The fines imposed by the Brazilian Superintendence of Private Insurance will be capped at three million reais (R$3,000,000.00). The new cap created by Law No. 13.195/2015 will become into force on November 25, 2016, one year after the law was published, in attendance to an appeal to avoid excessive and unenforceable fines, as the ones applied based on the previous legislation.
The law changes Articles 108 and 113 of the Decree-Law No. 73/1966, which determined the rules for imposition of fines by SUSEP to companies that operate insurance, coinsurance, reinsurance, retrocession and capitalization operations without the proper authorization in Brazil, based on the value of the insured assets, the operations′ amount and the agreement′s duration, has been amended, without imposing any threshold or cap.
As of the enactment of the law, all fines applied by SUSEP that have not been confirmed yet by the Board will be reviewed and capped in three million Reais. The new law maintained the criteria of the insured amount as a basis for the fine, but authorized the inclusion of other criteria by the regulation.
In relation to the infractions committed by individuals, the law also created a joint liability with the reinsurer, insurer or capitalization entity.
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