsection (3), any benefits (including the cash value and proceeds) to be provide to the owner, insured or beneficiary under a life insurance or annuity contract issued by an international insurer shall:
(a) Inure exclusively to the benefit of the person for whose use and benefit the insurance or annuity contract is designated in the contract; and
(b) Be fully exempt from and not subject to:
(i) Attachment, execution, or other seizure;
(ii) appropriation or application by any legal or equitable process or by operation of law to pay a debt or other liability of the owner, insured or beneficiary, either before or after the benefits are provided, and
(iii) a demand in a bankruptcy proceeding of the owner, insured or beneficiary.
(2) The provisions in subsection (1) shall apply regardless of whether:
(a) The power to change the beneficiary is reserved to the owner or insured; or beneficiary.
(b) The owner or insured or his/her estate is a contingent
(3) The exemptions provided in subsection (1) do not apply to:
(a) A premium payment made in fraud of a creditor, subject to the applicable statute of limitations for recovering the payment;
(b) a debt of the owner, insured or beneficiary secured by a pledge of the insurance policy or the proceeds of the policy; or
(c) a child support lien or levy established in accordance with the applicable law, or
(d) a debt of the person for whose use and benefit the insurance or annuity has been designated under the contract, if such debt has been incurred by the person after the date on which the benefit under the contract was made available for his/her use.
(4) This section does not prevent an insured, owner, or annuitant from assigning, in accordance with the terms of the life insurance or annuity contract:
(a) Any benefits to be provided under an insurance policy or annuity contract, or
(b) any other rights under the policy or contract.
(5) If an insurance or annuity contract, issued by an International Insurer prohibits a beneficiary from assigning or commuting benefits to be provided or other rights under the contract, an assignment or commutation or attempted assignment or commutation of the benefits or rights by the beneficiary is void.
History —Ins. Code, added as § 61.241 on June 20, 2011, No. 98, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4324b/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4324b - Special Fund for the Development of Services for Export
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4324b - Special Fund for the Development of Services for Export
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Ten percent (10%) of the revenues proceeding from the income tax paid by international insurers that hold a decree under this chapter shall be covered into the Special Fund for the Development of Services for Export, as created by the Act to Promote the Export of Services.
History —Ins. Code, added as § 61.242 on Jan. 17, 2012, No. 20, § 18.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4325/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4325 - Confidentiality
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4325 - Confidentiality
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(1) The information submitted to the Commissioner according to this chapter, and the regulations adopted thereunder by the Commissioner, shall be maintained confidential, except:
(a) When the disclosure of said information is required by law or court order, or
(b) by formal request from a domestic or foreign government agency in the exercise of its supervisory duties, when the Commissioner has grounds to believe that it is in the best public interest. In such cases, the information shall be provided under a binding agreement with the government agency concerned to maintain the confidential nature of said information. Provided, That this exception shall in no case be extended to information regarding the clients of the international insurer.
(c) The Commissioner may, at his/her discretion, disclose said information in all cases in which the disclosure is made for purposes of assisting the Commissioner or any other authority in the exercise of regulatory duties.
History —Ins. Code, added as § 61.250 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4326/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4326 - 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 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4326 - Powers of the Commissioner
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(1) The Division of International Insurers and Reinsurers of the Office of the Commissioner of Insurance is hereby created for purposes of the administration of the provisions [of] this chapter, under the supervision of the Commissioner.
(2) The Commissioner may establish regulations and, from time to time, amend them, as well as issue orders pertaining to international insurers as needed so that the Commissioner may properly supervise compliance with the provisions in this chapter.
(3) The Commissioner may exempt, by means of regulation or order, certain international insurers from the provisions in this chapter that the Commissioner determines as inadequate, given the nature of the risk to be insured.
(4) No business transaction shall be null or annullable for the sole reason that at the pertinent time in the transaction one of the parties fails to comply with a provision of this chapter.
(5) The international insurer shall be subject to the provisions set forth in §§ 201–232 and §§ 117 and 321a of this title, as well as all regulations promulgated thereunder.
(6) The Commissioner may establish one or more regulations, categories, or special designations to classify those international insurers that, in accordance with § 4305 of this title, have obtained an authorization to transact insurance as Class 1 Authority, Class 2 Authority, Class 3 Authority, Class 4 Authority, or Class 5 Authority, or a combination thereof, and that also meet, on a voluntary basis, the requirements or rules established under said regulations for such purposes.
History —Ins. Code, added as § 61.260 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004; June 20, 2011, No. 98, § 4.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-43/4327/
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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 43 - International Insurers and Reinsurers (§§ 4301 — 4327)›§ 4327 - Summons
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 43 - International Insurers and Reinsurers (§§ 4301 — 4327) › § 4327 - Summons
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International insurers shall be summoned pursuant to §§ 327 and 328 of this title.
History —Ins. Code, added as § 61.270 on Sept. 22, 2004, No. 399, § 1, eff. 180 days after Sept. 22, 2004.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4401/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4401 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4401 - Definitions
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As used in this chapter, the following terms shall have the meanings stated below, unless the context implies otherwise:
(a) Security holder.— A “security holder” of a specified juridical person is one who owns any security of such person, including common stock, preferred stock, debt obligations, or any other security convertible into or evidencing the right to acquire any of the foregoing.
(b) Affiliate.— An “affiliate” of, or person “affiliated” with, a specific person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
(c) Control.— The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods and nonmanagement services, or otherwise, unless the power is the result of an official position held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent (10%) or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by § 4405(k) of this title. The Commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect.
(d) Enterprise risk.— The term “enterprise risk” shall mean any activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or the insurance holding company system, including, but not limited to, the levels of risk stated in Chapter 5 of the Insurance Code of Puerto Rico and the standards for risk based capital established in Rule No. 92 of the Regulations of the Insurance Code of Puerto Rico.
(e) Insurance holding company system.— For purposes of this chapter an “insurance holding company system” consists of two (2) or more affiliated persons, one or more of which is an insurer or a health service organization.
(f) Subsidiary.— A “subsidiary” of a specified person is an affiliate controlled by such person directly or indirectly through one or more intermediaries.
(g) Person.— Means any natural person, insurer, health services organization, association, group, syndicate, body, company, corporation, partnership, trade name, trust, juridical person, or entity.
(h) Voting security.— The term “voting security” shall include any security convertible into or evidencing a right to acquire a voting security.
History —Ins. Code, added as § 44.010 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4402/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4402 - Subsidiaries of insurers or health services organizations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4402 - Subsidiaries of insurers or health services organizations
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(a) Authorization.— Insurers or health service organizations in Puerto Rico, either by themselves or in cooperation with one or more persons, may organize or acquire one or more subsidiaries. The subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of an insurer or a health service organization in Puerto Rico
(b) Additional investment authority.— In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under this chapter, insurers and health service organizations in Puerto Rico may also:
(1) Invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of ten percent (10%) of the insurer’s assets or fifty percent (50%) of the insurer’s surplus as regards policyholders, provided that after such investments, the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to meet its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries and health service organizations shall be excluded, and there shall be included:
(A) Total net monies or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities and;
(B) All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities; and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation.
(2) Invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer provided that each subsidiary agrees to limit its investments in any asset so that such investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in clause (1), as applicable to the insurer. For the purpose of this clause, “the total investment of the insurer” shall include:
(A) Any direct investment by the insurer in an asset and;
(B) The insurer’s proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary’s investment by the percentage of the ownership of the subsidiary.
(3) With the approval of the Commissioner, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries; provided that after the investment the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs.
(c) Exemption from investment restrictions.— Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to subsection (b) shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in this chapter applicable to such investments of insurers.
(d) Qualification of investment; when determined.— Whether any investment made pursuant to subsection (b) meets the applicable requirements of that subsection is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.
(e) Cessation of control.— If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within three (3) years from the time of the cessation of control or within such further time as the Commissioner may prescribe, unless at any time after the investment shall have been made, the investment shall have met the requirements for investment under any other section of this chapter, and the insurer has so notified the Commissioner.
History —Ins. Code, added as § 44.020 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4403/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4403 - Acquisition of control of or merger with domestic insurer or health service organization
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4403 - Acquisition of control of or merger with domestic insurer or health service organization
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(a) Filing requirements.—
(1) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer or health service organization if, after the consummation thereof, such person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the insurer or organization. No person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or health service organization unless, at the time the offer, request, or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, such person has filed a statement with the Commissioner confirming the information required by this section was sent to the insurer or health service organization, and the offer, request, invitation, agreement or acquisition has been approved by the Commissioner pursuant to the provisions of this chapter.
(2) For purposes of this section a “domestic insurer or health service organization” shall include any person controlling a domestic insurer or health service organization unless the person, as determined by the Commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. Nevertheless, before the acquisition, the acquiring person must also file a pre-acquisition notification with the Commissioner, sixty (60) days prior to the proposed acquisition, which shall contain the information set forth in § 4404(c) of this title. A failure to file the notification may be subject to penalties specified in § 4404(e)(3) of this title. For the purposes of this clause, “person” shall not include any securities broker holding, in the usual and customary broker’s function, less than twenty percent (20%) of the voting securities of an insurer, health service organization, or of any person which controls an insurance company.
(3) Any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer or health service organization, in any manner, shall file with the Commissioner a confidential notice of its proposed divestiture at least thirty (30) days prior to the cessation of control, unless said information has been included in the statement mentioned in clauses (1) and (2) of this subsection.
(b) Content of statement.— The statement to be filed with the Commissioner shall be made under oath or affirmation and shall contain the following:
(1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (a) of this section is to be effected (hereinafter called the “acquiring party”) and;
(A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations during the past ten (10) years;
(B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for the lesser period as the person and any predecessors shall have been in existence; an informative description of the business intended to be done by the person and the person’s subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list shall include for each individual the information required by paragraph (A).
(2) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control; a description of any transaction where funds were or are to be obtained for any such purpose including any pledge of the insurer’s stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing consideration.
(3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each acquiring party, or for such lesser period as the acquiring party and any predecessors shall have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the merger or acquisition statement.
(4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management.
(5) The number of shares of any security referred to in subsection (a) of this section which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (a) of this section, and a statement as to the method by which the fairness of the proposal was arrived at.
(6) The amount of each class of any security referred to in subsection (a) of this section, which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party.
(7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in subsection (a) of this section in which any acquiring party is involved, including, but not limited to, the transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements or understandings have been entered into.
(8) A description of the purchase of any security referred to in subsection (a) of this section during the twelve (12) calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid.
(9) A description of any recommendations to purchase any security referred to in subsection (a) of this section made during the twelve (12) calendar months preceding the filing of the statement by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party.
(10) Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (a) of this section, and if distributed, of additional soliciting material relating to them.
(11) The term of any agreement, contract, or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) of this section for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto.
(12) An acknowledgement by the person that filed the statement of acquisition, that the person and all subsidiaries within its control in the insurance holding company system will provide information to the Commissioner upon request as necessary to evaluate enterprise risk to the insurer.
(13) Such additional information as the Commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.
If the person required to file the statement referred to in subsection (a) of this section is a partnership, limited partnership, syndicate, or other group, the Commissioner may require that the information called for by clauses (1) through (13) shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member, or person is a corporation or the person required to file the statement referred to in subsection (a) of this section is a corporation, the Commissioner may require that the information called for by clauses (1) through (13) shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation.
If any material change occurs in the facts set forth in the statement filed with the Commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the Commissioner and sent to the insurer within two (2) business days after the person learns of the change.
(c) Alternative filing materials.— If any offer, request, invitation, agreement or acquisition referred to in subsection (a) of this section is proposed to be made, and it requires a similar registration or disclosure in accordance the laws of Puerto Rico, the person required to file the statement referred to in subsection (a) of this section may utilize the documents in furnishing the information called for by that statement.
(d) Approval by Commissioner: administrative hearings.—
(1) The Commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of this section unless, after a public hearing, the Commissioner finds that:
(A) After the change of control, the domestic insurer or health service organization referred to in subsection (a) of this section would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed.
(B) The effect of the merger or other acquisition of control would be substantially to lessen competition in the Puerto Rico insurance industry or tend to create a monopoly. In applying the competitive standard in this paragraph.
(i) The informational requirements of § 4404(c) of this title and the standards of § 4404(d)(2) of this title shall apply;
(ii) The merger or other acquisition shall not be disapproved if the Commissioner finds that any of the situations meeting the criteria provided by § 4404(d)(3) of this title exist; and
(iii) The Commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.
(C) The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders.
(D) The plans or proposals which the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest.
(E) The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control.
(F) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public.
(2) The public hearing referred to in clause (1) of this subsection shall be held within thirty (30) days after the statement required by subsection (a) of this section is filed, and at least twenty (20) days” notice on the date, time, and place of the hearing shall be given by the Commissioner to the person filing the statement and to any other party with an interest. Not less than fifteen (15) days” notice of the administrative hearing shall be given by the person filing the statement to the insurer or health service organization, and to such other persons as may be designated by the Commissioner.
Any person with a legitimate interest in participating in the administrative hearing proceedings may file a duly justified written request to be allowed to intervene or participate in said proceedings.
The notice and administrative hearing proceedings shall be conducted publicly and in accordance with the proceedings established in the provisions of the Commonwealth of Puerto Rico Uniform Administrative Procedures Act, §§ 2101 et seq. of Title 3. The notices regarding the administrative hearings shall be published in the webpage of the Office of the Insurance Commissioner.
At the administrative hearing, the person filing the statement, the insurer or health service organization, any person to whom notice of hearing was sent, and any other person whose interest may be affected shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments in accordance with §§ 251-254 of this title.
The Commissioner shall make a determination within the sixty (60)-day period preceding the effective date of the proposed transaction.
(3) In connection with a change of control of a domestic insurer or health service organization, any determination by the Commissioner that the person acquiring control of the insurer or health service organization shall be required to maintain or restore the capital of the insurer or organization to the level required by the laws and regulations of Puerto Rico shall be made not later than sixty (60) days after the date of notification of the change in control submitted pursuant to subsection (a)(2) of this section.
(4) The Commissioner may retain at the acquiring person’s expense any attorneys, actuaries, accountants and other experts not otherwise a part of the Commissioner’s office staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed acquisition of control.
(5) If the proposed acquisition of control or merger requires the approval of Commissioners from two or more jurisdictions, the administrative hearing may be held on a consolidated basis upon request of the person filing the statement of acquisition or merger. Such request shall be filed with the NAIC at their headquarters, and a copy given to the Commissioner, within five (5) days of filing the statement of acquisition or merger. The Commissioner shall provide notice of his/her determination within ten (10) days of the receipt of the statement.
(e) Exemptions.— The provisions of this section shall not apply to:
(1) Any offer, request, invitation, agreement, or acquisition which the Commissioner by order shall exempt as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer or health service organization, or as otherwise not comprehended within the purposes of this section.
(f) Violations.— The following shall be violations of this section:
(1) The failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b) of this section; or
(2) The effectuation or any attempt to effectuate an acquisition of control of, or merger with, a domestic insurer or health service organization unless the Commissioner has given approval.
(g) Jurisdiction, consent to service of process.— The courts of Puerto Rico are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this jurisdiction who files a statement with the Commissioner under this section, and overall actions involving such person arising out of violations of this section. It shall be understood that the person who files the statement is authorized to be served all lawful process in any action, suit, or proceeding arising out of violations of this section, in accordance with the Puerto Rico Rules of Civil Procedure.
History —Ins. Code, added as § 44.030 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4404/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4404 - Acquisitions involving other insurers and health service organizations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4404 - Acquisitions involving other insurers and health service organizations
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(a) Definitions.— The following definitions shall apply for the purposes of this section only:
(1) “Acquisition” means any agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes but is not limited to the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers.
(2) An “involved insurer or health service organization” includes an insurer or organization which either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.
(b) Scope.—
(1) Except for what is established in clause (2), the provisions of this section apply to any acquisition in which there is a change in control of an insurer or health service organization licensed to do business in Puerto Rico.
(2) This section shall not apply to the following:
(A) The acquisitions subject to approval by the Commissioner pursuant to § 4403 of this title.
(B) A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in the insurance market of Puerto Rico. If a purchase of securities results in a presumption of control under § 4401(c) of this title, it shall not be considered solely for investment purposes unless the Commissioner of the insurer or health service organization’s state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and informs the Commissioner of Insurance of Puerto Rico.
(C) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the Commissioner in accordance with subsection (c)(1) of this section, thirty (30) days prior to the proposed effective date of the acquisition. However, such pre-acquisition notification is not an exemption from complying with what is established in the remaining paragraphs of this clause.
(D) The acquisition of already affiliated persons.
(E) An acquisition if, as an immediate result of the acquisition:
(i) In no market would the combined market share of the involved insurers exceed five percent (5%) of the total market;
(ii) There would be no increase in any market share, or
(iii) In no market would
(I) The combined market share of the involved insurers exceeds twelve percent (12%) of the total market, and
(II) The market share increase by more than two percent (2%) of the total market.
For the purpose of this paragraph, a market means insurance premiums underwritten in this jurisdiction for a line of business as contained in the annual statement required to be filed by insurers and health service organizations licensed to do business in Puerto Rico.
(F) An acquisition for which a pre-acquisition notification is required pursuant to this section due solely to the resulting effect on the marine insurance.
(G) An acquisition of an insurer whose domiciliary Commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurer’s condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary Commissioner of the acquiring insurer to the Commissioner of Insurance of Puerto Rico.
(c) Pre-acquisition notification; waiting period.— An acquisition covered by subsection (b) of this section may be subject to an order pursuant to subsection (e) of this section unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The Commissioner shall give confidential treatment to information submitted under this subsection in the same manner as provided in § 4408 of this title.
(1) The pre-acquisition notification shall be in such form and contain such information as prescribed by the National Association of Insurance Commissioners (NAIC) relating to those markets which, under subsection (b)(2)(E) of this section cause the acquisition not to be exempted. The Commissioner may require such additional material and information as deemed necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d) of this section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this jurisdiction accompanied by a summary of the education and experience of such expert indicating his or her ability to render an informed opinion.
(2) The waiting period required shall begin on the date of receipt of the Commissioner of a pre-acquisition notification and shall end thirty (30) days after the date of receipt, or termination of the waiting period by the Commissioner. Prior to the end of the waiting period, the Commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end thirty (30) days after the receipt of the additional information by the Commissioner or termination of the waiting period by the Commissioner.
(d) Competitive standard.—
(1) The Commissioner may enter an order under subsection (e)(1) of this section with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in Puerto Rico or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (c) of this section.
(2) In determining whether a proposed acquisition would violate the competitive standard provided in clause (1), the Commissioner shall consider the following:
(A) Any acquisition covered under subsection (b) of this section involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standards.
(i) If the market is highly concentrated and the involved insurers possess the following shares of the market:
Insurer A Insurer B
(I) 4% 4% or more
(II) 10% 2% or more
(III) 15% 1% or more
(ii) Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:
Insurer A Insurer B
(I) 5% 5% or more
(II) 10% 4% or more
(III) 15% 3% or more
(IV) 19% 1% or more
A highly concentrated market is one in which the share of the four (4) largest insurers is seventy-five percent (75%) or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two (2) insurers or health service organizations are involved, exceeding the total of the two columns in the table is prima facie evidence of violation of the competitive standard in clause (1). For the purpose of this paragraph, the insurer with the largest share of the market shall be deemed to be Insurer A.
(B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two (2) largest to the eight (8) largest, has increased by seven percent (7%) or more of the market over a period of time extending from any base year five (5) to ten (10) years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) of this section involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in clause (1) if:
(i) There is a significant trend toward increased concentration in the market;
(ii) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and
(iii) Another involved insurer’s market is two percent (2%) or more.
(C) For the purposes of this clause:
(i) The term “insurer or health service organization” includes any company or group of companies under common management, ownership or control.
(ii) The term “market” means the relevant product and geographical markets. In determining the relevant product and geographical markets, the Commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the NAIC and to information, if any, submitted by parties of the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers and health service organizations doing business in Puerto Rico, and the relevant geographical market is assumed to be Puerto Rico.
(iii) The burden of showing prima facie evidence of violation of the competitive standard rests upon the Commissioner.
(D) Even though an acquisition is not prima facie violative of the competitive standard under paragraphs (A) and (B), the Commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under paragraphs (A) and (B), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this paragraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.
(3) An order may not be entered under subsection (e)(1) of this section if:
(A) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition.
(B) The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition.
(e) Orders and penalties.—
(1) If an acquisition violates the standards of this section, the Commissioner may enter an order:
(A) Requiring an involved insurer or health service organization to cease and desist from doing business in his/her jurisdiction with respect to the line or lines of insurance involved in the violation; or
(B) Denying the application of an acquired or acquiring insurer or health service organization for a license to do business.
(2) Any orders shall be subject to the provisions in Chapter 2 of this Code. Any order pursuant to this subsection shall not apply if the acquisition is not consummated.
(3) Any person who violates a cease and desist order of the Commissioner under clause (1) and while the order is in effect shall, after notice and hearing and upon order of the Commissioner, be subject at the discretion of the Commissioner to one or more of the following:
(A) A monetary penalty of not more than $10,000 for every day of violation; or
(B) Suspension or revocation of the person’s license.
(4) Any insurer, health service organization, or other person who fails to make any filing required by this section, and who also fails to demonstrate a good faith effort to comply with any filing requirement, shall be subject to a fine of not more than $50,000.
(f) Inapplicable provisions.— Sections 4410(b), 4410(c) and 4412 of this title do not apply to acquisitions covered under subsection (b) Of this section.
History —Ins. Code, added as § 44.040 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4405/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4405 - Registration of insurers or health service organizations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4405 - Registration of insurers or health service organizations
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(a) Registration.— Every insurer and health service organization which is authorized to do business in Puerto Rico and which is a member of an insurance holding company system shall register with the Commissioner, except a foreign insurer subject to registration requirements and standards adopted by statutes and regulations in the jurisdiction of its domicile which are substantially similar to those contained in:
(1) This section;
(2) subsections (a)(1), (b) and (d) of § 4406 of this title; and
(3) § 4406(a)(2) of this title.
(b) Information and form required.— Every insurer or health service organization subject to registration shall file the registration statement with the Commissioner on a form and in a format prescribed by the NAIC, which shall contain the following current information:
(1) The capital structure, general financial condition, ownership and management of the insurer or health service organization and any person controlling the insurer or health service organization.
(2) The identity and relationship of every member of the insurance holding company system.
(3) The following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the insurer or health service organization and its affiliates:
(A) Loans, other investments, purchases, sales, or exchanges of securities of the affiliates by the insurer or health service organization, or of the insurer or health service organization by its affiliates;
(B) Purchases, sales, or exchange of assets;
(C) Transactions not in the ordinary course of business;
(D) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer or health service organization’s assets to liability, other than insurance contracts entered into in the ordinary course of the insurer or health service organization’s business;
(E) All management agreements, service contracts, and all cost-sharing arrangements;
(F) Reinsurance agreements;
(G) Dividends and other distributions to shareholders; and
(H) Consolidated tax allocation agreements.
(4) Any pledge of the insurer’s stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system.
(5) Other matters concerning transactions between registered insurers or health service organizations and any affiliates as may be included from time to time in any registration forms adopted or approved by the Commissioner.
(6) If requested by the Commissioner, the insurer or health service organization shall include its financial statement or the financial statement of the insurance holding company system to which it forms a part of, including all affiliates. This also includes the audited financial statements filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, or the Securities Exchange Act of 1934. The person in control of the insurer or health service organization required to file financial statements may satisfy the request by providing with the most recently filed financial statements that have been filed with the U.S. Securities and Exchange Commission.
(7) The regulations, adopted and duly approved by the Board of Directors, regarding internal control procedures, supervision and monitoring of operations, and management of the insurer or health service organization’s corporation.
(8) Any other information required by the Commissioner by rule or regulation.
(c) Summary of changes to registration statement.— All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.
(d) Materiality.— No information need be disclosed on the registration statement filed pursuant to subsection (b) of this section if the information is not material for the purposes of this section. Unless the Commissioner by regulation or order provides otherwise; sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent (0.5%) or less of an insurer or health service organization’s admitted assets as of the 31st day of December next preceding shall not be deemed material for purposes of this section.
(e) Reporting of dividends to shareholders.— Subject to the provisions in § 4406(b) of this title, each registered insurer or health service organization shall report to the Commissioner all dividends and other distributions to shareholders within fifteen (15) business days following the declaration thereof.
(f) Information of insurers or health service organizations.— Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer or health service organization, where the information is reasonably necessary to enable the insurer or the health service organization to comply with the provisions of this chapter.
(g) Termination of registration.— The Commissioner shall terminate the registration of any insurer or health service organization which demonstrates that it no longer is a member of an insurance holding company system.
(h) Consolidated filing.— The Commissioner may require or allow two (2) or more affiliated insurers or health service organizations subject to registration to file a consolidated registration statement.
(i) Alternative registration.— The Commissioner may allow an insurer or health service organization which is authorized to do business in this jurisdiction and which is part of an insurance holding company system to register on behalf of any affiliated insurer or health service organization which is required to register under subsection (a) of this section and to file all information and material required to be filed under this section.
(j) Exemptions.— The provisions of this section shall not apply to any insurer or health service organization, information or transaction if and to the extent that the Commissioner by regulation or order shall exempt the same from the provisions of this section.
(k) Disclaimer of non-affiliation.— A disclaimer of non-affiliation with authorized insurers may be filed by any person, insurer, health service organization or member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the parties as well as the basis for disclaiming the non-affiliation. After filing the disclaimer, the insurer or health service organization is relieved of any duty to register or file reports under this section, which may arise out of the insurer’s relationship with such person, unless the Commissioner disallows such a disclaimer. The Commissioner shall only disallow the disclaimer of non-affiliation after furnishing all parties in interest with notice, holding a public hearing, and establishing the specific findings of fact to support such disallowance.
(l) Violations.— The failure to file a registration statement or the summary required by this Section within the time specified for filing shall be a violation of this chapter.
(m) Enterprise risk.— The ultimate controlling person of every insurer or health service organization shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person’s knowledge and belief, involve one or more persons affiliated with the insurer or health service organization that, if not remedied promptly, is likely to have an adverse effect upon the financial condition or liquidity of the insurer or the members within the insurance holding company system. The report shall be filed with the domiciliary Commissioner of the ultimate controlling person of the insurer or health service organization as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners (NAIC).
History —Ins. Code, added as § 44.050 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4406/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4406 - Standards and management of an insurer or health service organization within an insurance h...
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4406 - Standards and management of an insurer or health service organization within an insurance holding company system
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(a) Transactions within an insurance holding company system.—
(1) Transactions within an insurance holding company system, to which an insurer or health service organization subject to registration is a party, shall be subject to the following standards:
(A) The terms shall be fair and reasonable;
(B) Charges or fees for services performed shall be reasonable;
(C) Expenses incurred and payment received shall be allocated to the insurer or health service organization in conformity with customary insurance accounting practices applied;
(D) The books, accounts, and records of each party to all such transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; and
(E) The insurer or health service organization’s surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer or health service organization’s outstanding liabilities and adequate to meet its financial needs.
(2) The following transactions involving a domestic insurer or health service organization, and any person in its insurance holding company system may not be entered into unless the insurer or the health service organization has notified the Commissioner in writing of its intention to enter into the transaction at least thirty (30) days prior thereto, or such shorter period as the Commissioner may permit, and the Commissioner has not disapproved it within that period:
(A) Sales, purchases, exchanges, loans, extensions of credit, or investments, provided the transactions are equal to or exceed:
(i) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus as regards policyholders as of the 31st day of December next preceding;
(ii) With respect to life insurers, three percent (3%) of the insurer’s admitted assets as of the 31st day of December next preceding;
(B) Loans or extensions of credit to any person who is not an affiliate, where the insurer or health service organization makes loans or extensions of credit with the understanding that the proceeds of the transactions, in whole or in part, are to be used to make loans or extensions of credit to, or to purchase assets of any affiliate of the insurer or health service organization, making the loans or extensions of credit provided the transactions are equal to or exceed:
(i) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus as regards policyholders as of the 31st day of December next preceding;
(ii) With respect to life insurers, three percent (3%) of the insurer’s admitted assets as of the 31st day of December next preceding;
(C) Agreements in which the reinsurance premium or a change in the insurer’s liabilities, or the projected reinsurance premium or a change in the insurer’s liabilities in any of the next three years, equals or exceeds five percent (5%) of the insurer’s surplus as regards policyholders, as of the 31st day of December next preceding, including those agreements which may require as consideration the transfer of assets from an insurer or health service organization to a non-affiliate, if an agreement or understanding exists between the insurer and non-affiliate to such effect.
(D) All management agreements, service contracts, guarantees, and all cost-sharing arrangements.
(E) Guarantees when made by a domestic insurer or health service organization; Provided, however, That a guarantee which is quantifiable as to amount is not subject to the notice requirements of this paragraph unless it exceeds the lesser of one-half of one percent (.5%) of the insurer’s admitted assets and ten percent (10%) of surplus as regards policyholders as of the 31st day of December next preceding. Further, all guarantees not quantifiable as to amount are subject to the notice requirements of this paragraph.
(F) Direct or indirect acquisitions or investments in a person that controls the insurer or health service organization, or in an affiliate of the insurer or health service organization in an amount which, together with its present holdings in such investments, exceeds two and one-half percent (2.5%) of the insurer’s surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to § 4402 of title or under any other section of this chapter, or in non-subsidiary insurers or health service organizations affiliates that are subject to the provisions of this chapter, are exempt from this requirement; and
(G) Any material transactions, specified by regulation, which the Commissioner determines may adversely affect the interests of the insurer o health service organization’s policyholders.
Nothing in this clause shall be deemed to authorize or permit any transactions which, in the case of an insurer or health service organization not a member of the same insurance holding company system, would be otherwise contrary to law.
(3) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the insurance holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review of the transaction. If the Commissioner determines that separate transactions were entered into over any twelve (12)-month period for that purpose, the Commissioner may exercise his or her authority under § 4411 of this title.
(4) The Commissioner, in reviewing transactions pursuant to clause (2) of this subsection, shall consider whether the transactions comply with the standards set forth in clause (1) of this subsection and whether they may adversely affect the interests of policyholders.
(5) The Commissioner shall be notified within thirty (30) days of any investment of the domestic insurer or health service organization in any one corporation if the total investment in the corporation by the insurance holding company exceeds ten percent (10%) of the corporation’s voting securities.
(b) Dividends and other distributions.— No domestic insurer or health service organization shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until thirty (30) days after the Commissioner has received notice of the declaration thereof and has not within that period disapproved the payment, or until the Commissioner has approved the payment within the thirty (30)-day period.
For purposes of this subsection, an extraordinary dividend or distribution includes any dividend or distribution of cash or other assets, whose fair market value together with that of other dividends or distributions made within the preceding twelve (12) months exceeds the lesser of:
(1) Ten percent (10%) of the insurer’s surplus as regards policyholders as of the 31st day of December next preceding; or
(2) The net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the twelve (12)-month period ending the 31st day of December next preceding, but shall not include pro rata distributions of any class of the insurer’s own securities.
In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years.
Notwithstanding what is established in any other section, an insurer or health service organization may declare an extraordinary dividend or distribution which is conditional upon the Commissioner’s approval, and the declaration shall confer no rights upon shareholders until:
(1) The Commissioner has approved the payment of the dividend or distribution; or
(2) The Commissioner has not disapproved payment within the thirty-day period referred to above.
(c) Management of domestic insurers or health service organizations subject To registration.—
(1) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with the provisions of this chapter.
(2) Nothing in this section shall preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, assets, or services with one or more other persons under arrangements meeting the standards of subsection (a)(1) of this title.
(3) Not less than one-third of the directors of a domestic insurer, and not less than one-third of the members of each committee of the board of directors of any domestic insurer shall be persons who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof.
(4) The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibility for designating independent certified public accountants, reviewing the insurer’s financial statement, as well as the scope and results of independent and internal audits, nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer, and recommending to the board of directors the selection and compensation of the principal officers.
(5) The provisions of clauses (3) and (4) shall not apply to a domestic insurer if the person controlling the insurer is an insurer whose board of directors and committees thereof that meet the requirements of the aforementioned paragraphs.
(6) A domestic insurer may make application to the Commissioner for a waiver from the requirements of this section, if the insurer’s annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than three hundred million dollars ($300,000,000). In addition, an insurer may also make application to the Commissioner for a waiver based upon unique circumstances such as the type of business entity, volume of business written, availability of qualified board members, or the organizational structure of the entity, among other factors the Commissioner deems reasonable.
(d) Adequacy of surplus.— For purposes of this chapter, in determining whether an insurer’s surplus as regards policyholders is reasonable in relation to the insurer’s outstanding liabilities and adequate to meet its financial needs, the following factors, among others, shall be considered:
(1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria.
(2) The extent to which the insurer’s business is diversified among several lines of insurance.
(3) The number and size of risks insured in each line of business.
(4) The extent of the geographical dispersion of the insurer’s insured risks.
(5) The nature and extent of the insurer’s reinsurance program.
(6) The quality, diversification, and liquidity of the insurer’s investment portfolio.
(7) The recent past and projected future trend in the size of the insurer’s investment portfolio.
(8) The surplus as regards policyholders maintained by other comparable insurers.
(9) The adequacy of the insurer’s reserves and the quality and liquidity of investments in affiliates. The Commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in the judgment of the Commissioner the investment so warrants.
History —Ins. Code, added as § 44.060 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4407/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4407 - Examination
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4407 - Examination
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(a) Powers of Commissioner.— In addition to the powers which the Commissioner has under the provisions of Chapter 2 of the Insurance Code, he/she may order any insurer registered under § 4405 of this title to produce such records, books, or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to ascertain the financial condition of the insurer, subject to the limitations of this chapter. If the insurer does not comply with the order issued by the Commissioner, the Commissioner shall have the power to examine any affiliates to obtain said information.
(b) Use of consultants.— The Commissioner may retain at the registered insurer’s expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner’s staff as shall be reasonably necessary to assist in the conduct of the aforementioned examination. Any persons so retained shall be under the direction and control of the Commissioner and shall act in a purely advisory capacity.
History —Ins. Code, added as § 44.070 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4408/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4408 - Confidential treatment
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4408 - Confidential treatment
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(a) Any documents, materials, or other information in the possession or control of the Office of the Insurance Commissioner that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made pursuant to § 4407 of this title and all reports filed pursuant to §§ 4405 and 4406 of this title shall be confidential by law and privileged, shall not be subject to public inspection, or admissible in evidence in any civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner’s official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the Commissioner, after giving notice and opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication thereof, in which event the Commissioner may publish all or any part of such documents, materials, or other information in such manner as may be deemed appropriate.
(b) Neither the Commissioner nor any person who received documents, materials or other information while acting under the authority of the Commissioner shall be permitted to testify in any civil action concerning any confidential documents, materials, or information subject to subsection (a).
(c) In the performance of his/her duties, the Commissioner:
(1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (a), with other federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information.
(2) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials or information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.
(d) No waiver of any applicable privilege or claim of confidentiality in the documents materials, or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection (c).
History —Ins. Code, added as § 44.080 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4409/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4409 - Rules and regulations
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4409 - Rules and regulations
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The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules and orders as shall be necessary to carry out the provisions of this chapter.
History —Ins. Code, added as § 44.090 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4410/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4410 - Injunctions, prohibitions against voting securities, sequestration of voting securities
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4410 - Injunctions, prohibitions against voting securities, sequestration of voting securities
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(a) Injunctions.— Whenever it appears to the Commissioner that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of the provisions of this chapter or of any rule, regulation or order issued by the Commissioner hereunder, the Commissioner may apply to the corresponding court for the jurisdiction in which the principal officer of the insurer is located for an order enjoining the insurer or director, officer, employee, or agent thereof from violating or continuing to violate the provisions of this chapter or any rule or regulation and order, for such other equitable relief as the nature of the case and the interest of the insurer’s policyholders, creditors and shareholders or the public may require.
(b) Voting of securities; when prohibited.— No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this chapter or of any rule or order issued by the Commissioner hereunder may be voted at any shareholder’s meeting, or may be counted for quorum purposes. Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of the securities, unless the action would materially affect control of the insurer or unless the courts of Puerto Rico have so ordered. If an insurer or the Commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this chapter or of any rule or order issued by the Commissioner hereunder; the insurer or the Commissioner may apply to the court for the jurisdiction in which the insurer has its principle place of business to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of § 4403 of this title or any rule or order issued by the Commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders and for such other equitable relief as the nature of the case and the interest of the insurer or the public’s policyholders, creditors, and shareholders may require.
(c) Sequestration of voting securities.— In any case where a person has acquired or is proposing to acquire any voting securities in violation of this chapter or any rule or order issued by the Commissioner hereunder, the corresponding court for the jurisdiction in which the insurer has its principal place of business may, on such notice as the court deems appropriate, upon the application of the insurer or the Commissioner, seize or sequester any voting securities of the insurer owned directly or indirectly by the person, and issue such order as may be appropriate to effectuate the provisions of this chapter.
Notwithstanding any other provisions of law, for the purposes of this chapter Puerto Rico shall be deemed the situs of the ownership of the securities of domestic insurers.
History —Ins. Code, added as § 44.100 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4411/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4411 - Sanctions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4411 - Sanctions
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Any person that violates a provision of this chapter shall be subject to the penalties established in Chapters 3, 27, and 29 of the Insurance Code.
History —Ins. Code, added as § 44.110 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4412/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4412 - Receivership
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4412 - Receivership
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Whenever it appears to the Commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer or health service organization as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders or the public, then the Commissioner may proceed as provided in Chapter 40 of the Insurance Code.
History —Ins. Code, added as § 44.120 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4413/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4413 - Recovery
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4413 - Recovery
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(a) If an order for liquidation or rehabilitation of a domestic insurer or health service organization has been entered, the judicial administrator or receiver appointed under the order shall have a right to recover on behalf of the insurer:
(1) From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on its capital; or
(2) Any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, where the distribution or payment pursuant to this subsection is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c) and (d) of this section.
(b) No distribution shall be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(c) Any person who was a parent corporation or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid shall be liable up to the amount of distributions or payments under subsection (a) of this section which the person received. Any person who otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions that would have been 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 liable.
(d) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subsection (c) is insolvent or otherwise fails to pay claims due from it, its parent corporation or person who otherwise controlled it at the time the distribution was paid, shall be jointly liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.
History —Ins. Code, added as § 44.130 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-44/4414/
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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 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414)›§ 4414 - Revocation, suspension, or nonrenewal of an insurer or health service organization license
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 44 - Insurance Holding Company System Regulatory Act (§§ 4401 — 4414) › § 4414 - Revocation, suspension, or nonrenewal of an insurer or health service organization license
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Whenever it appears to the Commissioner that any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Commissioner may, after giving notice and an opportunity to be heard, suspend, revoke, or refuse to renew the insurer’s license to do business in Puerto Rico for such period as the Commissioner finds is required for the protection of policyholders or the public. The parties shall be notified of any such determination through certified mail and it shall be accompanied by specific findings of fact and conclusions of law, and the petition for review available.
History —Ins. Code, added as § 44.140 on Mar. 7, 2012, No. 51, § 1, eff. 30 days after Mar. 7, 2012.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4501/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4501 - Purpose
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4501 - Purpose
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The purpose of this chapter is to further the public welfare by regulating and overseeing the financial solvency of insurers and health maintenance organizations. To that end, this chapter provides the Commissioner, as a tool for oversight, with the standards, formulas and reports originated by the NAIC with the purpose of gauging and classifying the capital capacity of these entities to respond to the various levels of risk to which they are exposed in their respective lines of business, without the entities’ solvency becoming impaired. Furthermore, this chapter confers upon the Commissioner the authority to require that insurers take measures to protect their capital and/or reduce their risks, taking into consideration their asset and liability profile. This chapter also establishes the fundamental risk based capital requirements and provides for the levels and mechanisms for corrective action when an entity fails to maintain the necessary capital vis-à-vis its risks.
In the insurance business, it is necessary for there to be a capital surplus with respect to the capital required as risk based capital, computed as per the formulas, computation tables and instructions set forth in this chapter and in the NAIC model legislation entitled “Risk Based Capital”. Insurers shall therefore strive to maintain a capital level that surpasses the levels of risk based capital required under this chapter.
The provisions of this chapter shall be liberally interpreted in order to adequately meet its purpose.
History —Ins. Code, added as § 45.010 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4502/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4502 - Definitions
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4502 - Definitions
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For the purposes of this chapter, the following terms shall have the meaning stated below:
(1) Local insurer.— Means any entity as defined in § 301(1) of this title. This term also includes health maintenance organizations defined in § 1902(6) of this title, except in those instances in which it is indicated otherwise.
(2) Property and casualty insurer.— Means any insurer authorized to underwrite insurance defined in §§ 403, 404, 405, 406, 407, 408 and/or 409 of this title.
(3) Life or disability insurer.— Means any insurer authorized to underwrite insurance policies defined in § 402 and/or 403 of this title, or in § 1902(4) of this title. This term also includes a property and casualty insurer that only underwrites insurance policies defined in § 403 of this title.
(4) Foreign insurer.— Means any entity as defined in § 301(2) of this title. This term also includes health maintenance organizations defined in § 1902(6) of this title, except in those instances in which it is indicated otherwise.
(5) Adjusted capital.— Means the addition of:
(a) Capital plus surplus of the insurer, determined by accounting methods applicable to the annual financial statements prepared under § 331 of this title, and
(b) all other items, if any, as provided under the risk based capital instructions.
(6) Risk based capital report.— Means the report required under § 4503 of this title.
(7) Revised risk based capital report or revised report.— Means a risk based capital report that has been modified by the Commissioner pursuant to § 4503(2) of this title.
(8) Risk based capital instructions.— Means the risk based capital report adopted by the NAIC which includes the instructions, which may be amended by the NAIC pursuant to the procedures of said Association.
(9) NAIC.— Means the “National Association of Insurance Commissioners”.
(10) Risk based capital level.— Means the risk based capital level of the insurer which could require one of the following measures: action by the insurer (insurer action level); action by the regulator (regulatory action level); control of the insurer by the regulatory entity (authorized control level); and the rehabilitation or liquidation of the insurer (mandatory control level). These levels are computed as follows:
(a) Insurer action level.— Means, in respect of all insurers, the result of multiplying 2.0 by its authorized control level.
(b) Regulatory action level.— Means the result of multiplying 1.5 by its authorized control level.
(c) Authorized control level.— Means the number determined by using the risk based capital formula as per the risk based capital instructions.
(d) Mandatory control level.— Means the product of multiplying 0.70 by the authorized control level.
(11) Corrective order.— Means an order issued by the Commissioner against an insurer, whereby the Commissioner specifies the corrective action he/she deems to be necessary.
(12) Risk based capital plan.— Means a comprehensive financial plan that contains all the elements specified in § 4504(2) of this title. If the Commissioner were to reject the risk based capital plan submitted by an insurer, and for such a reason the insurer were to revise the same, regardless of whether the insurer includes the recommendations of the Commissioner or not, said plan shall be denominated as “revised risk based capital plan” or “revised plan”.
(13) Negative trend.— Means, in respect of a life or disability insurer, a negative trend during a certain term, computed on the base of the “trend test calculation”, included in the risk based capital instructions.
History —Ins. Code, added as § 45.020 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4503/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4503 - Risk based capital reports
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4503 - Risk based capital reports
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(1) By or before March 31 of every year, all local insurers shall prepare and submit before the Commissioner, a report on their risk based capital level at the close of the preceding calendar year, with such information and in such a manner as required in the risk based capital instructions. Furthermore, all local insurers shall submit their risk based capital report:
(a) Before the NAIC pursuant to the risk based capital instructions, and
(b) before the Insurance Commissioner in any state in which the insurer is authorized to underwrite insurance policies, if said Insurance Commissioner has given written notice of his/her request to the insurer, in which case the insurer shall submit its risk based capital report by or before the later date between:
(i) Fifteen (15) days as of the date of receipt of the notice of the requirement of submitting the risk based capital report before said state, or
(ii) on March 31.
(2) If the local insurer submits before the Commissioner, a risk based capital which, in the judgment of the Commissioner, is inaccurate, the Commissioner shall adjust said report to correct the deficiency and shall notify the insurer of the adjustment and the reason therefor. The report that has been so adjusted shall be denominated “revised risk based capital report” or “revised report”.
History —Ins. Code, added as § 45.030 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4504/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4504 - Insurer action level event
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4504 - Insurer action level event
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(1) An “insurer action level event” means any of the following events:
(a) The filing by an insurer of a risk-based capital report indicating that:
(i) The adjusted capital of the insurer is greater than or equal to the regulatory action level, but lesser than the insurer action level, or
(ii) if a life or disability insurer, except for health maintenance organizations; the insurer has an adjusted capital greater than or equal to the insurer action level, but less than the product of its authorized control level multiplied by 3.0 and, furthermore, a negative trend is observed.
(iii) if a property and casualty insurer, the insurer has an adjusted capital greater than or equal to the insurer action level, but less than the product of its authorized control level multiplied by 3.0 and it triggers the trend test determined in accordance with the instructions included in the Risk-Based Capital (RBC) Model Act of the National Association of Insurance Commissioners (NAIC) for property and casualty insurers.
(b) Notice by the Commissioner to the insurer of a revised risk based capital report indicating one of the events listed under clause (a) of this subsection, provided the insurer does not object the revised report under § 4508 of this title.
(c) Notice by the Commissioner to the insurer of the determination of the former against the objection to the revised risk based capital report reflecting one of the events listed under clause (a) of this subsection, presented by the insurer under § 4508 of this title.
(2) If an insurer action level event were to take place, the insurer shall prepare and submit before the Commissioner, a risk based capital plan that:
(a) Identifies the conditions which propitiated the insurer action level event;
(b) includes the corrective actions that the insurer intends to implement with the purpose of eliminating the insurer action level event;
(c) provides projections of the financing results of the insurer for the year in course and for the upcoming four (4) years, under two (2) settings—assuming that corrective actions are implemented and assuming that they are not. These projections shall also include projections in terms of requirements of capital and surplus, if any, provided in the Code. Projections for a new business as well as for a renewal may include separate projections for each main line of operation according to its annual report on the total operations and identify separately each significant component of income, expenses and profits;
(d) identifies the key assumptions that have an impact on the insurer’s projections and the extent to which these have an impact on projections, and
(e) identifies the quality of the operations of the insurer and the problems associated therewith, including but not limited to: its assets, the projected growth of the business, and the impact of such a growth on the surplus, the exposure to risks due to extraordinary events, the diversification of the lines of business, and the use of reinsurance, if any.
(3) The risk based capital plan shall be submitted:
(a) Within the term of forty-five (45) days as of the date on which the insurer action level event takes place, or
(b) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection to the revised risk based capital report submitted by the insurer under § 4508 of this title.
(4) The Commissioner shall notify the insurer within the term of sixty (60) days as of the date of submission by the insurer of the risk based capital report, if in his/her judgment said plan can be implemented or if, on the contrary, the same is unsatisfactory. In those cases in which the Commissioner determines that the risk based capital plan submitted by the insurer is not satisfactory, the Commissioner shall so notify to the insurer and state the reasons for his/her determination, and he/she may propose recommendations with the purpose of redress the deficiencies of the plan. The insurer who receives such a notice from the Commissioner shall prepare a revised risk based capital plan, into which any of the revisions proposed by the Commissioner may be incorporated by reference. The insurer shall submit said revised plan before the consideration of the Commissioner:
(a) Within the term of forty-five (45) days as of the date of notice by the Commissioner, or
(b) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection lodged by the insurer under § 4508 of this title.
(5) In those cases in which the Commissioner notifies to an insurer that the risk based capital plan or the revised plan is not satisfactory, the Commissioner, in his/her discretion and subject to the right of the insurer to object said determination under § 4508 of this title, may specify on said notice that the same constitutes a regulatory action level event.
(6) Any local insurer that submits before the Commissioner a risk based capital plan or a revised plan, shall also present a copy of such a plan before the Insurance Commissioner of the any states in which the insurer is authorized to underwrite insurance if:
(a) The state has a provision on risk based capital that is substantially similar to § 4509(1) of this title, and
(b) the Insurance Commissioner of said state has required in writing that said insurer submit said plan.
(7) In those cases in which the conditions listed in the preceding subsection (6) of this section concur, the insurer shall submit before the Commissioner of said state, a copy of the risk based capital plan or the revised plan, as pertinent, by the later date between:
(a) Fifteen (15) days as of the date of receipt of the notice whereby the Commissioner of said state requires the plan to be submitted, or
(b) the date on which the risk based capital plan or the revised plan is submitted pursuant to subsections (3) and (4) of this section.
History —Ins. Code, added as § 45.040 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008; Sept. 25, 2012, No. 266, § 1; July 24, 2013, No. 85, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4505/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4505 - Regulatory action level event
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4505 - Regulatory action level event
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(1) Regulatory action level event.— Means, in respect of all insurers, any of the following events:
(a) Submission of the insurer of a risk based capital report indicating that the adjusted capital of the insurer is greater than or equal to its authorized control level, but lesser than its regulatory action level.
(b) Notice by the Commissioner to the insurer regarding a revised risk based capital report that reflects the event described in clause (a) of this subsection, provided the insurer does not object the revised report under § 4508 of this title.
(c) Notice to the insurer by the Commissioner of his/her determination against the objection to the revised report that reflects the event described in clause (a) of this subsection, lodged by the insurer under § 4508 of this title.
(d) Failure of the insurer to submit a risk based capital report by or before the date of submission provided for in § 4503 of this title, except when the insurer has provided just cause for such failure, and the report has been indeed submitted within ten (10) days following the aforementioned date of submission.
(e) Failure of the insurer to submit before the Commissioner a risk based capital plan within the term provided in § 4504(3) of this title.
(f) Notice to the insurer by the Commissioner of the fact that the risk based capital plan or the revised plan is not satisfactory, in the judgment of the Commissioner, provided said determination has not been objected by the insurer under § 4508 of this title.
(g) Notice to the insurer by the Commissioner of his/her determination against the objection lodged by the insurer as stated in clause (f) of this subsection, and under § 4508 of this title.
(h) Notice to the insurer by the Commissioner of the fact that the latter has failed to comply with its risk based capital plan or its revised plan, but only if such noncompliance has significant and adverse effects on the ability of the insurer to eliminate the insurer action level event pursuant to the aforementioned plan, and the Commissioner has so provided in the notice. This event shall be contingent upon the non-objection of the insurer under § 4508 of this title, the determination of the Commissioner.
(i) Notice to the insurer by the Commissioner of his/her determination against the objection lodged by the insurer as stated in clause (h) of this subsection above and under § 4508 of this title.
(2) In case of a regulatory action level event, the Commissioner may:
(a) Require that the insurer prepare and submit a risk based capital plan or, if applicable, a revised plan;
(b) conduct pursuant to § 214 of this title, any investigation, as well as any examination or analysis as the Commissioner may deem pertinent, in terms of the assets, liabilities and operations of the insurer, including a revision of its risk based capital plan or its revised plan, as the case may be, and/or
(c) issue to the insurer a corrective order whereby the Commissioner specifies the corrective actions that the Commissioner deems pertinent and which the insurer must implement.
(3) In determining corrective actions, the Commissioner may take into consideration those factors he/she deems pertinent to the business of the insurer based on the investigation and/or examination or analysis conducted by the Commissioner on the assets, liabilities and operations of the insurer, including but not limited to the results of the tests, if any, undergone by the insurer pursuant to the risk based capital instructions. The risk based capital plan or the revised plan shall be submitted:
(a) Within the term of forty-five (45) days as of the date on which the regulatory action level event takes place;
(b) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection lodged regarding the revised risk based capital report submitted by the insurer under § 4508 of this title, or
(c) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection lodged concerning the revised plan submitted by the insurer under § 4508 of this title.
History —Ins. Code, added as § 45.050 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4506/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4506 - Authorized control level event
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4506 - Authorized control level event
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(1) Authorized control level event— Means any of the following events:
(a) Submission by the insurer of a risk based capital report indicating that the adjusted capital of the insurer is greater than or equal to the mandatory control level, but lesser than the authorized control level;
(b) notice by the Commissioner to the insurer concerning a revised risk based capital report indicating the event described in clause (a) of this subsection, provided the insurer has not lodged an objection to said report under § 4508 of this title;
(c) notice to the insurer by the Commissioner of his/her determination against the objection to the revised report that reflects the event described in clause (a) of this subsection, lodged by the insurer under § 4508 of this title;
(d) when the insurer fails to respond to a corrective order to the satisfaction of the Commissioner, provided the insurer has not lodged an objection to the corrective order under § 4508 of this title, or
(e) when, after the determination by the Commissioner made totally or partially against an objection to a corrective order lodged by the insurer under § 4508 of this title, the insurer, in the judgment of the Commissioner, fails to respond or to act pursuant to said corrective order.
(2) In case an authorized control level event takes place in respect of an insurer, the Commissioner may:
(a) Implement any of the measures provided for in § 4502(2) of this title, relative to regulatory action level events, or
(b) take measures as necessary in order for the insurer to be placed under regulatory control under the insurer rehabilitation and liquidation procedure provided for in §§ 4001–4054 of this title, if in the judgment of the Commissioner, this measure inures to the benefit of the policyholders, the insurer’s creditors and the general public. In case the Commissioner takes such measures, the authorized control level Event shall constitute sufficient grounds to invoke § 4009(1) of this title, which provides the grounds for practicing the rehabilitation procedure, as well as § 4014 of this title, which provides the grounds for practicing the liquidation procedure concerning an insurer. The Commissioner shall have those rights, powers and duties in respect of the insurer provided for in said §§ 4001–4054 of this title.
History —Ins. Code, added as § 45.060 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4507/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4507 - Mandatory control level event
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4507 - Mandatory control level event
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(1) A “mandatory control level event” means any of the following events:
(a) Submission of a risk based capital report indicating that the adjusted capital of the insurer is lesser than the mandatory control level;
(b) notice to the insurer by the Commissioner concerning a revised risk based capital report that indicates the event described in clause (a) of this subsection, provided said report has not been objected to by the insurer under § 4508 of this title, or
(c) notice to the insurer by the Commissioner of his/her determination against the objection to the revised report that reflects the event described in clause (a) of this subsection, lodged by the insurer under § 4508 of this title.
(2) In case a mandatory control level event takes place, the Commissioner shall take measures as necessary to exercise regulatory control over the insurer under the rehabilitation and liquidation procedure provided for in §§ 4001–4054 of this title. In the case of an insurer that is not transacting new insurance businesses in Puerto Rico, even if the insurer continues to collect premiums on policies in force on risks located in Puerto Rico, the Commissioner may allow said insurer to continue the process of releasing such policies under the supervision of the Commissioner. In any case, it shall be deemed that the mandatory control level event constitutes sufficient grounds to invoke § 4009(1) of this title, which provides the grounds for practicing the rehabilitation procedure, as well as § 4014 of this title, which provides the grounds for practicing the liquidation procedure concerning an insurer. The Commissioner shall have, in respect of the insurer, all those rights, powers and duties provided for in said §§ 4001–4054 of this title.
History —Ins. Code, added as § 45.070 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4508/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4508 - Adjudicative procedure
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4508 - Adjudicative procedure
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Under any of the following circumstances, the insurer shall be entitled to object to any determination or action taken by the Commissioner through the adjudicative procedure pursuant to the “Uniform Administrative Procedures Act”, §§ 2101 et seq. of Title 3, and the Insurance Code.
(1) When the Commissioner notifies to an insurer concerning a revised risk based capital report.
(2) When the Commissioner notifies to an insurer that:
(a) The risk based capital plan of the insurer or the revised plan is not satisfactory, and
(b) said notice constitutes a regulatory action level event against said insurer.
(3) When the Commissioner notifies to any insurer that the insurer has failed to comply with the risk based capital plan or the revised plan, which has adversely and significantly impaired the ability of the insurer to eliminate the insurer action level event.
(4) When the Commissioner notifies to the insurer of a corrective order against the insurer.
History —Ins. Code, added as § 45.080 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4509/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4509 - Confidentiality
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4509 - Confidentiality
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(1) All risk based capital plans and all corrective orders issued by the Commissioner pursuant to this chapter, or which is under the power or control of the Office of the Insurance Commissioner, shall not be open to public inspection.
(2) In order to be able to discharge his/her duties, the Commissioner:
(a) May share documents, materials or other information — including documents, materials or information not open to public inspection, as provided in subsection (1) of this section — with other Commonwealth, federal and international agencies, with the NAIC and its branches and subsidiaries, and with Commonwealth, federal and international law enforcement authorities, provided the latter do not render these open to public inspection.
(b) May receive documents, materials or information — including documents, materials or information treated by other agencies as confidential and privileged information — from the NAIC and its branches and subsidiaries and from regulatory or law enforcement officers from other foreign or local jurisdictions, and he/she shall maintain the confidentiality or the privilege of any document, material or information he/she has received whereby it is specified or construable that the same is confidential or privileged pursuant to the laws of the jurisdiction originating the document, material or information.
(3) It shall not be construed that exchanging information with or furnishing information to the Commissioner, as set forth in subsection (2) of this section, constitutes a waiver of any privilege whatsoever, or that such action alters the category of a document, material or information so as to render the same open to public inspection.
History —Ins. Code, added as § 45.090 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4510/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4510 - Rules; exemption
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4510 - Rules; exemption
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(1) The Commissioner may approve regulations as he/she deems necessary to adequately implement this chapter.
(2) The Commissioner shall have discretion, on a case-by-case basis, to exempt a local insurer from any of the provisions of this chapter, if the reason for which such insurer fails to comply with the risk based capital levels responds to compliance with other practices allowed under other provisions of the Code.
Property and casualty insurers may also be exempted if they meet the following criteria:
(a) They underwrite direct premiums only in Puerto Rico;
(b) they underwrite direct annual premiums for $2,000,000 or less, and
(c) they do not assume reinsurance greater than five percent (5%) of the annual direct premiums they have underwritten.
(3) Regulations shall establish a transition period whereby the Insurance Commissioner shall establish a staggered term, within a five (5)-year period and contingent upon the volume of premiums underwritten, for compliance with this act. Said term shall begin to transpire at the time this act is rendered effective.
History —Ins. Code, added as § 45.100 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4511/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4511 - Foreign insurers
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4511 - Foreign insurers
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(1) When the Commissioner so requests in writing, any foreign insurer shall submit before the Commissioner, a risk based capital report for the close of the preceding calendar year, by or before:
(a) The date on which, pursuant to § 4503 of this title, it is required that a local insurer submit a risk based capital report, or
(b) fifteen (15) days as of the date of notice by the Commissioner to the foreign insurer, requesting such a report.
Any foreign insurer shall, upon written request by the Commissioner, expeditiously submit before the Commissioner, a copy of any risk based capital plans submitted before the Insurance Commissioner of any other state.
(2) The Commissioner may require that the foreign insurer submit a risk based capital plan in the occurrence of an insurer action level event, a regulatory action level event, or an authorized control level event, as established in the legal provisions relative to risk based capital of the jurisdiction where the insurer is domiciled, or in its default, under the provisions of this chapter. In those cases in which the Commissioner of the jurisdiction of domicile does not so require from the foreign insurer, in contravention of the applicable legal provisions, the Commissioner may require that the foreign insurer submit a risk based capital plan. If in the judgment of the Commissioner, the foreign insurer fails to meet said requirement, such a failure shall be sufficient grounds to order the insurer to cease and desist from underwriting new policies in Puerto Rico.
(3) In the occurrence of a mandatory control level event in connection with a foreign insurer, if no liquidator has been appointed in the jurisdiction of domicile, in contravention of the legal provisions on liquidation and rehabilitation of insurers, the Commissioner may revoke the authorization of the foreign insurer.
History —Ins. Code, added as § 45.110 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4512/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4512 - Immunity
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4512 - Immunity
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Neither the Office of the Insurance Commissioner of Puerto Rico, nor the Commissioner, his/her employees, agents, or authorized representatives shall be responsible, neither in their official capacity nor in their personal capacity, nor shall any action be taken against any of the aforementioned, for reason of an action any of the aforementioned had taken while in the exercise of their powers and discharge of their duties pursuant to this chapter.
History —Ins. Code, added as § 45.120 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-1/chapter-45/4513/
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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 45 - Risk Based Capital (§§ 4501 — 4513)›§ 4513 - Notices
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4513 - Notices
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All notices remitted by the Commissioner to an insurer which may lead to regulatory action, shall take effect on the date on which the same are sent through registered or certified mail, and in the case any other means is used, the same shall take effect as soon as the insurer receives such a notice.
History —Ins. Code, added as § 45.130 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-2/chapter-49/8001/
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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 2 - Other Insurances (§§ 8001 — 8096)›Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005)›§ 8001 - Design and adoption of billing system
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 2 - Other Insurances (§§ 8001 — 8096) › Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005) › § 8001 - Design and adoption of billing system
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All insurers, health services organizations organized pursuant to §§ 1901–1927 of this title, and nonprofit organizations, organized under §§ 41 et seq. of Title 6, who underwrite health insurance services in Puerto Rico, are hereby directed to design and adopt a uniform billing system to be used by them in billing for the rendering of medical-hospital services and dispensing prescription medications.
History —Aug. 10, 1997, No. 61, § 1.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-2/chapter-49/8002/
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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 2 - Other Insurances (§§ 8001 — 8096)›Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005)›§ 8002 - Presentation and evaluation of terms
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 2 - Other Insurances (§§ 8001 — 8096) › Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005) › § 8002 - Presentation and evaluation of terms
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All insurers, health services organizations and nonprofit associations underwriting health insurance services in Puerto Rico shall design said uniform billing system in coordination with the Insurance Commissioner within a term that shall not exceed six (6) months, starting from the effective date of this act. Said system shall be presented for evaluation and approval by the Insurance Commissioner of Puerto Rico no later than thirty (30) days after being designed or after said term of six (6) months has elapsed, whichever occurs first. The Commissioner shall take the measures deemed necessary to establish said system if the insurers, health services organizations and nonprofit associations do not reach an agreement regarding the structuring of the system and do not submit the same for approval. The uniform billing system shall be put to use one year after the effectiveness of this act.
History —Aug. 10, 1997, No. 61, § 2.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-2/chapter-49/8003/
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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 2 - Other Insurances (§§ 8001 — 8096)›Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005)›§ 8003 - Prohibition
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 2 - Other Insurances (§§ 8001 — 8096) › Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005) › § 8003 - Prohibition
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As of the date in which the billing system provided herein is put to use, it shall be illegal to use any other billing form other than that created under this chapter.
History —Aug. 10, 1997, No. 61, § 3.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-2/chapter-49/8004/
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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 2 - Other Insurances (§§ 8001 — 8096)›Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005)›§ 8004 - Penalties
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 2 - Other Insurances (§§ 8001 — 8096) › Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005) › § 8004 - Penalties
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Any violation of the provisions of this chapter shall be punished with a fine of one hundred dollars ($100), and each billing form used in contravention of the provisions of this chapter shall constitute a separate violation.
History —Aug. 10, 1997, No. 61, § 4.
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https://law.justia.com/codes/puerto-rico/title-twenty-six/subtitle-2/chapter-49/8005/
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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 2 - Other Insurances (§§ 8001 — 8096)›Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005)›§ 8005 - Implementation and enforcement
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2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 2 - Other Insurances (§§ 8001 — 8096) › Chapter 49 - Health; Insurance Underwriting (§§ 8001 — 8005) › § 8005 - Implementation and enforcement
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The Insurance Commissioner shall be the official responsible for the administration, implementation and enforcement of this chapter. To such effects, it shall be understood that the provisions of §§ 101 et seq. of this title, known as the “Insurance Code of Puerto Rico,” shall be complementary to the provisions of this chapter whenever they are not incompatible.
History —Aug. 10, 1997, No. 61, § 5.
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