22 May 2017Accounting & tax analysis

Puerto Rico is ‘open for business’ despite bankruptcy concerns: PRIIA

The Puerto Rico International Insurers Association (PRIIA), an industry trade group, has assured that its international insurers are ‘open for business’ in spite of the fact the island is filing for voluntary bankruptcy.

The Caribbean island and US territory filed a voluntary bankruptcy petition under Title III of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA).

PROMESA, which was enacted by US Congress and signed into law by President Obama in 2016, provides the legal framework for local Puerto Rico government entities to restructure debt obligations.

"Puerto Rico's International Insurance Center operates under laws and regulations that insulate its member companies and their clients from any changes to Puerto Rico that Title III bankruptcy may bring about,” PRIIA said in a statement.

“Regulation of companies operating in the Center is provided by the Office of the Commissioner of Insurance of Puerto Rico, which receives funding from fees paid by its regulated entities.There is no change to the tax, regulatory, or other legal status of any licensed insurer operating in the Center as a result of the Title III filing. Puerto Rico's international insurers are open for business."

PRIIA member and Advantage Insurance CEO Walter Keenan added: "PROMESA was enacted to help grow Puerto Rico's economy. The International Insurance Center has brought jobs and investment capital to Puerto Rico and will continue to play an important role in the Commonwealth's return to prosperity.

“PROMESA recognises the importance of growth engines, such as the International Insurance Center, and the law expressly preserves and continues the benefits our clients and companies enjoy today."

In 2016, Puerto Rico saw more than 100 new captive cells formed.