P.R. Laws tit. 26, § 4005
(1) An administrator appointed in a proceeding in accordance with this chapter may at any time request, and any court of general jurisdiction may issue stay orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to carry out the purposes of this chapter, to prevent among other things:
(a) The transaction of further business.
(b) The transfer of property.
(c) Interference with the receiver or with a proceeding under this chapter.
(d) Waste of the insurer’s assets.
(e) Dissipation and transfer of bank accounts.
(f) The institution or further prosecution of any actions or proceedings.
(g) The [obtainment] of preferences, judgments, attachments, garnishments of liens against the insurer, his/her assets or his/her policyholders.
(h) The levying of a writ execution against the insurer, its assets or its policyholders.
(i) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer.
(j) The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer.
(k) Any other threatened or contemplated action that might lessen the value of the insurer’s assets or prejudice the rights of the policyholders, creditors or shareholders or the administration of any proceeding under this chapter.
(2) The administrator may appear before any court, inside or outside of Puerto Rico to achieve the remedies described in subsection (1) of this section, or for the purpose of pursuing claims against any person.
(3) Except as provided by subsections (4) and (5) of this section or as otherwise provided by this chapter, the commencement of a receivership proceeding operates as a stay, applicable to any person, of:
(a) The commencement or continuation of any judicial, administrative or other proceeding against the insurer, including an arbitration or labor-management proceeding, that was or could have been commenced before the commencement of the receivership proceeding, or to procure payment of a claim that arose before the commencement of this proceeding.
(b) The enforcement against the insurer or against property of the insurer, of a judgment obtained before the commencement of the receivership proceeding.
(c) Any act to obtain or retain possession of property of the insurer or to exercise control over property or records of the insurer.
(d) Any act to collect a claim against the insurer that arose before the commencement of a receivership proceeding.
(e) The commencement or continuation of an action or proceeding against a reinsurer of the insurer, by the holder of a claim against the insurer, seeking to recover from the reinsurer the obligation due by the insurer.
(f) The commencement or continuation of any proceeding conducted by a government entity to cancel or revoke the authorization of an insurer to conduct insurance business.
(g) The termination, non-renewal, declaration of default, requirement of additional or replacement security or any other adverse action with respect to any contract, agreement or lease, including without being limited to policies, insurance and reinsurance contracts, bonds or surety undertakings, whether or not the insurer is a party to the contract, agreement, lease, policy, bond or surety undertaking, if the termination, non-renewal, declaration of default, requirement of additional or replacement security or any other adverse action is based solely on the fact that:
(i) The insurer is the subject of a receivership proceeding, and/or
(ii) one or more of the insurer’s authorization certificates have been suspended or revoked because the insurer is the subject of a receivership proceeding.
(4) The stay of the actions, as provided in this section, shall conclude ninety (90) days after the commencement of the receivership proceeding, unless for just cause, the Receivership Court orders to extend the term after notice to any affected party and hearing if deemed necessary. Provided, however, That any prescription term with respect to a claim against an insured shall be tolled during the stay and any extension as provided for in this section. No provision of this section shall affect the period of stay of the proceedings provided for in §§ 3818 and 3917 of this title, for guaranty associations to take the corresponding legal action with respect to said proceedings.
(5) Notwithstanding the provisions of subsection (3) of this subsection, the commencement of a receivership proceeding under this chapter shall not operate as a stay or prohibition of:
(a) Disciplinary actions instituted by a Commissioner of another state, including but not limited to the suspension of a license; except as established in subsection (3)(f) of this section;
(b) criminal proceedings;
(c) any act to perfect, maintain or continue an interest on a property of the insurer;
(d) setoffs as permitted by § 4027 of this title;
(e) enforcement of non-monetary government claims, judgments and proceedings;
(f) the presentment for collection of a negotiable instrument and notice of a protest proceeding;
(g) discharge by the guaranty association of the statutory responsibilities under the provisions of law applicable thereto;
(h) an audit by a government agency to determine tax liability, or
(i) a claim for any type of tax.
(6) Except as provided in subsection (8) of this section:
(a) The stay of any action against a property of the insurer as established by subsection (3) of this section, shall continue until the property is no longer a part of the estate of the insurer;
(b) The stay of any other action under subsection (3) of this section shall continue until the earlier between the following occurs:
(i) Closing of the receivership proceeding, or
(ii) Dismissal of a receivership proceeding.
(7) Notwithstanding the provisions of subsection (3), and to the extent that it is not inconsistent with § 4027 of this title, the claims against the insurer that arose before the commencement of the receivership proceeding established in this chapter, may be deemed to be counterclaims in any judicial, administrative or other action or proceeding initiated by or on behalf of the rehabilitator or liquidator against the holder of the claim.
(8) By request of an interested party and after notice and hearing, if deemed necessary by the Receivership Court, said court may grant relief from the stay provided in subsections (1) and (3) of this section by terminating, annulling, modifying, or conditioning the stay:
(a) For cause, or
(b) with respect to any stay of an act against property as established in subsection (3) of this section, if:
(i) The insurer has no interest in the property, and
(ii) the property is not necessary to establish an effective plan.
(c) For the purposes of this section, “cause” includes, but is not limited to the following situations:
(i) The rehabilitator or liquidator cancels a policy, surety bond or surety undertaking;
(ii) the creditor is entitled, by contract or by law, to require the insured party or the principal to have a policy, surety bond, or surety undertaking, and
(iii) the insured party or the principal fails to obtain a replacement policy, surety bond, or surety undertaking within the later date between the cancellation and the term allowed by contract or law.
(9) In a hearing to determine whether relief from the stay provided in subsections (1) and (3) of this section, as provided in subsection (8) of this section, is in order, the interested party shall have the burden of proof, which shall be established by clear and convincing evidence.
(10) The estate of an insurer that is injured by a willful violation of the provisions of this section, shall be entitled to actual damages caused including costs and attorney fees and in appropriate circumstances, the Receivership Court may impose additional sanctions.
(11) In relation to any stay or injunction granted by the provisions of this section, a bond shall not be required from the rehabilitator or liquidator.
History —Ins. Code, added as § 40.050 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 5.