Brazilian Insurance Authority opens public consultation on new regulations for reinsurance

On December 8, 2025, the Brazilian Private Insurance Authority (SUSEP) published Public Consultation Notice No. 14/2025, calling for interested parties to submit suggestions regarding a draft resolution (New Resolution) from the Brazilian Private Insurance Council (CNSP) that would introduce new provisions covering reinsurance, retrocession, coinsurance, reinsurance brokers, foreign currency transactions, and insurance placement abroad. Interested parties may submit suggestions on the New Resolution by December 29, 2025.

The New Resolution is intended to replace the currently effective CNSP Resolution No. 451/2022, adapting its structure and provisions in line with the New Brazilian Insurance Law (Law No. 15,040/2024) and Supplementary Law No. 213/2025. In doing so, it would recognize cooperative insurance companies (sociedades cooperativas de seguro) and administrators of mutual asset protection operations (administradoras de operações de proteção patrimonial mutualista) as cedents of risks in reinsurance (Article 2, Item II of the New Resolution).

When compared to CNSP Resolution No. 451/2022, the following amendments and developments in the New Resolution are particularly significant in regard to reinsurance and retrocession operations:

• Greater flexibility regarding the 70% retrocession limit for local reinsurers (Article 8, Item II)

A mechanism for justifying situations to SUSEP where the 70% retrocession limit is exceeded. Exceeding this limit is currently prohibited by Article 6, Paragraph 3, of CNSP Resolution No. 451/2022.

• Incorporation of a rule from the New Brazilian Insurance Law that provides for forming the reinsurance contract 20 days after the proposal is received, in the event of no response from the reinsurer (Article 11)

Although SUSEP has incorporated this concept into the New Resolution, the details have been deferred to future SUSEP regulations. There were high market expectations that the New Brazilian Insurance Law would take effect with clear and detailed rules on this mechanism (which currently does not exist in Brazil or in other major markets), including how it should interact with the preferential offer to local reinsurers when applicable. Furthermore, the New Resolution reinforces SUSEP’s power to extend the 20-day deadline and provides that, in the event a contract is formed as a result of the reinsurer remaining silent, coverage will be evidenced by proof demonstrating the reinsurer received the proposal.

• Reduction of the deadline for formalizing reinsurance contracts from 180 to 60 days (Article 12)

In addition to establishing a shorter deadline (which market players must pay attention to), the New Resolution clearly states that the general sanction regime will be applied when penalizing non-compliance with the deadline. The New Resolution no longer states that failure to comply with that would result in the reinsurance cession being disregarded for prudential purposes, which is a particularly severe penalty for failing to formalize a valid and effective contract. Note that the current sanction regime under CNSP Resolution No. 393/2020 is being reviewed to increase applicable monetary penalties, among other changes.

• Possibility of advancing reinsurance recovery payments (Article 13)

The New Resolution expressly permits cash calls and reinsurance recovery advances. As requested by the market, it provides that only advances directly related to complying with the underlying insurance contract are subject to immediate transfer to the insured, beneficiary, participant, assisted person, or interested third party under Article 63 of the New Brazilian Insurance Law (Article 13, Sole Paragraph of the New Resolution).

• Reinsurance contracts must provide for procedures and documents required for reinsurance recovery (Article 14, Item V)

In an attempt to replicate (in one form or another) what exists in insurance relationships, this provision mandates that reinsurance contracts contain a clause specifying procedures and documents required for reinsurance recovery. Most attempts to transpose concepts typical of the insurance relationship to reinsurance end up distorting the practice and customs of this market, as is the case here. It is uncommon (if not rare) for reinsurance contracts, including facultative ones, to include such provisions, as they tend to rigidify and bureaucratize a relationship that must remain diverse and dynamic.

• Brazilian jurisdiction and law for risks located in Brazil (Article 15)

In reference to Article 131, Sole Paragraph of the New Brazilian Insurance Law, the draft resolution requires reinsurance contracts covering risks in Brazil to include a clause applying Brazilian law and jurisdiction for dispute resolution. However, this is not what the New Brazilian Insurance Law intended. Firstly, Article 15 of the New Resolution does not address what the applicable law is. Secondly, the lack of a clear provision establishing exclusive Brazilian jurisdiction means the only possible interpretation of Article 131, Sole Paragraph, of the New Brazilian Insurance Law, would be that Brazil-based reinsurers cannot contest the jurisdiction of Brazilian courts if sued in the country.

• Brazilian jurisdiction for lawsuits and arbitrations (Article 15, Sole Paragraph)

This provision of the New Resolution (also based on Article 131, Sole Paragraph of the New Brazilian Insurance Law) would require lawsuits and arbitrations among insurers, reinsurers, and retrocessionaires that may directly affect insurance contracts to be filed in the defendant’s domicile in Brazil, when:

• Issued by a Brazilian insurer; or
• The insured party or prospective insured party resides in Brazil; or
• The insurance contract guarantees interests located in Brazil.

Again, this provision is inconsistent with the New Brazilian Insurance Law. As noted above, the only possible interpretation of Article 131, Sole Paragraph, is that a reinsurer domiciled in Brazil cannot contest Brazilian jurisdiction if sued in the country – in short, it is a matter of ‘may’ rather than ‘must’. Moreover, the final part of Article 15, Sole Paragraph, of the New Resolution introduces scenarios beyond what the law provides for.

• The possibility of cut-through in the event the cedent becomes insolvent (Article 16, Paragraph 1)

This replicates Article 61, Sole Paragraph, of the New Brazilian Insurance Law,  permitting direct payment in the event the cedent becomes insolvent. If this provision is maintained in the New Resolution, it would mark a missed opportunity to reconcile the existing conflict between the provision in the New Brazilian Insurance Law and Article 14, Sole Paragraph of Supplementary Law No. 126/2007, which addresses the same situation differently.

In addition to the changes described above, the New Resolution has removed Article 12 of CNSP Resolution No. 451/2022, which expressly permits the reinsurer’s participation in claims and the adoption of claims control clauses in reinsurance contracts. SUSEP’s Managing Board views these clauses as incompatible with Article 76 of the New Brazilian Insurance Law and should therefore not be permitted under Brazilian law. At the same time, it should be noted that the New Resolution does not expressly prohibit such claims cooperation and claims control clauses.

Yet, as SUSEP’s Technical Committee stated in the New Resolution’s explanatory memorandum, the correct interpretation should be that claims control and claims cooperation clauses are not incompatible with Article 76 of the New Brazilian Insurance Law. Under Article 14 of Supplementary Law No. 126/2007, the existence of a reinsurance contract (regardless of its provisions or type) does not change the fact that the insurer remains solely responsible for indemnifying the insured, beneficiary, participant, assisted person, or interested third party. The business decision to consult with reinsurers in connection with a claim, in addition to being an international best practice based on good faith, is not inconsistent with the legal requirement for the final decision to rest with the insurer.

Regarding insurance contracts placed abroad, Article 38, Paragraph 6 of the New Resolution provides that Brazilian law shall be the one applicable when the insured or prospective insured party resides in Brazil. However, the New Brazilian Insurance Law’s reference to Article 20 of Supplementary Law No. 126/2007 may allow for a different interpretation, as these two provisions address distinct issues. While Article 4, Paragraph 1, Item II, of the New Brazilian Insurance Law prohibits insurance contracted by a Brazilian resident with a Brazilian insurer from being governed by foreign law, Article 20 of Supplementary Law No. 126/2007 seeks to enable access to insurance products unavailable in Brazil or covering risks of Brazilian companies located abroad. Therefore, the New Brazilian Insurance Law’s reference to Article 20 of the Supplementary Law No. 126/2007 should be read as an exception to the general rule, meaning that Brazilian law should not be imposed on situations where contracting insurance abroad is legally permitted, even if the contracting party resides in Brazil. A different conclusion would frustrate the intent of Article 20 of Supplementary Law No. 126/2007.

Among other changes concerning coinsurance operations, the New Resolution seeks to replicate the provisions of Article 34 (Head Paragraph and Paragraph 4), and Article 35 (Paragraph 3) of the New Brazilian Insurance Law by establishing that:

• Coinsurance may be documented in one or more contractual instruments issued by each coinsurer with identical content (Article 29);
• Breaches of obligations among coinsurers must not prejudice the insured, beneficiary, or third parties (Article 30); and
• There is no joint liability among coinsurers – each one exclusively bears its share of coverage, unless otherwise contractually agreed upon (Article 32).

Furthermore, although the New Resolution correctly prohibits coinsurance without risk retention (Article 31), it misses the opportunity to correct the existing definition of ‘coinsurance commission’ (comissão de cosseguro – Article 2, Item III). This definition has led to unnecessary tax disputes by implying remuneration for services rendered, despite this not being the case.

The New Resolution also contains provisions on risk transfers to reinsurers unauthorized to operate in Brazil (Chapter IV), reinsurance brokers’ operations (Chapter VI), and foreign currency transactions, without substantially changing these topics.

For more information on this topic, please contact Mattos Filho’s Insurance, Reinsurance & Private Pensions practice area.