(1) Mutual debts or mutual credits between the insurer and another person in relation to any action or proceeding pursuant to this chapter shall be set-off and the balance shall only be allowed or paid as provided in subsection (2) of this section and § 4030 of this title.\n(2) No setoff or counterclaim shall be allowed in favor of any person where:\n(a) The obligation of the insurer to the person does not entitle the aforesaid to participate as a claimant of the insurer’s assets at the date of filing of the petition for liquidation;\n(b) the obligation of the insurer to the other person was purchased by or transferred to the person so that it would be used as a set-off;\n(c) the obligation of the insurer is owed to an affiliate or entity, and there is no written assignment of the obligation executed more than one hundred and twenty (120) days before the date on which the petition for liquidation is filed;\n(d) the obligation of the person is owed to an affiliate or entity other than the insurer, and there is no written assignment of the obligation executed more than one hundred and twenty (120) days before the date on which the petition for liquidation is filed;\n(e) the er than the insurer, and there is no written assignment of the obligation executed more than one hundred and twenty (120) days before the date on which the petition for liquidation is filed;\n(e) the obligation of the person is to pay an assessment imposed on members or subscribers of the insurer, or to pay the balance on a subscription to the capital stock of the insurer, or the same is in any other way in the nature of a capital contribution, or\n(f) the obligation of the person is to pay premiums to the insurer, whether earned or not.\nHistory —Ins. Code, added as § 40.270 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 26.
Puerto Rico Legal Code