2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 18 - Consumer Credit Insurance (§§ 1801-1812 — 1823) › § 1818 - General provisions that apply to consumer credit insurance

The following provisions shall apply to all consumer credit insurance coverage:
(1) For credit insurance offered to and selected by a debtor prior [to] or along with the credit transaction related to the insurance, the term of the insurance shall commence on the date the credit transaction is executed, subject to acceptance by the insurer.
(2) For credit insurance coverage offered to and selected by a debtor on a date subsequent to the date the credit transaction related to the insurance is executed, the insurance shall commence on a date not prior to the date the selection was made by the debtor, nor later than thirty (30) days after said date, subject to acceptance by the insurer.
(3) Notwithstanding the provisions of subsections (1) and (2) of this section, when a group insurance policy provides coverage with regard to existing debts as of the effective date of the policy, the insurance policy related to said debts shall not commence prior to the effective date of the group insurance policy.
(4) In no case shall the debtor be charged for insurance, nor shall the creditor or the insurer withhold premiums for periods prior to the effective date of the policy to which said charge is related.
(5) The term of any consumer credit insurance shall not extend beyond the termination date specified in the policy. The termination date of the insurance may be prior to, simultaneous with, or subsequent to the expiration date of the debt to which it is related, subject to all other provisions of this chapter.
(6) The term of any consumer credit insurance shall not extend beyond fifteen (15) days from the expiration date of the debt, except when the same is extended without any additional cost to the debtor or except when it is extended pursuant to a written agreement signed by the debtor in relation to a credit transaction or debt renewal, refinancing or consolidation. If the debt is paid in full through its renewal, refinancing or consolidation prior to the date scheduled for the termination of the insurance, any insurance in effect must have terminated before any new insurance may be subscribed in relation to the renewed, refinanced or consolidated debt.
(7) In any case that the insurance is terminated prior to its scheduled termination date, an appropriate refund or credit for any unearned insurance charge that the debtor has paid for periods subsequent to said termination, shall be made to the debtor, except that no such refund shall be made nor credit granted for unused insurance, if the insurance is terminated as a result of the insurer’s compliance with his/her obligation under the contract.
(8) An insured debtor may terminate the consumer credit insurance at any time by giving advance notice to the insurer. The individual policy or certificate of group insurance may require for said notice to be given in writing, or for the insured to turn in the policy or certificate, or both actions.
(9) In those cases of consumer credit insurance offered through group insurance policies which, in the processing thereof the creditor incurs administrative expenses (for reason of the handling thereof), it shall be allowed for the insurer to pay to the particular creditor, upon the approval of the Commissioner, a compensation for said administrative expenses, which shall not exceed twenty percent (20%) of the corresponding premium. The preceding provision shall not be construed as allowing the creditor to undertake any processing for which an insurance producer, solicitor or adjuster license is required, or as allowing for said compensation to be paid to a creditor for processing insurance which is not comprised within the scope of this chapter. Every presentation made to the Commissioner pursuant to this subsection shall be subject to requirements similar to those established in subsections (2) and (3) of § 1206 of this title regarding the registration of rates.
(10) No creditor shall require the applicant for credit to acquire consumer credit insurance, as defined in this chapter, as a condition to grant credit, or if said insurance is acquired, that it be provided through a specific agent or by a specific insurer.
History —Ins. Code, added as § 18.070 on Jan. 9, 1999, No. 15, § 2; July 23, 1999, No. 161, § 2; Jan. 19, 2006, No. 10, § 9; Feb. 25, 2008, No. 19, § 3, eff. 90 days after Feb. 25, 2008.