2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 3 - Authorization of Insurers and General Requirements (§§ 301 — 335) › § 304-1 - Affiliation to financial institutions prohibited

(1) In addition to the requirements established in § 304 of this title, an insurer must comply with the following, in order to be authorized to contract insurance in Puerto Rico:
(a) That any one or more of the financial institutions described in subsection (4) of this section shall not have any direct or indirect substantial financial interest or control over the insurer.
(b) That said insurer shall not have any direct or indirect substantial financial interest, or relationship as the owner or affiliate of a financial institution as defined in subsection (4) of this section.
(2) An insurer who otherwise meets the requirements as such, but who has any of the relationships indicated in subsection (1) of this section with an entity engaged in the money-lending business in Puerto Rico, which is not one of the financial institutions defined in subsection (4) of this section, may be authorized to contract or process insurance policies in Puerto Rico, provided the following requirements are met:
(a) The insurer does not contract credit life insurance, credit disability insurance, or any other insurance business related to a specific loan or other credit transaction. Nor shall the insurer carry out, directly or indirectly, any insurance, reinsurance, insurance business exchange or subscription agreement, or any other transaction of such nature on an object, subject or exposure of insurance resulting from or related to the credit activity generated by said entity. To such effects, the Commissioner shall be authorized to limit the scope of the certificate of authority he issues to said insurer.
(b) Said entity shall not select, whether directly or indirectly, the insurer that shall underwrite the objects, subjects or exposures of insurance that arise from or are related to the credit activity generated by said entity, nor shall it induce the potential insured directly or indirectly, to select such insurer, nor carry out any business transaction that may place the insurer in a position of competitive advantage with regard to an object, subject or exposure to insurance arising from, or related to the credit activity generated by said entity.
(3) The Commissioner shall promulgate rules and regulations to strictly enforce the purposes of this section, which include, among others, to keep the money-lending business in Puerto Rico apart from the insurance business, and to limit the possibility of unfair practices by insurers related to lending institutions, in order to attain a healthy competition for the protection of the consumers of insurance and their right to freely select an insurer, producer, and in order to guarantee a healthy balance of opportunities for all the components of the insurance industry in Puerto Rico.
(4) Financial institution.— Means any bank, savings and loan association, institution engaged in the business of receiving deposits and lending money in Puerto Rico, and any entity or corporation in which any of said institutions has any direct or indirect substantial financial interest or relationship as an owner, subsidiary or affiliate, or any entity or corporation that directly or indirectly owns a substantial financial interest in any of said institutions.
(5) Substantial financial interest.— Means holding more than five percent (5%) of any type of outstanding stock or combination thereof.
(6) None of the provisions of this section shall prohibit or prevent an insurer, who otherwise meets the requirements as such, from being authorized to contract insurance in Puerto Rico because said insurer:
(a) Has, directly or indirectly, a substantial financial interest in a financial holding company or a depository institution or a direct or indirect relationship as owner, subsidiary or affiliate with a financial holding company or with a depository institution regardless of whether the holding company or depository institution has, directly or indirectly, a relationship as owner, subsidiary or affiliate of other non-depository institutions engaged in the business of lending money, provided that the applicable provisions and requirements of the Gramm-Leach-Bliley Act and the laws of Puerto Rico are complied with;
(b) is a financial holding company, provided that the applicable provisions and requirements of the Gramm-Leach-Bliley Act are complied with.
(7) For the purposes of subsection (6) of this section and §§ 307, 320, 412, Articles 6.050, 9.070 and 9.160, and § § 2713a, 2915, 2920 and 2921 of this title, the following terms shall have the meaning stated below:
(a) Gramm-Leach-Bliley Act.— Means the Federal law entitled “Gramm-Leach-Bliley Financial Modernization Act of 1999”, Public Law No. 106-102, 113 Stat. 1338 (1999), as amended.
(b) The term “depository institution” shall be limited to those institutions included under the term “depository institution”, pursuant to Section 104(g)(3) of the Gramm-Leach-Bliley Act.
(c) The term “financial holding company” shall be limited to those institutions included under the term “financial holding company”, pursuant to Section 103(p) of the Gramm-Leach-Bliley Act.
(8) The Commissioner may establish the rules and regulations to assure that the application of the provisions of subsection (6) of this section are not in conflict with the provisions of the Gramm-Leach-Bliley Act.
History —Ins. Code, added as § 3.041 on Mar. 6, 1995 No. 28, § 2; Sept. 6, 2000, No. 382, § 1; Jan. 19, 2006, No. 10, § 9; renumbered as § 3.031 on Dec. 21, 2010, No. 210, § 2, eff. 90 days after Dec. 21, 2010.