P.R. Laws tit. 26, § 2506
(1) Except as provided in subsection (2) of this section and § 2503 of this title, a native insurer may charge its reserve for catastrophic insurance losses, and withdraw the assets that are equivalent to said charges from the trust, exclusively for the payment of said losses and adjustment expenses thereof, in keeping with the catastrophic insurance policies issued by said insurer, provided that the catastrophic insurance losses exceed five percent (5%) of the net direct premiums underwritten by the native insurer during the calendar year preceding the year in which these losses occur. Said charges shall not exceed the amount withheld by said insurer pursuant to its reinsurance agreements.
(2) A native insurer may charge against its reserve for catastrophic insurance losses and withdraw from the trust those assets that are equivalent to said charges for the purpose of increasing its surplus for the policyholders, as defined in § 414 of this title, provided that:
(a) The liabilities of the native insurer are greater than its admitted assets, both determined according to Chapter 5 of this Code;
(b) the charge against the reserve will prevent the native insurer from being submitted to a formal collection procedure, pursuant to §§ 4001–4024 of this title, and
(c) prior authorization is obtained from the Commissioner.
(3) If a charge against the reserve for catastrophic insurance losses is made pursuant to § 2507(3) of this title, the native insurer shall not renew the underwriting of said insurance unless it complies with § 2507(3) of this title.
History —Ins. Code, added as § 25.060 on Aug. 12, 1994, No. 73, § 1.