P.R. Laws tit. 26, § 3808
(a) The Association:
(1) Shall be bound to pay all the covered claims existing before the determination of insolvency and those which may arise before the earliest of the following dates:
(A) The end of the thirty (30)-day period following the determination of insolvency;
(B) the expiration date of the policy, or
(C) the date on which the insured substitutes the policy or causes its cancellation.
Regardless of the other provisions of this chapter, a covered claim shall not include a claim filed with the Association after the final date fixed by the court for filing claims against the liquidator or receiver of the insolvent insurer. The Association shall only pay that sum of each covered claim which exceeds one hundred dollars ($100). Such amount shall be a deductible, for which the assets of the insolvent insurer shall not be liable.
(2) Shall meet its obligations as to covered claims pursuant to the terms, conditions, and limits of the policy of the insolvent insurer. Provided, however, That under no circumstances shall the Association make any payment in excess of three hundred thousand dollars ($300,000) per event, regardless of the number of claimants, nor over one million dollars ($1,000,000) as the annual aggregate, regardless of the number of events covered under such policy. The Association shall be considered as the insurer up to the limit of its obligation in the covered claims and to such extent shall have all the rights, powers, and obligations of the insolvent insurer as if the latter were not insolvent.
(3) Shall distribute the claims paid and expenses incurred by both accounts separately, and shall levy on the member insurers separate assessments for each account in sums sufficient to pay the liabilities of the Association, pursuant to clause (1) of this subsection following an insolvency, the expenses incurred in the handling of covered claims after the insolvency, and other expenses authorized by this chapter. The assessments of each member insurer shall be in the proportion that the net direct premiums subscribed by the member insurer during the calendar year preceding the year the assessment is imposed on the kinds of insurance included in the account, bear to the net direct premiums subscribed by all the member insurers during the calendar year preceding the year in which the assessment is levied on the kinds of insurance included on the account. Each member insurer shall be notified of the assessment no later than thirty (30) days prior to its expiration date. No sum greater than two percent (2%) of the net direct premiums subscribed by the member insurer shall be imposed on any member insurer, in any year for any account, during the calendar year preceding the assessment on the kinds of insurance included in the account. If the maximum assessment, together with the other assets of the Association in any account, does not provide in a year in any of the accounts an amount sufficient to make the necessary payments of the account, the funds available shall be prorated and the unpaid portions shall be paid as soon as there are funds available. Subject to the approval of the Commissioner, the Association shall pay claims in the order it deems reasonable, including the payment of claims as they are received from the claimants or in groups or categories of claims. The Association may excuse or defer, wholly or partially, the assessment of any member insurer, if the same will cause the financial statement of the member insurer to reflect amounts of capital or surplus which are less than the minimum amounts required for a certificate of authority in any jurisdiction in which the member insurer is authorized to transact insurance; however, no dividends shall be paid to stockholders or the insured during the deferment period. The deferred assessments shall be paid when the payment does not reduce the capital or surplus below the required minimum. These payments shall be reimbursed to the member insurers who receive larger assessments by virtue of the deferment, or at their election, shall be credited to future payments. If an insurer member does not pay all or part of an assessment levied within the term granted for doing so, and has not been totally or partially excused or deferred from payment thereof, payment of legal interest on the sum owed shall be imposed from the date on which it should have been paid until the payment is, de facto, made.
(4) Shall investigate the claims filed in the Association and shall adjust, negotiate, settle and pay the covered claims to the extent of the liabilities of the Association, and shall dismiss all other claims, and may revise the settlements, the releases and judgments to which the insolvent insurer or its insured were parties in order to determine to what extent said settlements, releases and judgments can be properly objected to. The Association shall only transact those claims that have been filed within the established period pursuant to the provisions of § 4019 of this title, even though the claim has been judicially submitted.
(5) Shall notify such persons as directed by the Commissioner pursuant to § 3810(2)(a) of this title.
(6) Shall transact the claims through its employees, or through one or more insurers or other persons designated as servicing facilities. The designation of a servicing facility shall be subject to the approval of the Commissioner, but the designation of a member insurer may be declined by said member insurer.
(7) Shall reimburse to each servicing facility for the obligations of the Association paid by the facility and the expenses incurred by the facility in dealing with the claims in the name of the Association, and shall pay other expenses of the Association authorized by this chapter.
(b) The Association may:
(1) Employ or retain the necessary personnel to handle the claims and perform the other duties of the Association.
(2) Borrow the necessary funds to carry out the purposes of this chapter pursuant to the plan of operations.
(3) Sue and be sued.
(4) Negotiate such contracts as may be necessary to carry out the purposes of this chapter and be a part thereof.
(5) Take any other action necessary or pertinent for the purposes of this chapter.
(6) Reimburse the member insurers in proportion to the contribution of each member insurer, the amount for which the assets of the account exceed the liabilities, if at the end of any calendar year the Board of Directors determines that the assets of the Association in any account exceed the liabilities of that account as the Board of Directors may estimate for the following year.
History —Ins. Code, added as § 38.080 on Aug. 17, 1991, No. 72, § 1; Aug. 13, 2008, No. 262, § 1.