P.R. Laws tit. 26, § 2301
This chapter shall be known as the “Mortgage Loans Insurance Act” and may be cited as such.
For the purposes of this chapter:
(1) Mortgage loans insurance.— Means insurance against financial losses arising from default in the payment of the principal, interest and other sums payable under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, trust deed, or other instrument constituting a lien or encumbrance on real property.
(2) Authorized realty guaranty.— Means a promissory note, bond, or any other evidence of amortizable indebtedness not exceeding one hundred percent (100%) of the reasonable market value of the realty, secured by a mortgage, trust deed, or any other instrument constituting the first encumbrance or lien on the realty; Provided, [That]:
(a) The property securing the insured loan must be of a residential type or
(b) Building or buildings designated to be occupied for industrial or business purposes.
(c) The lien on such real property may be subject and subordinate to the following:
(i) The lien of any public bond, impost or tax, whose payments are not in arrears.
(ii) Pending rights on minerals, petroleum or timber, easements, rights of way or support, sewer (or drainage) rights, restrictions for building or any other restrictions or agreements, conditions or regulations for use, or leases existing on said real property under which the rentals or benefits belong to its owner.
(3) Reserve for contingencies.— means an additional reserve of premiums established for the protection of the policyholders against the effects of adverse conditions in the economic cycle.
(4) Surplus with regard to policyholders.— means the aggregate sum of the capital, surplus and reserve for contingencies.
History —Ins. Code, added as § 23.010 on Mar. 11, 1976, No. 12, p. 27, § 1; Aug. 15, 1999, No. 244, § 1; May 16, 2002, No. 65, § 1.