2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 6B - Investments (§§ 648 — 662) › § 659 - Foreign investments and foreign currency

(1) Subject to the limitations stated in § 653 of this title, an insurer may acquire foreign investments of substantially the same nature as those allowed to be acquired by an insurer under §§ 648–662 of this title, if as a result of such acquisition:
(a) The sum total of the foreign investments held at a given moment by the insurer does not exceed twenty percent (20%) of its allowed assets, and
(b) the sum total of the foreign investments held at a given moment by the insurer in one single foreign jurisdiction does not exceed five percent (5%) of its allowed assets or ten percent (10%) of its capital and surplus, whichever is less, in jurisdictions with a debt rating of 1 by the SVO, or does not exceed three percent (3%) of its allowed assets or five percent (5%) of its capital and surplus, whichever is less, in any other foreign jurisdiction.
(2) Subject to the limitation indicated in § 653 of this title, an insurer may acquire investments or be involved in investment practices denominated in foreign currency, whether or not they are foreign investments acquired under subsection (1) of this section, or have additional exposure to foreign currency as a result of the conclusion or expiration of a hedge transaction with regard to investments in foreign currency denomination, if:
(a) The sum total of the investments held at a given moment by the insurer denominated in foreign currency under this subsection does not exceed five percent (5%) of its allowed assets or ten percent (10%) of its capital and surplus, whichever is less, and
(b) the sum total of the investments held by the insurer at a given moment in foreign currency denominations of a single foreign jurisdiction does not exceed five percent (5%) of its allowed assets or ten percent (10%) of its capital and surplus, whichever is less, in jurisdictions with a debt rating of one (1) by the SVO, or does not exceed three percent (3%) of its allowed assets or five percent (5%) of its capital and surplus, whichever is less, in all other jurisdictions.
(c) However, an investment shall not be deemed to be in foreign currency if the insurer acquiring the same enters into one or more contracts which include transactions allowed under § 660 of this title and the counterpart business entity agrees under such contracts or contracts to change all payments made in foreign currency investments into United States currency at a rate that effectively protects the cash flow of the insurer from fluctuations in the currency exchange rates during the life of the contract.
(3) In addition to the investments allowed under subsections (1) and (2) of this section, an insurer who is not authorized to do business in a foreign jurisdiction, but has pending life or risk insurance policies, annuities or reinsurance contracts located in a foreign jurisdiction and denominated in foreign currency, may acquire investments denominated in the foreign currency of the jurisdiction, subject to the limitations described in § 653 of this title. However, no investments made under this subsection in obligations of foreign governments, their political subdivisions and enterprises sponsored by said governments shall be subject to the limitations described in § 653 of this title if said investments are rated 1 or 2 by the SVO. The sum total of foreign investments acquired by the insurer under this subsection shall not exceed whichever is greater of:
(a) The amount that the law of such foreign jurisdiction requires the insurer invests in said jurisdiction, or
(b) one hundred fifteen percent (115%) of the amount of its reserves, reinsurance net and other obligations, under life or risk contracts located in the foreign jurisdiction.
(4) In addition to the investments allowed under subsections (1) and (2) of this section, an insurer not authorized to do business in a foreign jurisdiction, but who has pending life or risk insurance, annuities or reinsurance contracts located or placed in a foreign jurisdiction and denominated in foreign currency may acquire investments denominated in the foreign currency of such jurisdiction, subject to the limitations described in § 653 of this title. However, investments made under this subsection in obligations of foreign governments, their political subdivisions and enterprises sponsored by said government shall not be subject to the limitations described in § 653 of this title if said investments are rated 1 or 2 by the SVO. The sum total of the investments acquired by the insurer under this subsection shall not exceed one hundred five percent (105%) of the amount of its reserves, net reinsurance and other obligations, under life and risk contracts located in the foreign jurisdiction.
(5) The investments acquired under this section shall be added to investments of the same nature effected under all the other sections of §§ 648–662 of this title for purposes of determining compliance with the limits contained in other sections of §§ 648–662 of this title. All investments in obligations of foreign governments, their political subdivisions and enterprises sponsored by said governments, except those exempted under subsections (3) and (4) of this section shall be subject to the limitations indicated in § 653 of this title.
History —Ins. Code, added as § 6.130 on May 16, 2003, No. 130, § 1.