Puerto Rico Insurance Information

CIA link to demographic/economic data on this self-governing unincorporated territory of the United States

General Puerto Rico Information

• Compulsory Insurance:
  
  1. Workers’ Compensation;
  2. Automobile ‘No-Fault’ Medical Expenses;
  3. Public Vehicle Liability;
  4. Doctors’ Liability
• Non-Admitted Insurance:
  Prohibited.
• Policy Wordings & Rates / Tariffs Controlled:
  Insurance Services Office (ISO) rating. Property Damage / Business Interruption, Boiler & Machinery, General Liability, Automobile Liability and Crimeare subject to tariff rating.
• Policy Language:
  English (commercial business) or Spanish (private insurance).
• Types of Insurance Restricted to Government Institutions:
  Workers’ Compensation; Automobile ‘No-Fault’.
• Policy Currency:
  All contracts are written in U.S. Dollars.
• Currency Restrictions / Exchange Controls:
  No restrictions.
• Policy Period:
  Annual except for Package Policies which are normally written for a 3 year term with annual payments.
• Cancellation Provisions:
  30 day written notice by Insurer (10 pays for non-payment). Refer to individual policy for cancellation provisions for the Insured.
• Premium Tax, etc. paid by Insured:
  None; however Insurers not incorporated in Puerto Rico must pay a premium tax of 4%. Also certain surplus lines taxes apply (9%).
• Insurance Companies:
  
• Brokers:
  General Agents usually place business on behalf of Brokers and Agents.
• Brokerage Commissions:
  General Agents - 22.5-40%; Agents & Brokers - 15-20%. Note: Commissions cannot be paid to foreign brokers not locally registered.
• Broker of Record Letters:
  Market practice for commercial business.
• Reinsurance:
  Insurers may not cede to unlicensed reinsurers without prior approval from the Insurance Commissioner.
• Local Natural Hazards:
  Hurricane.
• Other Information:
  Puerto Rico has a shortage of property capacity so the rules on non-admitted insurance do not apply to foreign insurers as long as they meet NAIC requirements.

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning, explosion. Aircraft, earthquake, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Available.
• Coinsurance:
  80, 90, or 100%.
• Blanket Insurance:
  Available.
• Business Interruption:
  U.S. Gross Earnings available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available - rates credited according ISO.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  U.S. Inspections are compulsory.

General / Public Liability

• Available Wordings:
  Comprehensive General Liability including normal extensions such as Product Liability, Contractual Liability, etc. Product Recall coverage is not available in the local market.
• Comments:
  Policies are written on either an occurrence or a claims made basis.

Automobile / Motor

• Compulsory Limits:
  Unlimited.
• Comments:
  Government No-Fault Scheme. Coverage is compulsory. Policy applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties. Forms follow U.S. Excess coverage is available locally in the market.

Workers’ Compensation

• Comments:
  Government Fund. Compulsory for all employees (except U.S. Federal employees). Extra-Territorial protection is available in certain instances. Medical Expenses and Occupational Disease benefits are provided by the Fund. Employees have the option to sue.

Marine

• Available Wordings:
  U.S. and UK forms available. War Risk rates follow either market’s scales.

Crime

• Available Coverages:
  Standard U.S. coverages. Subject to ISO forms and rating.