Since 2005, the International Insurers and Reinsurers Division of the Office of the Commissioner of Insurance of Puerto Rico (OCI), or the International Insurance Center (IIC), propels Puerto Rico as an important member of the international insurance arena. Due to the many advantages, Puerto Rico is a logical portal for insurers and reinsurers from Latin American, Europe and other international markets.

The Government of Puerto Rico adopted this new initiative and incorporated it as part of economic agenda for the 21st Century. The International Insurers and Reinsurers Division is under the Supervision of the OCI. The Department of Economic Development and Commerce oversee the promotion of this facility and the extension of tax decrees, herein explained.

The experience offered by other jurisdictions close to Puerto Rico, has demonstrated that the development of international business centers, such as offshore venues, have provided viable opportunities for efficient and effective economic growth for countries and economies in search of these goals.​

Puerto Rico enjoys a privileged geographical location. The advantages of a fully bilingual (Spanish and English) corporate culture have helped the Government of Puerto Rico in attracting and retaining high technology, capital intensive manufacturers for specialized industries.

Puerto Rico has dedicated billions of dollars to its local infrastructure, which features state of the art communication and technological systems, as well as modern transportation and shipping facilities. Puerto Rico’s service sector has become one of its fastest growing; Information, Finance and Professional Services sectors are a 19.3% of the Non Farm laboral force.

Under the US flag, Puerto Rico’s free market economy is subject to both federal and state regulations designed to protect free market competition specifically within, but not limited to, the insurance and banking industries. Along with the use of US currency, the dollar, and general allowance of free flow of funds abroad, this regulatory structure guarantees sound credit and investment practices. Legal protection is provided under both federal and state constitutions, with legal redress available in federal or State courts.

The Government of Puerto Rico enjoys both fiscal and tax autonomy with respect of United States Tax Code, with special distinctions made in several areas.​

The Office of the Commissioner of Insurance’s (OCI) long history of regulatory expertise is further reason for Puerto Rico to be considered a viable alternative to transact insurance business. The OCI regulates 50 domestic insurers and 345 foreign insurers with a premium volume that reached $12.1 billion for 2015. Puerto Rico is the fourth largest market in Latin America. It also ocupies the first place among those markets as measured both by Premium per Capita and Premium as a percentage of Gross Internal Product.

The OCI is an accredited member of the National Association of Insurance Commissioners (“NAIC”). It is also a participating member of the Association of Insurance Superintendents of Latin America (“ASSAL”).​

Laws No. 399 and 400 of September 22, 2004, created Chapter 61 of the Puerto Rico

Insurance Code. Jointly with Rules 80, 81, 82 and 100 of the Regulations of the Insurance Code, and Ruling LetterCN 2011-123, constitued the legal framework for the IIC. This legislation provides fo the authorization of international insurers and reinsurers to asume risks outside Puerto Rico, under a secure and flexible regulatory scheme, which includes attractive tax benefits.

Law No. 98 of June 20, 2011 was passed to provide long term tax status that will guarantee the tax treatment for the international  insurers and reinsurers.

Law 39 of March 18, 2014 was enacted to set the guidelines for the assumption of domestic risk, regulate third party risks assumption by captives and facilitate the organization of insurance linked securities programs.​​
The regulatory framework of the IIC is based on prudential parameters under an expeditious procedures. Chapter 61 of the Insurance Code enables the organization of International insurers and reinsurers. An Internationa Insurer is an insurer organized in Puerto Rico to assume risk outside Puerto Rico. An international reinsurer may assume risks in Puerto Rico and or participate in the Surplus Lines Market, in compliance with the requirement thereof. Chapter 61 also provides for the establishment, and provides benefits for International Insurer Holding Companies. An International Insurer Holding Company is a Puerto Rico corporation that holds interest in an International Insurer or another International Insurer Holding Company. Finally, the Chapter also allows for the establishment of Foreing Insurer Branches as an International Insurer.

The International Insurers and the branches may conduct business under one of the following clases of authority, or a valid combination thereof:



CLASS 1 AUTHORITY “Pure Captives”
Authority to assume risks from the sole owner of the international insurer, any affiliated owner or other affiliate of the international insurer.
500,000.00 5:1 Premium to Surplus Ratio


Authority to assume risks of the owners, whether or not said owners are affiliated, risks that arise from the business transactions of said owners of affiliates, or any other risk that does not exceed the total of 20% of the net premiums written by the international insurer

5:1 Premium to surplus ratio
3:1 Premium to surplus ratio regarding third party risk

AAuthority to transact Property & Casualty insurance for foreign risk, excluding High Limits Casualty & Property insuranc

3:1 Premium to surplus ratio

Authority to transact Property & Casualty insurance for foreign risk, including High Limits Casualty & Property insurance
2:1 Premium to surplus ratio

Authority to transact Life & disability insurance for foreign risks
Premium to surplus ratio as provided in Business Plan


Unrestricted Life & Disability or Property & Casualty third party risks

No capital requirement

An international insurer with Authority Class 2, 3, 4, 5 or 6 may establish and operate one or more Segregated Asset Plan, with the previous approval of the Plan of Operation by the Commissioner of Insurance. A Segregated Assets Plan, also refered to as Protected Cell Plans in the Property and Casualty environment, are assets available solely for the payment of obligations specifically identified in the corresponding operation plan and not available for the payment of the obligations of other segregated assets plans or for the general obligations of the insurer.

International Insurers and Reinsurers are subject to an Annual contribution based on premium level:

Annual Premium
(No greater than)
> 250,000,000

•      Exemption from Premium Taxes.
•      Exemption on dividends and other profit distributions made by the International Insurer and International Insurer Holding Company.
•      Exemption on municipal franchise and real and personal property taxes.
•      Exemption to the International Insurer and qualifying International Insurer Holding Company from withholding taxes on payments of dividends and other profit distributions made to third parties.
•      Isolation of the proceeds and benefits paid by International Insurers from state and donation taxation procedures, applicable to non residents.
•      Exemption from the income derived from dividends and distribution of profits, in the case of a partnership, distributions in total or partial liquidation or other income items similar thereto received by an International Insurer or an International Insurer Holding Company.
•      $1.2 million tax exemption on Net Income. Exemption applicable at the individual cell level for Protected Cell Company arrangements and at the company level. Preferred 4 % tax rate on Net Income (not applicable to Holding Company), guaranteed by a decree effective over a period of 15 years, renewable for two additional periods. Tax treatment guarantee by a 15 year tax decree, renewable for two additional 15 years periods.
Upon issuing to an International Insurer its Certificate of Authority, the Commissioner shall also issue, together with the Secretary of Economic Development and Commerce, a Tax Exemption Grant which shall detail the entire tax treatment provided by the Law. As a requisite for the Grant, the Commissioner and the Secretary of Economic Development and Commerce may impose additional conditions to the International Insurer relevant to employment or economic activity.
Accordingly, the IIC is a platform for the following business opportunities, among others:
•      Alternative Risk Management strategies as Captive or Associated Captives Insurers
•      Insurers or Reinsurers vehicle to enter Latin America or US Markets
•      Special Purpose Vehicles
•      Vehicle for Integrated Insurance Plans
•      Corporate reorganization using International Insurers Holding Companies
•      Segregated Assets Plans to serve High Net Worth Individual market
•      Securitization Programs

In addition to the tax exemption under the International Insurers and Reinsurers Act of Puerto Rico, companies seeking to move insurance operations to Puerto Rico can also benefit from the island’s larger set of economic incentives. The Department of Economic

Development and Commerce and the Office of the Commissioner of Financial Institutions has the following laws:
•      Law 20 of January 17, 2012 (Incentive to Exportation of Services): Offers several tax incentives, including 4% flat rate, for a variety of services provided from Puerto Rico to clients off the island, including capital investment services, software development, data processing centers, among other service industries.
•      Law 22 of January 17, 2012 (Incentives to Individuals Investors): Offers tax benefits to new residents of Puerto Rico (must be present in Puerto Rico at least 183 days amongst other residency requirements). Under Act 22, interest, dividends and capital gains could be totally exempt from Puerto Rico income taxes in Puerto Rico.
More information available in:
The Office of the Commissioner of Financial Institutions of Puerto Rico manages Law273 of September 25, 2012 (Financial Investment Center). This Law offers tax exemptions to a wide range of traditional banking activities for clients outside of Puerto Rico, including trust services, refinancing, underwriting, managing high-risk funds, lending and clearinghouse services and other financial services.
More information available in:

Alexander S. Adams Vega
Commissioner of Insurance

Glory Mar Montalvo​
Ext. 8000 ​​​