P.R. Laws tit. 11, § 24
Before June 1 of each year it shall be the duty of the Manager of the State Insurance Fund, in the exercise of the power and discretion hereby conferred upon him, to prepare a schedule of classifications according to the occupations or industries to which this chapter refers. He shall also fix for each class of occupation or industry the lowest possible premium rates, including minimum rates, consistent with the establishment of a solvent state insurance fund and the creation of a reasonable surplus.
Before July 1, 1936, and annually thereafter, it shall be the duty of the Manager of the State Insurance Fund to revise such schedule of classifications prescribed in the preceding paragraph as, in his judgment, should be revised. Such revision shall be in accordance with the underwriting experience accumulated from the beginning of the effectiveness of this act and up to December 31 of the preceding year and such other incidental experience and the available statistics in regard to the hazards and underwriting risks in the classifications to be revised.
In connection with this annual revision of the schedule of classifications, it shall be the duty of the Manager of the State Insurance Fund to revise such premium rates, including minimum rates, corresponding to the classifications in force as, in his judgment, should be revised. Such premium rates, including minimum premium rates for each class of occupation or industry, shall be the lowest possible rates consistent with good actuarial judgment and with the conservation of a solvent State Fund and the maintenance of a reasonable surplus, after taking into consideration the losses incurred through legitimate claims for injury and death, the payment of which he has authorized, chargeable to the State Insurance Fund, for the benefit of the injured, and of the beneficiaries of those deceased, and giving full consideration to the maintenance of adequate statutory claims and contingent reserves, as well as the costs of administration and all other expenses; and in order that said object may be attained, the Manager shall bear in mind the following requirements in classifying the occupations or industries, and in fixing the premium rates for the risks of same; Provided, That the insurance on coffee plantations and the coffee crop shall be included within the classification of general agricultural insurance.
(1) The Manager shall keep an accurate account of the money paid in for premiums by each of the several groups of occupations or industries, and the expenses of administering the State Fund, as well as the disbursements and expenses incurred on account of injuries or death of laborers and employees in each of said groups of occupations or industries, including the creation of a reserve to meet anticipated or unexpected losses until all claims mature; he shall also keep an account of the amount received from each individual employer, and of all the amounts disbursed for expenses of the State Insurance Fund; he shall keep an accurate account of payments and costs for injuries and death of the employees or workmen of each individual employer, and all other necessary actuarial accounts and other necessary statistics consistent with the efficient administration of a solvent state insurance fund; Provided, that the Manager shall be obliged to set aside regularly from all moneys received as premiums for the State Fund, as they are received, five percent (5%) of such receipts, for the creation and maintenance of a reserve fund until such reserve fund amounts to fifty thousand dollars ($50,000). After the reserve fund has reached said sum, the Manager of the State Fund shall credit regularly to said reserve fund a sum which shall not exceed four percent (4%) nor be less than two percent (2%) of all moneys received as premiums for the State Fund, as they are received, until such reserve fund reaches one million dollars ($1,000,000). When the reserve fund shall have accumulated the said sum of one million dollars($1,000,000), the Manager shall not credit to said reserve fund any part whatsoever of the moneys received as premiums. This fund shall be available to cover any deficit in the State Insurance Fund in any fiscal year and in case of catastrophes.
(2) The Manager of the State Insurance Fund may use, for grading the premium rates, such system as, in his judgment, has been the best calculated to fix individually, and in the most equitable manner, the value or the premium rate of each risk, and which is based on the experience derived from the accidents that occurred and appear in the files of each employer individually, and to encourage and stimulate the prevention of accidents; he shall formulate fixed and equitable rules controlling the same, which rules, however, shall conserve to each risk the basic principles of Workmen’s Compensation Insurance.
History —Apr. 18, 1935, No. 45, p. 250, § 23; Apr. 21, 1950, No. 74, p. 180, § 1; June 22, 1957, No. 89, p. 430; renumbered as § 21 on July 1, 1996, No. 63, § 3.