P.R. Laws tit. 26, § 3402
The general requirements that the insurance cooperatives shall meet are the following:
(1) To operate in the interest of their members and policyholders.
(2) To operate on the basis of the principle of equality of rights and obligations with respect to their members.
(3) To have available a minimum surplus fund accumulated through member contributions at the time of organization. Said members shall receive a fund contribution certificate as evidence of their contribution.
(4) To grant to each member one single vote which shall be exercised at member assemblies personally and not by proxy. In the case that the member is a cooperative affiliate, or is the Cooperative Bank, it shall exercise its vote through its proxy.
(5) To further the social and economic improvement of their members and policyholders through their joint action in a collective work.
(6) To pay or accredit interest on fund contribution certificates issued and outstanding, according to the insurance cooperative’s surplus. The maximum interest to be paid shall be determined at least every two years, by the Insurance Commissioner, according to the prevailing rates in the private commercial banking institutions.
(7) Not to refuse admission as member to any person by reason of race, color, social standing, religious belief, or political affiliation; that is, to admit every one who, being eligible in accordance with the nature and scope of the operations and activities of the insurance cooperative, applies for admission therein, in accordance with the provisions in this chapter and in the bylaws of the insurance cooperative. These provisions, however, shall not be construed as a waiver of the right of the Board to refuse admission to any person or cooperative that, in its judgment, may prejudice the interests or obstruct or otherwise hinder the accomplishment of the ends and purposes of the insurance cooperative.
(8) Not to be for pecuniary profit, inasmuch as their returns and savings shall be distributed on the basis of sponsorship among the policyholders, after establishing such voluntary reserves as may be deemed necessary for the sound operation of the organization. It being understood by “distribution on the basis of sponsorship”, that which may result from applying an actuarial formula for the distribution of surpluses. Provided, That the directors of an insurance cooperative may from time to time pay or accredit to the policyholders entitled thereto, the sponsorship owing to them after accrediting the members with the corresponding interest. Provided, also, that such payments shall be made from such portions of the surplus funds that represent net savings made and net profits earned from their businesses, if the same do not reduce the surplus of the insurance cooperative to a sum lower than five percent (5%) of all its liabilities.
History —Ins. Code, added as § 34.020 on June 26, 1959, No. 84, p. 220, § 1; June 25, 1965, No. 86, p. 200, § 1; June 14, 1980, No. 135, p. 506; Nov. 12, 2007, No. 174, § 3, eff. 30 days after Nov. 12, 2007.