2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 3 - Puerto Rico Health Insurance Code (§§ 9001 — 10377) › Chapter 108 - Individual Health Plans and Guaranteed Availability (§§ 9161 — 9175) › § 9172 - Health Plan Issuer Association

(a)
(1) A nonprofit corporation is hereby established to be known as the “Health Plan Issuer Association”. All issuers that underwrite individual health plans and basic health plans for PYMES employers in any of its different metal levels of coverage in Puerto Rico shall be members of this Association.
(2) The Association shall be organized as a corporation under the laws of the Commonwealth, shall operate under a plan of operation, and exercise its powers through a Board of Directors established in accordance with this section.
(b) The initial Board of Directors of the Association shall consist of seven (7) members appointed by the Commissioner as indicated below:
(1) Four (4) members shall be representatives of the four (4) largest domestic issuers, based on the corresponding health plan premiums in Puerto Rico as of the calendar year ending on December 31, 2013.
(2) Three (3) members shall be representatives of the next three (3) largest issuers in Puerto Rico, excluding Medicare supplement coverage premiums. If the issuer to be represented in accordance with this clause fails to appoint a representative, the board member shall be a representative of the next largest issuer that satisfies the criteria to belong to the Board.
(3) The Commissioner shall be an ex-officio member of the Board.
(c) After the initial term, board members shall be nominated and elected by the members of the Association, except for the Commissioner.
(d) Board members may be reimbursed from moneys of the Association for expenses incurred by them in connection with their functions as members of the Board, but shall not be otherwise compensated by the Association for their services.
(e)
(1) The Association shall submit to the Commissioner, for approval, a plan of operation for the Association and any amendments to the articles of incorporation as necessary and appropriate to assure the fair, reasonable, and equitable administration of the Association.
(2) The plan shall provide for the sharing of losses in connection with individual basic health plans and basic health plans for PYMES employers, in any of its different metal levels of coverage, if any, on an equitable and proportional basis among the members of the Association that underwrite any of such plans, as appropriate.
(3)
(A) If the association fails to submit a suitable plan of operation within one hundred eighty (180) days after the appointment of the Board of Directors, the Commissioner shall adopt the plan of operation as necessary to implement this subsection.
(B) The plan of operation shall remain in effect until modified by the Commissioner or superseded by a plan submitted by the Association and approved by the Commissioner.
(4) Furthermore, the plan of operation shall include requirements for the following:
(A) The handling and accounting of assets and funds of the Association.
(B) The amount and method for reimbursing the expenses of Board members.
(C) The date and the regular times and places for meetings of the Board of Directors.
(D) The records to be kept with respect to all financial transactions and annual financial reports to be filed with the Commissioner.
(E) The procedure for selecting the Board of Directors.
(F) Additional provisions as necessary and proper for the execution of the powers and duties of the Association.
(f) The plan of operation may provide that the powers and duties of the Association may be delegated to a person who shall perform functions similar to those of the Association. A delegation of powers and duties in accordance with this subsection shall take effect only upon the approval of the Board of Directors.
(g)
(1) The Association shall have the general powers and authority established in this section, which shall be executed and, in accordance with the plan of operation approved by the Commissioner under subsection (e) of this section.
(2) In addition to the general powers and authority provided in this section and the plan of operation, the Association may:
(A) Enter into such contracts as are necessary or proper to implement this chapter;
(B) sue or be sued, which includes taking any legal action necessary or proper for recovery of any attributable loss corresponding to the members of the Association or other individual, whether on behalf of or against such member or individual;
(C) appoint legal, actuarial, and other committees from among members, to provide technical assistance in the operation of the Association, including the hiring of independent consultants, as necessary, and
(D) to perform any other functions within the authority of the Association.
(h) At the close of each calendar year, the Association, in conjunction with the Commissioner, shall require each issuer to report the amount of earned premiums and the associated paid losses for all individual basic health plans and basic health plans for PYMES employers, in any of its different metal levels of coverage that were issued by the issuer. The amounts included in such report shall be certified by an official of the issuer.
(i) The Board shall establish the procedures for collections, make assessments, and collect and make distributions, so that issuers of individual basic health plans and basic health plans for PYMES employers, in any of its different levels of coverage, receive the same ratio of paid claims to earned premiums on their individual basic health plan and basic health plans for PYMES employers assumed as the aggregate of all issuers of these type of health plans in Puerto Rico.
(j) If the island-wide aggregate ratio of paid losses to earned premiums is greater than ninety percent (90%), the dollar difference between ninety percent (90%) of earned premiums and the paid claims shall be treated as attributable loss.
(k) The attributable loss plus the necessary operating expenses for the Association, plus any additional expense as provided through regulations shall be assessed by the Association to all members in proportion to their respective shares of total individual basic health plan premiums and/or basic health plans for PYMES employers premiums received during the immediately preceding calendar year or on any other equitable method as provided in the plan of operation. In sharing losses, the Association may abate or defer any portion of the assessment of a member of the Association if, in the opinion of the Board, payment of the assessment would endanger the ability of such member to fulfill his/her contractual obligations. The Association may also provide for an initial or interim assessment against members of the Association to meet the operating expenses thereof until the next calendar year is complete.
(l) The Board shall ensure that the procedures for collecting and distributing assessments are as efficient as possible for issuers. The Board may establish procedures to combine or offset the assessment from and the distribution due to the issuer.
(m) Issuers may request the Board of the Association to seek remedy from writing a disproportionate share of individual basic health plan or health plans for PYMES employers with respect to the total premium written in Puerto Rico for health plans. If the Board determines that the issuer has written a significantly disproportionate share, the issuer may be compensated by paying an additional fee which shall not exceed two percent (2%) of earned premiums of basic health plan or health plans for PYMES employers, as appropriate for such issuer or by petitioning the Commissioner for remedy.
(n) If the Commissioner determines that the acceptance of the offer of individual basic health plan or health plan for PYMES employers of coverage by an individual pursuant to this chapter would place the issuer in a financially impaired condition, the Commissioner shall not require the issuer to offer such coverage or accept applications for the period of time the financial impairment is deemed to exist. The Commissioner may establish through policy letter the definition of “disproportionate share”.
History —Aug. 29, 2011, No. 194, added as § 10.120 on July 22, 2013, No. 69, § 1, eff. 60 days after July 22, 2013.