P.R. Laws tit. 26, § 4318
(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.