Brazil: Santos Bevilaqua Newsletter – November 2017

Last Updated: 6 December 2017
Article by Santos Bevilaqua Advogados


1) Private Insurance Superintendence - SUSEP ADMINISTRATIVE RULE No. 7018, OF 10/24/2017

SUSEP set up a Work Group to discuss the issues related to the activities of associations, entities and cooperatives that illegally offer insurance coverage and products with insurance characteristics.

The work group is composed of SUSEP representatives, through its coordination offices for Conduct Monitoring and Inspection; the Economic Policy Department (SPE) of the Ministry of Finance; the National Confederation of Insurers (CNseg); the National Federation of General Insurance (FenSeg); the National Federation of Private Social Security and Life Insurance (FenaPrevi); the National Federation of Insurance Brokers (Fenacor); the Brazilian School of Insurance; and the Brazilian Cooperative Organization (OCB).

The deadline for the group to complete the work is 90 days from the publication of the rule.

This is another initiative to fight the illegal and criminal offer of insurance by entities not authorized by SUSEP to operate.

2) BILL 3139/2015

The Special Private Insurance Commission held on November 9 the second public hearing to discuss Bill 3139/15 proposed by representative Lucas Vergílio (SD political party-State of Goiás), which provides for the National Private Insurance System.

Representatives of the insurance market and the Consumer Protection Department attended the hearing of November 9 and stated their position against the sale of the so-called "vehicle protection" by organizations that do not operate in the insurance field. They also questioned whether the cooperatives and associations have the experience and cash necessary to pay coverage for car losses. João Francisco Borges da Costa, president of the National Federation of General Insurance (FenSeg), also noted that the insurance activity "has to be regulated because it affects the popular economy, the resources of the population, and precisely for this reason, it has been increasingly supervised worldwide to protect the consumer and not the insurers."

According to the bill, only corporations or cooperatives may operate in the field of private insurance and provided that authorized by the entity that supervises the insurance market.

The bill also prohibits associations, cooperatives, benefits clubs, individuals and entities from executing insurance contracts or selling products providing coverage, reimbursement and indemnity for any purposes, including those similar to damage or personal insurance.

The public hearings are held to allow those interested to state opinion on the Bill so that the representatives will be able to make a decision.

It is important to note that the offer of insurance by entities not authorized by SUSEP to operate is a crime and a new law would not be necessary to affirm this. This fact has already been recognized in court decisions.

Anyway, this is another initiative to fight the illegal and criminal offer of insurance by entities not authorized by SUSEP to operate.

To read the text of the bill, please click here.

3) Ministry of Finance - MF ADMINISTRATIVE RULE No. 494, OF 11/13/2017

This rule adjusts the monetary value of the Inspection Fee of the insurance and reinsurance, capitalization and open supplementary retirement plan markets.


SUSEP Superintendent submitted for public inquiry the draft of SUSEP Circular that amends Resolution no. 321 issued by the National Council of Private Insurance on July 15, 2015; this resolution provides for technical provisions, assets to reduce the need for coverage for the technical provisions, risk capital based on subscription, credit, operational and market risks, adjusted net worth, minimum capital required, plans to legitimize solvency, withholding limits, criteria for investments, accounting standards, independent accounting and actuarial audits, and Audit Committee related to insurers, open supplementary social security entities, capitalization companies, and reinsurers.

The main changes proposed refer to the subscription of local reinsurers' risk capital; definition and implementation of the liquidity regularization plan (PRL); amendments to annexes I, II, III, which deal with Subscription Risk Capital in insurance transactions, especially Issuance Risk/Pricing; risk related to provision for losses in transactions and correlation matrices related to Issuance Risk/Pricing; amendments to annexes XIV and XV, which deal with Risk Capital based on credit risk, portion 1 and 2, respectively. The period for suggestions ended on November 25, 2017.


SUSEP Superintendent submitted for public inquiry the draft of a Circular that provides for the limit for reinsurance cession and the assessment of the rate established in art. 16 of CNSP Resolution no. 168, of December 17, 2007. The period for suggestions ended on 11/27/2017.

Basically, the rule includes among the lines that cannot not be computed in the calculation of the limit set in art. 16 of CNSP Resolution no. 168/2007 Operational and Indicated Risks; Aviation (body); Optional Civil Liability for Aircraft (RCF); and Oil Risks.

It is interesting to note that, according to the draft, the values related to the reinsurance and retrocession commission will not be deducted from the ceded reinsurance/retrocession premiums, a path opposed to that of the general rule on premium consolidated as the net proceeds from the payment of reinsurance and retrocession premiums and the receipt of reinsurance and retrocession premiums.

To access the draft of the rule, please click here.


SUSEP Superintendent submitted for public inquiry the draft of SUSEP Circular that amends and consolidates the supplementary rules and criteria for survival coverage offered in open supplementary social security plans and makes other provisions.

Some of the proposed innovations are change to minimum limits for reversion of financial results for agreed income above 4.5% p.a.; Open Supplementary Social Security Entities (EAPCs) may invest in units of Specially Constituted Funds (FIEs), subject to the CVM criteria and change to the administrative charge. The period for suggestions ended on November 27, 2017.

To access the draft of the rule, please click here.

To view the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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