P.R. Laws tit. 26, § 2930
(1) A domestic insurer, with the Commissioner’s advance approval and without the pledge of any of its assets, may borrow money to defray the expenses of his organization, provide it with surplus funds or for any purpose required by his business, upon agreement that such money and the interest thereon shall only be paid out of the insurer’s surplus in excess of that stipulated in such agreement.
(2) Money so borrowed shall not form a part of the insurer’s legal liabilities except as to its surplus in excess of the amount thereof stipulated in the loan agreement, or be the basis of any set-off; but until repaid, financial statements filed or published by the insurer shall show by a footnote thereto the amount thereof then unpaid together with any interest thereon accrued but unpaid.
(3) The loan agreement may contain other terms and conditions not inconsistent with the foregoing. It may provide for payment at the option of the insurer out of any available funds, and for payment, in event of liquidation of the insurer, out of assets remaining after payment of policy obligations but before distribution of assets to stockholders or members. The form and terms of the loan agreement shall be subject to the Commissioner’s approval.
(4) If the money is to be borrowed upon multiple agreements, the agreements shall be serially numbered. No loan agreement or series thereof shall have or be given any preferential rights over any other such loan agreement or series.
(5) This section shall not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, or to loans secured by pledge of assets.
History —Ins. Code § 29.300; Feb. 16, 1979, No. 15, p. 28, § 13.