Catastrophe bonds (cat bonds) and other Insurance Linked Securities (ILS) are now available in Puerto Rico following several amendments to articles within the country’s insurance code.
The new legislation is another example of the Puerto Rican government’s drive to develop its International Insurance Center by providing constant legislative backing and regulatory support for the industry.
In the legislation, the definition of an international insurer has been amended in order to add a new ‘Class 6’—which grants the authority to work with a Risk Valuation Program in order to issue cat bonds and ILS.
Commissioner of Insurance Angela Weyne expects ILS issuers to leverage this new legislation, as it provides flexibility for insurance companies, does not require capitalisation and includes favourable tax incentives.
