The National Council of Private Insurance recently submitted for public consultation a draft regulation on the acceptance of retrocession by insurers and its intermediation. Among other things, the draft regulation allows insurers to accept retrocession risks from foreign reinsurers not registered with the Superintendence of Private Insurers (SUSEP) through foreign reinsurance brokers also not registered with the SUSEP, provided that the local insurer is authorised to operate in the lines of risks accepted.
The Superintendence of Private Insurance recently published Circular 553, which establishes new general guidelines on civil liability insurance policies for directors and officers, replacing the existing regulations on this matter. The new regulation, albeit flawed, has been welcomed by the market, as the previous D&O regulations did not reflect market practices.
The Brazilian Insurance Agency (SUSEP) recently published a circular to provide regulated companies (ie, insurers, reinsurers and private pension companies) with the possibility of entering into a commitment agreement for a change in conduct (known under the acronym 'TCAC' in Portuguese) with SUSEP. While TCACs are not a new instrument, the circular allows the parties to enter into an agreement establishing a reasonable period in which to change or adjust the company's conduct.
A new bill aimed at replacing the Brazilian insurance law will soon be submitted to the Senate and a new insurance law is likely to be enacted in 2017. In general, the bill is exceedingly protectionist towards insureds and so overly detailed that it creates a framework of rules that is confusing and conflicts with other existing laws and regulations not only of an insurance nature, but also of a civil procedure one (eg, the Arbitration Act and the Consumer Defence Code).
Superintendence of Private Insurance (SUSEP) Circular 541/2016 establishes general guidelines applicable to directors' and officers' insurance policies in relation to insurers' right to make direct payments to a third party, defence cost coverage and fines and contractual and administrative penalties. Although the new rule is an improvement, it has been much criticised by the insurance market and there has been a recent plea to SUSEP to suspend the rule's effects.
The Board of Appeals of the National System of Private Insurance has finally shed light on the discussion surrounding the imposition of fines on insurers that conduct unauthorised business in Brazil. The decision clarifies that fines for unauthorised operations are limited to Rs3 million, even where such operations took place before the 2015 amendment to Decree-Law 73/66, which outlines Brazil's national system of private insurance.
New business models created by so-called 'insurtech' companies may revolutionise the sale and marketing of insurance in the coming years. These companies have had a significant impact on the market, including through the creation of online platforms and by monitoring clients' behaviour to help in the development of new products. That said, significant challenges still exist and further development is needed from a legal and regulatory standpoint.
Superintendence of Private Insurance Circular 537 provides additional criteria for complying with Article 14(4) of National Private Insurance Council Resolution 168/2007, as amended, including new rules for the local reinsurers and intragroup cessions market. Contracts that have already been signed but fail to comply with the new rule will be considered valid until their renewal or up to one year from the circular's publication, whichever is earlier.
National Council of Private Insurance Resolution 330/2015 recently came into force alongside several Superintendence of Private Insurance circulars which set out the procedures relating to the resolution. Among other things, the resolution has amended the requirements and procedures in relation to the creation of insurers, pension funds, capitalisation companies, reinsurers and reinsurance brokers and the procedures for electing directors and officers.
The contractual formalisation of reinsurance transactions has been extensively discussed by the reinsurance market in the last few years due to intense supervision by the Superintendence of Private Insurance (SUSEP) and the different legal interpretations of the definition of 'contractual formalisation' and the way in which it is achieved. In order to clarify the additional criteria in this regard, SUSEP recently published a new circular.