2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 39 - Life and Disability Insurance Guaranty Association (§§ 3901 — 3918) › § 3909 - Association—Assessments

(1) In order to provide the funds needed to execute the powers and duties of the Association, the Board of Directors shall impose on the member insurers separate assessments for each account when and for the amounts it deems necessary. The assessments shall be payable within thirty (30) days from when prior written notice was given to the member insurers and shall accrue the legal annual interest from the date in which they are due.
(2) There shall be two types of assessments as follows:
(a) Class A.— Shall be imposed to defray administrative and legal costs, as well as other expenses and the examinations conducted pursuant to § 3912(5) of this title. Class A assessments may be levied whether they are related or not to a particular impaired, or insolvent insurer.
(b) Class B.— Shall be imposed to the extent needed to execute the powers and duties of the Association pursuant to § 3908 of this title with regard to an impaired or insolvent insurer.
(3)
(a) The amount of any Class A assessment shall be determined by the Board and may be made on a pro-rated or fixed basis. If pro-rated, the Board may provide that it be credited against future Class B assessments. A fixed assessment shall not exceed one hundred and fifty dollars ($150) per member insurer in any calendar year. For the purposes of assessments, the amount of any Class B assessment shall be allocated among the accounts pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or on the basis of any other standard determined by the Board, at its discretion, as being fair and reasonable under the circumstances.
(b) Class B assessments shall be imposed against the member insurers for each account in the proportion which the premiums received from businesses in Puerto Rico by each member insurer or for policies or contracts covered by each account, for the three (3) most recent calendar years, for which information is available, preceding the year in which the insurer became impaired or insolvent, as the case may be, bear to the premiums received in Puerto Rico for said calendar years by all the member insurers on whom the assessment is imposed.
(c) Assessments shall not be imposed to provide the funds which shall be used to meet the obligations of the Association with regard to an impaired or insolvent insurer until they are needed to carry out the purposes of this chapter. The classification of assessments shall be made under subsection (2) of this section and the computation thereof under this subsection shall be made with a reasonable degree of accuracy, since an exact determination may not always be possible.
(4) The Association may reduce or defer, wholly or partially, the assessment imposed on an member insurer if, the opinion of the Board, payment thereof shall place at risk the ability of an member insurer to meet his/her contractual obligations. In case the assessment against an insurer is reduced or deferred, totally or partially, the amount by which the assessment is reduced or deferred may be distributed among the other member insurers pursuant to the method established in this section for the imposition of assessments.
(5)
(a) The total amount of all assessments imposed on a member insurer for each account, shall not exceed in any calendar year, two percent (2%) of the average premiums received in Puerto Rico on policies and contracts covered by the account for the three calendar years preceding the year in which the insurer became impaired or insolvent. If the maximum assessment, together with the other assets of the Association in any account do not provide an amount sufficient to meet the responsibilities of the Association in a given year for any of the accounts, additional assessments shall be imposed subsequently to collect the funds needed according to what is allowed in this chapter.
(b) The Board may provide in the plan of operations a method for the allocation of funds among the claims whether they are related or not to one or more impaired capital or insolvent insurers, when the maximum assessment is insufficient to cover anticipated claims.
(6) The Board, through a fair method to be established in the plan of operations, may return or reimburse to the member insurers, in proportion to the contribution of each insurer to the account, that amount by which the assets of the account exceed the amount the Board deems necessary to carry out the obligations of the Association with regard to the account in the coming year, including those assets obtained from assignments, subrogations, and net profits from income and investments. A reasonable amount may be withheld in any account to provide funds for the regular expenses of the Association and for the payment of future losses.
(7) In determining their rates and dividends for policyholders with regard to a kind of insurance within the scope of this chapter, all member insurers may take into consideration the amount that would be reasonably necessary to meet their assessment obligations under this chapter.
(8) The Association shall issue to every member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution in the form prescribed by the Commissioner, for the amount of the assessment thus paid. All existing certificates shall receive the same treatment and priority, without taking into consideration the amounts and dates of issue. The insurer may include a certificate of contribution in his/her financial statement as an asset, in the manner and for the amount, if any, and for the period of time approved by the Commissioner.
History —Ins. Code, added as § 39.090 on Aug. 17, 1991, No. 72, § 1.