1) DECREE OF 4/3/2019

Published on 4/4/2019 in the Federal Official Journal, this Decree appointed RAFAEL PEREIRA SCHERRE as Conduct Supervision Director of the Private Insurance Superintendence - SUSEP.

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Published on 4/24/2019 in the Federal Official Journal, Ministry of Economy Administrative Rule nº 184, of 4/23/2019, appoints the Special Treasury Secretary (currently the position is held by Mr. WALDERY RODRIGUES JUNIOR) to represent the Ministry of Economy before the National Council of Private Insurance - CNSP.

To access this Administrative Rule, which took effect on the date of its publication, click here.


Published on 4/23/2019 in the Federal Official Journal, the Office of the President's Chief Staff Administrative Rule nº 1598 appoints IGOR LINS DA ROCHA LOURENÇO as Attorney-General of the Federal Prosecution Office before SUSEP.

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4) ELECTRONIC CIRCULAR LETTER No. 2/2019 issued by the Private Insurance Superintendence - SUSEP/Solvency Supervision Board - DISOL/Prudential Monitoring Coordination Office - CGMOP

This Electronic Circular Letter, published on 4/9/2019, establishes the procedures to be followed by the supervised entities in regard to the periodical replacement of the members responsible for independent accounting audits (Art. 128, of CNSP Resolution nº 321/15) and the acceptance of investments held in custody or booked abroad as guarantee assets (§§ 3 and 4 of Art. 11 of National Monetary Council – CMN Resolution no. 4444/15).

In the case of investments abroad, the custodians are now required to submit documents to SUSEP undertaking to permit the disposition of assets only if authorized by SUSEP. This may impair or even make unfeasible some investments abroad to the extent that this procedure may not be possible by reason of the governance of the custodians.

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5) SUSEP STATEMENT No. 220, OF 4/25/2019

On 4/29/2019, the Federal Official Journal published SUSEP Statement nº 220, of 4/25/2019, which extinguishes the Commissions, Committees, and Work Groups instituted by a SUSEP's Statement. The statement came into effect on the date of its publication.

It is a consequence of Decree nº 9759, of 4/11/2019, which extinguishes collective boards of the federal governments and sets guidelines, rules, and limitations for the creation of new ones.

Given that such boards have been instituted chaotically, it seems that this measure makes sense but only if the effectively relevant collective boards (such as the Accounting Commission and Actuarial Commission of SUSEP) are reestablished.

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1) SUPPLEMENTARY LAW No. 167, OF 4/24/2019

Published on 4/25/2019 in the Federal Official Journal, Supplementary Law nº 167, of 4/24/2019, provides for Simple Credit Company (ESC) and amends Law nº 9613, of March 3, 1998 (Anti-Money Laundering Law), Law nº 9249, of December 26, 1995, and Supplementary Law nº 123, of December 14, 2006 (Simples Nacional Law) to regulate the ESCs and institute the Inova Simples Regime. This law came into effect on the date of its publication.

According to it, the purposes of a Simple Credit Company (ESC), operating exclusively in the Municipality where its head office is located or in adjacent Municipalities or, should it be the case, in the Federal District and adjacent Municipalities, are loan, financing, and factoring transactions, using its own funds, carried out with individual entrepreneurs, microcompanies and small-size companies, under Supplementary Law nº 123, of December 14, 2006 (Simples Nacional Law).

It is interesting to note that this law expressly provides that the ESC transactions must meet the following conditions: i) the compensation must be exclusively the interest applied, and other charges, including tariffs, are prohibited; ii) the service provision must be agreed in a proper instrument, and copy of which must be delivered to the other party; iii) the funds must be used exclusively upon charge and credit to deposit accounts held by the ESC and the legal entity that is the other party of the transaction. Additionally, the transactions are valid only after registration with the entity authorized by the Brazilian Central Bank or the Brazilian Securities and Exchange Commission, as provided in art. 28 of Law nº 12810, of May 15, 2013; also, the limitations to interest charge established in Decree Nº 22626, of April 7, 1933 (Usury Law), and art. 591 of Law nº 10406, of January 10, 2002 (Civil Code) do not apply to them.

The law also determines that for the assessment of the base for the calculation of the Income Tax of ESCs, a 38.4% rate will be applied to the monthly revenue. That same rate will be also applied for the calculation of the Social Contribution on Net Income. This new law also amends the Simples Nacional legislation and excludes the ESCs from the possibility of payment of taxes and contributions through this system. On the other side, the law creates the "Inova Simples," a special simplified regime that gives a differentiated treatment to the entrepreneurial initiatives of incremental or disruptive nature that selfdeclare that they are startups or innovation companies to encourage the creation, formalization, development, and consolidation of such companies as agents that produce technological advancements and generate jobs and income.

However, said differentiated treatment, differently from the Simples Nacional, which involves a differentiated tax treatment, consists in fixing a summary procedure to open and close companies under the Inova Simples regime; this procedure will be simple and automatic carried out in the same digital environment of the National Network for the Simplification of the Registration and Legalization of Companies and Businesses (Redesim), on the official website of the federal government. The digital form to be completed is available in a window or icon named Inova Simples.

This measure establishes a new paradigm, and its impacts on the regulated activities, such as insurance and its intermediation, will certainly be the subject of many discussions.

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