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PuertoRico2015

AS KEN KOTCH, PRINCIPAL OF RYAN LLC EXPLAINED, HE REVIEWED A NUMBER OF DOMICILES AS POTENTIAL HOMES FOR ITS CAPTIVE INSURANCE ENTITIES, BUT DECIDED, AFTER EXAMINING THE PROS AND CONS OF VARIOUS U .S . CAPTIVE JURISDICTIONS, THAT “ P UERTO RICO WAS BY FAR THE BEST OPTION FOR US AND THE MAJORITY OF OUR CURRENT AND FUTURE CLIENTS” . “PUERTO RICO’S DOMESTIC INSURANCE INDUSTRY, SEPARATED FROM THE OFFSHORE PLATFORM, OFFERS A POOL OF AVAILABLE INSURANCE PROFESSIONALS THAT CAN SUPPORT THE CAPTIVE’S OPERATIONS” Erick Negrón, Special Counsel of Rexach & Picó is provided under both federal and state constitutions, with legal redress available in federal or state courts. Puerto Rico’s economy enjoys both fiscal and tax autonomy with respect to the US Tax Code, with special distinctions made in several areas. The companies already taking advantage of Puerto Rico’s favorable conditions can attest to this fact. In addition, Puerto Rico offers significant labor cost savings when compared to other domiciles. INSURANCE ARENA Puerto Rico’s insurance legislation is strongly influenced by the National Association of Insurance Commissioners’ (NAIC) model laws, regulations and trends; although unique features of Puerto Rico’s local insurance arena are thoroughly attended to as well. The OCI’s long history of regulatory expertise is another reason to consider Puerto Rico as a viable alternative to transact insurance business. A NAIC accredited regulator since 2012, the OCI is a mature S P E C I A L R E P O R T 2015 PUERTO RICO - 2 - and well developed agency, providing full monitoring of the market in the areas of financial examination, financial analysis, market conduct, actuarial analysis, legal affairs, services to producers/ consumers, investigations, hearing officers and international insurance licensing. The OCI is also a participating member of the Association of Insurance Superintendents of Latin America (ASSAL). The OCI regulates 50 domestic insurers and 358 foreign insurers and reinsurers with a premium volume that reached $10.5 billion in 2013. These risk takers are served by over 11,000 intermediaries and close to nine thousand employees. Health and Disability, with a 72% share, is the traditionally dominant sector, being heavily subsidized by federal and state government. In 2013, after years of self- adjusting to a rapidly changing global insurance arena, the international insurance sector proved to be a strong growth driver for the island’s insurance industry. Following an average growth of 38% in five years, with over 100 regulated entities doing business in a


PuertoRico2015
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