P.R. Laws tit. 26, § 4031
(1) Within one hundred and twenty days of a final determination of insolvency of an insurer by the Receivership Court, the liquidator shall petition the court to approve a proposal to disburse assets, from time to time, out of marshalled accrued assets as they become available, to a guaranty association or a foreign guaranty association having obligations because of such insolvency. The liquidator shall have the right to petition the Receivership Court for an extension of up to one hundred and twenty (120) days to make this petition. If at that time, the liquidator determines that there are not sufficient assets to disburse, the petition required by this section shall be deemed to be satisfied in full if the liquidator files a motion stating the reasons for such a determination.
(2) The proposal shall at least include provisions for:
(a) The establishment of reserves for the payment of administrative expenses and the payment of claims of secured creditors, up to the amount of the value of the security, and of claims included in the priorities established in § 4039 of this title, Classes 1 and 2;
(b) the disbursement of assets marshalled to said date and the subsequent disbursement of assets as they become available;
(c) the equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto;
(d) the obtainment by the liquidator of an agreement with each of the associations entitled to disbursements, pursuant to this section, to the effect that such assets shall be returned to the liquidator, together with the proceeds earned by virtue of the provisions of § 4033 of this title, the assets previously disbursed, as required to pay claims of secured creditors, and those claims that fall within the priorities established in § 4039 of this title, in accordance with such priorities. No bond whatsoever shall be required from any of the aforesaid associations for this purpose; and
(e) a full report from each association to the liquidator accounting for all assets so disbursed to the Association, all disbursements made from said assets, any proceeds earned by the association on said assets and any other matter which the court may require.
(3) The liquidator’s proposal shall provide for the disbursement of assets to the associations in amounts estimated at least equal to the claim payments made or to be made, for which the associations could assert a claim against the liquidator, and shall furthermore provide that if the assets available for disbursement from time to time do not equal or exceed the total amount of such claim payments made or to be made by the association, then the disbursements shall be in the amount of the available assets.
(4) The proposal of the liquidator shall provide, with respect to an insolvent insurer underwriting life or disability insurance, for the disbursement of assets to any guaranty association or foreign guaranty association in the field of life or disability insurance or annuities, or to any other organization or entity which reinsures, assumes or secures insurance policies or contracts pursuant to the laws that create such associations.
(5) Notice of such a petition shall be given to the association and to the Commissioner of Insurance of each state. It shall be deemed that notice has been given when it has been sent by first class postage prepaid certified mail, at least thirty (30) days prior to submitting the application to the court. The court may take action concerning the petition provided the aforementioned required notice has been given and, furthermore, if the liquidator’s proposal meets the requirements of clauses (a) and (b) of subsection (2).
History —Ins. Code, added as § 40.310 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 31.