2501

The purpose of this chapter is to require domestic insurers to establish a reserve for the payment of losses arising from the catastrophes to which Puerto Rico is exposed, so that said insurers may have the financial capacity to offer the greatest protection to those insurers exposed to said risks. The provisions of this chapter also seek that domestic insurers depend less on the capacity of foreign reinsurers, since when purchasing reinsurance for these risks, they would only be compelled to buy the excess of the required minimum withholding amounts. As a result of this, the types of catastrophic premium insurance rates in Puerto Rico would be affected in the least possible by the price demands of the world reinsurance market.\nHistory —Ins. Code, added as § 25.010 on Aug. 12, 1994, No. 73, § 1; Oct. 13, 2006, No. 227, § 1.