2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 17 - Group and Blanket Disability Insurance (§§ 1701 — 1708) › § 1707 - Conversion provision

(1) A provision stipulating that if the insurance upon a person covered by the policy ceases due to the termination of his employment or condition as member of a class or classes eligible for coverage under the policy, said person is entitled to an individual disability policy issued by the insurer, without evidence of insurability; Provided, That the written application for the policy shall be made, and the first premium shall be paid to the insurer, on or before 31 days after such termination; and, Provided, further, That:
(a) The individual policy shall be at the option of such person, in whatever form is currently issued at the time by the insurer at the age and for the benefits applied for.
(b) The premium on the individual policy shall be in accordance with the insurer’s rates then in force applicable to the form and benefits of the individual policy, pursuant to the class of risk to which said person may then belong and to his age attained on the effective date of the individual policy. The health condition at the time of the person’s conversion shall not be an acceptable basis for the classification of the risk.
(c) The individual policy shall also cover the spouse and/or dependent children of the person insured if they were covered on the termination date of the group insurance. At the option of the insurer, a separate individual policy may be issued to cover the wife and/or dependent children.
(d) The individual policy shall be effective upon termination of the group policy.
(e) The insurer shall not be bound to issue an individual policy covering a person entitled to receive similar benefits under any insurance coverage or under the Medicare program of the Federal Social Security Act, as subsequently amended, if said benefits, jointly with those provided under the individual policy shall result in an overinsurance according to the insurer’s standards.
(2) A provision in the sense that if a group policy ceases or is amended in such a manner as to terminate the insurance of any category of insureds, every person included in said group policy on the date of said cessation whose insurance terminates and who has been so insured for at least three years before the date of such cessation, shall be entitled to an individual disability insurance policy issued by the insurer, subject to the same conditions and limitations provided by subsection (1) of this section, except that the group policy may provide that the benefits of said individual policy shall not be less than the benefits of the group policy.
(3) Subject to the conditions and limitations provided by subsection (1) of this section, the conversion privilege shall be granted:
(a) To the spouse and/or dependent children of the insured person, whose coverage under the group policy ceases due to the death of such person.
(b) To the spouse and/or dependent children of the person, whose coverage ceases because they do not qualify as members of the family under the group policy, even though the coverage of the insured person continues under the group policy.
(4) A provision stipulating that if a person insured under the group policy sustains a loss covered under the individual policy described in subsection (1) of this section during the period within which he would have qualified to be issued said individual policy, and before said individual policy would have become effective, the benefits which he would be entitled to under said individual policy shall be payable as a claim under the group policy, even though an individual policy has not been applied for, nor has the first premium been paid.
(5) If any individual insured under a group policy issued in Puerto Rico hereafter acquires the right to obtain an individual policy under the terms of the group policy without having insurability evidence, subject to apply for and pay the first premium within the period specified in the policy, and if that individual is not advised of the existence of that right at least 15 days before the expiration date of said period, then in such case the individual shall have an additional term during which he may exercise his right, but this in no way implies the continuation of a policy beyond the term provided therein. The additional term shall expire 15 days after the individual has been advised, but in no case shall it be extended over 60 days after the date of expiration provided in the policy. Written notice given to the individual or mailed by the policyholder to his last known address or mailed by the insurer to the last known address of the individual as underwritten by the policyholder, shall be considered notice to the effects of this paragraph. If an additional term is granted to exercise the right to convert, as herein provided, and if the written application for said individual policy together with the first premium is filed during the additional term, the effectiveness of the individual policy shall be the termination of the insurance under the group policy.
(6) This section shall apply only to group policies providing medical, surgical or hospital benefits or any combination of these benefits. Provided, That if said policy contains other benefits, the conversion privilege shall always be available for the benefits above described.
History —Ins. Code, added as § 17.070 on June 30, 1975, No. 115, p. 345, § 2; June 24, 1977, No. 112, p. 281, § 4, eff. 6 months after June 24, 1977.