P.R. Laws tit. 26, § 4501
The purpose of this chapter is to further the public welfare by regulating and overseeing the financial solvency of insurers and health maintenance organizations. To that end, this chapter provides the Commissioner, as a tool for oversight, with the standards, formulas and reports originated by the NAIC with the purpose of gauging and classifying the capital capacity of these entities to respond to the various levels of risk to which they are exposed in their respective lines of business, without the entities’ solvency becoming impaired. Furthermore, this chapter confers upon the Commissioner the authority to require that insurers take measures to protect their capital and/or reduce their risks, taking into consideration their asset and liability profile. This chapter also establishes the fundamental risk based capital requirements and provides for the levels and mechanisms for corrective action when an entity fails to maintain the necessary capital vis-à-vis its risks.
In the insurance business, it is necessary for there to be a capital surplus with respect to the capital required as risk based capital, computed as per the formulas, computation tables and instructions set forth in this chapter and in the NAIC model legislation entitled “Risk Based Capital”. Insurers shall therefore strive to maintain a capital level that surpasses the levels of risk based capital required under this chapter.
The provisions of this chapter shall be liberally interpreted in order to adequately meet its purpose.
History —Ins. Code, added as § 45.010 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.