Committee hears amended bill to align Puerto Rico international insurers with NAIC accreditation standards

The House of Representatives’ Committee on Banking, Insurance and Finance on Oct. 23 heard testimony on House Bill 428, which would amend Puerto Rico’s Insurance Code to create subclasses 3‑M, 4‑M and 5‑M and align the regulation of international multi‑state insurers with the National Association of Insurance Commissioners (NAIC) accreditation standards, proponents said.

Committee members were presented with an amended draft of the bill and testimony from the office of the insurance commissioner and the Puerto Rico International Insurance Association (PRIA). The insurance commissioner’s office said the changes clarify which statutory provisions will apply to international insurers, add alternatives for the posting of guarantees and include a one‑year transition period for existing entities to comply.

“Un honor y un placer estar con ustedes aquí en el día de hoy,” said Licenciada Azusette del Valle Lecaros, the insurance commissioner‑designate, as she described the amendments and the office’s support. The commissioner’s office told the committee the amendments are intended to harmonize Puerto Rico’s regulatory framework with the NAIC’s 22 accreditation standards and to improve transparency, solvency oversight and interstate cooperation.

The amended draft defines the three specific subclasses addressed in the bill: class 3‑M for property and casualty insurance and related reinsurance; class 4‑M for catastrophic and high‑limit accident risks; and class 5‑M for life‑related products and related reinsurance. The commissioner’s office said the bill also clarifies applicability by adopting NAIC definitions for multi‑state international insurers and by specifying which articles of the Puerto Rico Insurance Code will apply to those insurers.

Antonio Ramírez, speaking for PRIA, said his organization initially opposed the original bill because it was “indebidamente amplio y ambiguo” but that the OCS (Office of the Commissioner of Insurance) redraft substantially addressed PRIA’s legal concerns. Ramírez told the committee that, after reviewing the OCS draft and follow‑up negotiations, “PRIA estaría en posición de apoyar la aprobación del PC 4 28, sujeto a que la honorable comisión adopte la versión sometida por la OCS como proyecto de antillado electrónico.”

Both the commissioner’s office and PRIA emphasized that one of the bill’s goals is to address NAIC concerns about participation in state guarantee associations (guaranty funds) and the treatment of insolvency and liquidation when Puerto Rico‑based international insurers write business in other U.S. jurisdictions. The OCS told the committee the bill provides additional guarantee alternatives (for example, trusts and funds retained under applicable regulation) and that the legislation is meant to preserve existing tax incentives while increasing regulatory clarity.

The commissioner’s office told the committee that Puerto Rico’s NAIC accreditation had been suspended on April 23 and that the accreditation status is now subject to an appeal. The office said passage of the amended bill would not automatically restore accreditation but would strengthen Puerto Rico’s position before NAIC review panels. “La firma de este proyecto en la ley no constituye una garantía de reinstalación automática de la acreditación, pero sí nos va a acercar,” the commissioner‑designate said.

Committee members asked about implementation capacity and resources. The commissioner’s office said it has trained staff and has opened a hiring process to support the International Insurance Center’s oversight responsibilities. The amended bill includes a one‑year transition period during which existing entities must submit amended business plans for approval and the office may promulgate implementing regulations.

The committee chair instructed staff to prepare a positive committee report on PC 428 and seek member signatures with the aim of placing the measure on the House calendar as early as the next Monday. No formal committee vote on final passage was recorded during the hearing; the committee action recorded was direction to prepare the report and to pursue scheduling.

Next steps: staff will draft the committee report and obtain signatures, and the measure may be placed on the House calendar for further action. Advocates and the insurance regulator said the amended bill is intended to increase regulatory harmony with NAIC standards, bolster confidence among other U.S. regulators and maintain Puerto Rico’s competitiveness as an International Insurance Center.