P.R. Laws tit. 26, § 2713
(1) No person may require as a condition for, or in connection with, a loan or the purchase or deposit of property under contract or in connection thereof, that any insurance to be provided or whose premium is to be paid directly or indirectly by or on behalf of the assignee, depositary or borrower or on his behalf, on account of such loan, purchase or deposit which secures said loan or is the subject of such a contract be provided in any manner through any particular person, producer or solicitor or any specific insurer.
(2) This section shall not prevent the reasonable exercise by the vendor, lender or depositor of his right to approve or disapprove the insurer selected to underwrite the insurance and to determine the adequacy and timeliness of the insurance offered; but in the exercise of such right:
(a) The insurance policy furnished by the assignee, depositary or borrower in his behalf shall not be disapproved if such disapproval is not based exclusively on uniformly applied reasonable standards regarding the scope of the coverage required, the insurer’s financial solvency, and the services offered. Said standards shall not discriminate against any particular type of insurer, nor shall they provide for the rejection of an insurance policy because said policy has additional coverage to what is required; and
(b) no information resulting from the requirement that an assignee, depository or borrower has to supply any class of insurance shall be used or revealed when such information is favorable to the vendor, lender or depositor, or when it will be detrimental to the assignee, depositary or borrower, insurer or the producer who complies with such requirement, and
(c) it shall not be required, directly or indirectly, for any assignee, depositary, borrower, insurer, producer to pay an additional charge with regard to the handling of any insurance policy required to secure loan, or an additional charge to be paid to substitute insurer’s insurance policy for that of another insurer; except that this clause shall not apply to interest that may be charged on loans for the payment of premiums or advances on premiums pursuant to the securing instrument, nor shall it apply to charges for administrative expenses permitted by other statutes, unless the Commissioner regulates the application of such charges in such a way that they are not in conflict with this section.
(3)
(a) If the insurance applies solely to the vendor, lender or depositor’s interest and the insurance is contracted for, or in behalf of, one of these persons said vendor, lender or depositor or any person in his behalf shall furnish a list before the contract is formalized to the assignee, depositary or borrower, of not less than five (5) insurers that qualify for the insurance in accordance with the standards established under subsection (2)(a) of this section, from which list the assignee, depositary or borrower shall select the insurer that is chosen for the insurance.
(b) If the vendor, lender or depositor places the insurance referred to in this section in contravention of what is provided, and the insurer thus selected becomes insolvent or cancels the insurance, and said cancellation results in the subsequent acquisition of another insurance policy with higher premiums, the vendor, lender or depositor shall assume the consequences of his choice without injuring the assignee, depository or borrower.
(4)
(a) The power to obtain insurance through a certain person, producer or solicitor, or any particular insurer pursuant to subsection (1) of this section may be delegated by the assignee, depositary or borrower to the vendor, lender or depositor only by express mandate. Such mandate shall expire once it has been fulfilled and the vendor, lender or depositor shall not be able to revoke or replace the designation made upon obtaining the insurance without the express consent of the assignee, depositary or borrower.
(b) The vendor, lender or depositor shall only be able to obtain insurance without the express consent of the assignee, depositary or borrower when it is indispensable to protect the best interests of the assignee, depositary or borrower and of the vendor, lender or depositor, and the efforts of the latter to obtain the authorization of the assignee, depositary or borrower have been unfruitful because the assignee, depositary or borrower did not give notice of their change of postal or residential address.
(5) The Commissioner may investigate the business of any person to whom this section applies to determine whether such person has violated its provisions. If it is verified that there has been any violation of this section, the person who committed the violation shall be subject to the same procedures and penalties which apply to the violations of other provisions of this chapter.
(6) This section shall not apply to group life or disability insurance, credit, or loans granted by life insurers.
History —Ins. Code § 27.130; July 2, 1987, No. 78, p. 275, § 1; Jan. 19, 2006, No. 10, § 9, renumbered as § 27.141 on Aug. 9, 2008, No. 230, § 2, eff. 90 days after Aug. 9, 2008.