P.R. Laws tit. 26, § 3913
(1) Nothing provided in this chapter shall be construed to limit the liability for the payment of unpaid assessments of the insured of an impaired or insolvent insurer who operates under an assessment plan.
(2) Records shall be kept of all negotiations and meetings in which the Association or its representatives intervene to discuss the activities of the Association in the performance of its powers and duties pursuant to § 3908 of this title. The records of said negotiations and meetings shall only be made public upon conclusion of the proceeding for liquidation, rehabilitation or conservation of an impaired or insolvent insurer, or the termination of the impairment or insolvency of the insurer or through an order from a court of competent jurisdiction. Nothing expressed in this subsection shall limit the duty of the Association to render a report of its activities pursuant to the provisions of § 3914 of this title.
(3) For the purpose of compliance with its obligations under this chapter, the Association shall be deemed as a creditor of the impaired or insolvent insurer up to the maximum of the assets attributable to covered policies reduced by any sums to which the Association is entitled by subrogation pursuant to § 3908(m) of this title. The assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue with all the covered policies and for the payment of all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies, as used in this paragraph, are that proportion of the assets which the reserves that should have been established for these policies bear to the reserves that should have been established for all insurance policies written by the impaired or insolvent insurer.
(4)
(a) Prior to the termination of any proceeding for liquidation, rehabilitation or conservation, the court, in making an equitable distribution of the property rights of the insolvent insurer, may take into consideration the interests of the respective parties, including the Association, the stockholders and policyholders of the insolvent insurer, or any other party with a bona fide interest.
On making said determination, the interests of the policy holders of the insurer who shall renew operations, or its successor shall also be taken into consideration.
(b) No distribution shall be made to the stockholders of an impaired or insolvent insurer, if any, unless the total amount of the valid claims of the Association with interest thereon, for funds used to carry out its powers and duties pursuant to § 3908 of this title with respect to such insurer, has been fully recovered by the Association.
(5)
(a) If an order has been issued for the liquidation or rehabilitation of an insurer domiciled in Puerto Rico, the Insurance Commissioner, as receiver, shall be entitled to recover, on behalf of the insurer, from any affiliate controlling him/her, the distributions, other than stock dividends paid by the insurer on his/her capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation, subject to the limitations indicated in clauses (b)–(d) of this subsection.
(b) None of said distributions shall be recoverable if the insurer shows that they were lawful and reasonable when paid, and that the insurer did not know, and could not have reasonably known that the distributions could adversely affect his/her ability to meet his/her contractual obligations.
(c) Any person who as an affiliate controlled the insurer at the time the distributions were paid shall be liable for up to the amount of the distributions he/she received. Any person who, as an affiliate, controlled the insurer at the time the distributions were declared shall be liable for up to the sum he/she would have received if they had been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum recoverable sum under this paragraph shall be that which is needed in excess of all other available assets of the insolvent insurer, for payment of his/her contractual obligations.
(e) If a person liable under clause (c) of this subsection is insolvent, all affiliates controlling his/her at the time the distribution was paid shall be jointly and severally liable for any deficiency that may result from the sums received from the insolvent affiliate.
History —Ins. Code, added as § 39.130 on Aug. 17, 1991, No. 72, § 1.