3704

(1) Every insurer, member of this Association, shall participate in its underwritings, expenses, profits, losses, and liabilities in the proportion that the net direct premium of each member (excluding the portion of premiums that shall correspond to the operations of the Association), written during the preceding year, bears to the total direct net premiums written in Puerto Rico by all the members of the Association in the said year, for the hazards of fire and allied lines.\n(2) The Association shall be governed by a Board of seven (7) Directors, elected by cumulative voting by the members of the Association, whose votes in such election shall be valid, in accordance with the direct net premiums underwritten by each member during the preceding year. At least one (1) of the Directors shall be an individual who is not employed by nor affiliated to any insurer, producer, general agent, insurance consultant, or any other producer or authorized insurance entity in Puerto Rico. The Board shall be elected annually at a meeting of the members or their authorized representatives, on the date and place to be designated by the Commissioner.

rized insurance entity in Puerto Rico. The Board shall be elected annually at a meeting of the members or their authorized representatives, on the date and place to be designated by the Commissioner. The first Board shall be elected within fifteen (15) days after the effective date of this act, on the date and place designated by the Commissioner.\n(3) Neither the Board of Directors of the Association nor its directors shall personally or individually incur any economic liability whatsoever for any action taken in the discharge of their duties and powers under this chapter, which in the case of member insurers shall mean both the insurer and its representative before the Board of Directors, nor the officials of the association, provided they do not act in violation of their fiduciary duties towards the administration, nor act intentionally to cause harm or knowingly that they may cause some harm.\nHistory —Ins. Code, added as § 37.040 on June 14, 1968, No. 85, p. 152; May 6, 1983, No. 35, p. 58; Dec. 29, 2000, No. 462, § 2; Jan. 19, 2006, No. 10, § 9, eff. 120 days after Jan. 19, 2006; Apr. 13, 2014, No. 38, § 1, eff. 30 days after Mar. 14, 2014.