Agriculture, Construction, & Food Industry
If the Agriculture, Construction or Food Industry legal entities and natural person principals (who apply independent, professional or expert judgment; not ministerial servants) directly or through controlled affiliates have a staff of at least 10 personnel or gross revenues in excess of $1 million, then:
- Such Agriculture, Construction or Food Industry legal entities and natural person principals (who apply independent, professional or expert judgment; not ministerial servants) must elect to conduct their respective Agriculture, Construction, or Food Industry operations AND/OR a specific project under any of:
- The liability framework of U.S. common law with liability for injuries enhanced by 3x compensatory damages and personal liability for officers, directors and owners to the extent of their equity investment or past year’s compensation;
- good faith compliance with the applicable national and subnational Agriculture, Construction or Food Industry regulations, respectively, of any of Honduras or a Best Practice Peer Country (as if the legal entity and natural person principal were operating and/or the project were located therein; notice of election must also be propagated in all contractual documents); or
- a self-designed regulatory framework proposed in the form of a petition for consideration and adoption by Próspera ZEDE Resolution, which can be made applicable to all similarly situated legal entities and natural person principals if they so elect.
2. Legal entities and natural person principals (who apply independent, professional or expert judgment; not ministerial servants) in the Agriculture, Construction or Food Industry must comply with the Personal Financial Responsibility Statute by obtaining regulated industry insurance from a Qualified Insurer with annual loss limits of $60,000.00 USD/1,489,500 Lempira covering liability for final awards of the default Arbitration Service Provider. If such insurance is provided by the GSP as insurer of last resort, then the annual premium must not exceed $780.00 USD/18,000 Lempira. Further, if the GSP is required to provide such insurance as the insurer of last resort, mandatory insurance terms may be adjusted by transparent negotiation and agreement; and thereafter made available to all insurers and insurers.
Applying for Regulatory Insurance
To obtain a regulatory policy from the insurer of last resort (Próspera Insurance Company LLC), an (e)Resident must first apply in a manner that provides sufficient information to assess the nature of the operations to be covered. This involves a fairly standard set of requests. For example, a statement should be provided to firstname.lastname@example.org including:
- The identification and description of Regulated Industry services to be provided within Próspera ZEDE.
- The location of facility where Regulated Industry services will be provided.
- The name, (e)Resident permit no. (or contact information), and CV/Resume/Background of each Regulated Industry professional service provider (both natural person and legal entity responsible for such services).
- The name, (e)Resident permit no. (or contact information), and CV/Resume/Background of the Regulated Industry facility operator (both natural person and legal entity responsible for such operations).
- The name, (e)Resident permit no. (or contact information), and CV/Resume/Background of the Regulated Industry expert who will certify compliance with reasonable standards of care (and your regulatory election, if any) with respect to each aforesaid Regulated Industry service provider and facility operator (discussed below).
- Where applicable, such as in the Health Industry, risk disclosure and informed consent forms to be utilized during operations.
In addition to this statement, the applicant should complete:
- The Insurance Questionnaire available here.
- The Hazardous Activity or Condition Disclosure available here.
Once these informational requests are completed, the insurer of last resort may be able to generate an appropriate policy and endorsement for your operations without further inquiry; but in many cases, you should expect an intake meeting from a representative of the regulatory insurer to clarify your intended operations.
Essentially, the information provided in the foregoing intake process allows for scientific screening to ensure that your proposed operations in a Regulated Industry are insurable. A proposed application can be rejected by a regulatory insurer due to a variety of factors, including unreasonably high risks, lack of apparent qualifications or competencies, unavailability of necessary regulatory experts, and likely violation of Honduran national criminal law (Prospera ZEDE is generally subject to Honduran national criminal laws). If the regulatory insurer rejecting your application on these grounds is the insurer of last resort, which is a quasi-governmental service provider, you may wish to consider challenging the decision as a violation of the Resident Bill of Rights in the default Arbitration Service Provider, as such a decision may effectively preclude you from operating in a desired Regulated Industry. However, all such litigation is subject to the rule of “loser-pays” with respect to litigation expenses and attorney’s fees.
Keep in mind that, in a competitive market of Qualified Insurers, each such Qualified Insurer can be expected to have its own application process, which may differ significantly from that of the insurer of last resort.