P.R. Laws tit. 26, § 2925
(1) For any calendar year after its first two full calendar years of operation, no domestic mutual insurer on the cash premium plan, other than an insurer issuing nonassessable policies, shall incur any costs or expense in the writing or administration of disability, property, and casualty insurance (other than boiler and machinery or elevator) transacted by it which, exclusive of losses paid, loss adjustment expenses, investment expenses, dividends, and taxes, exceed the sum of:
(a) Forty percent (40%) of the net premium income during that year after deducting therefrom net earned reinsurance premiums for such year, plus
(b) all of the reinsurance commissions received on reinsurance ceded by it.
(2) The bylaws of a domestic mutual agricultural insurer on the assessment premium plan shall impose a reasonable limitation upon its expenses.
(3) The officers and directors of an insurer violating this section shall be jointly and severally liable to the insurer for any excess of expenses incurred. If the insurer fails to exercise reasonable diligence or refuses to enforce such liability, the Commissioner may prosecute action thereon for the benefit of the insurer. Such failure or refusal constitutes grounds for revocation of the insurer’s certificate of authority.
History —Ins. Code § 29.250.