P.R. Laws tit. 26, § 2402
(1) A title insurer shall within thirty days after expiration of each calendar year set aside into a guaranty fund an amount equal to ten percent (10%) of premiums received by it for title insurance during that year until such guaranty fund amounts to not less than the amount of capital required under this title for authority to transact title insurance, and shall thereafter maintain such guaranty fund unimpaired.
(2) The guaranty fund shall be security for the payment of losses and expenses incurred on account of the insurer’s title insurance, and shall not be subject to the insurer’s other liabilities so long as any such insurance is outstanding. For the purposes of this provision, a title insurance policy in which the term thereof is not otherwise specified therein shall be deemed to expire twenty years after date of issuance.
(3) The insurer shall suspend issuance of new title insurance during any period in which the guaranty fund is less than the amount required by this section. The insurer’s officers and directors knowingly violating this provision shall be jointly and severally liable as to losses incurred thereby.
(4) The amount of the guaranty fund shall be reported to the Commissioner as part of the insurer’s annual statement.
(5) The insurer shall keep such guaranty fund in Puerto Rico and shall invest it only in such investments as are eligible under § 316(2) of this title; and shall keep such investments separate from the rest of his assets.
(6) Upon liquidation, or reinsurance of all the title insurance of the insurer, the Commissioner may permit withdrawal of such part of the guaranty fund as in his discretion may not reasonably be required for the continuing protection of outstanding title insurance, and may require or approve such arrangements for the continuing custody, administration, and final liquidation of the remaining portion of such guaranty fund as he may deem, in his discretion, to be both practicable and reasonably necessary for the protection of such outstanding insurance.
History —Ins. Code § 24.020; May 10, 1976, No. 32, p. 84, § 17.