Puerto Rico lawmakers hear divided testimony on bill to withhold 5% of producers’ commissions to fund insurance regulator

A House of Representatives committee heard detailed testimony on House Bill 341 on funding for the Office of the Commissioner of Insurance (OCS), a proposal that would withhold 5 percent from the commissions paid to insurance producers when the government or a municipality procures insurance without a public auction.

The measure’s sponsor and committee members said the bill aims to raise dedicated funds for the OCS. Alexander Adams Vega, Commissioner of Insurance, told the Comisión de Banca, Seguros y Comercio that “Los fondos son necesarios ahora más que nunca para poder llevar a cabo nuestra función fiscalizadora,” describing recurring shortfalls that limit audits, actuarial reviews and the office’s Insurance Commissioner Certification (ICC) work required under federal Stafford Act rules.

Why it matters: supporters frame the retention as a targeted way to restore the regulator’s capacity after budget reductions and new federal requirements. Opponents from the insurance industry warned the levy would distort market incentives, reduce producer participation in public placements and could, in some circumstances, raise the cost of coverage for government entities and municipalities.

Industry objections and alternative proposals Iraelia Pernas, executive director of the Association of Insurance Companies (ACODES), testified that ACODES opposes the bill. “Por las razones…