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CNSP Resolution No. 363 dated October 11, 2018

26Out2018Oct26,2018
Insurance, Reinsurance and Pensions

On October 17, 2018, the Superintendence of Private Insurance (Superintendência de Seguros Privados – SUSEP) published Resolution CNSP No. 363, dated October 11, 2018, (Resolução CNSP 363/2018 - "Resolution") regulating the acceptance, by local reinsurance companies, of reinsurance and retrocession risks from foreign cedants and its intermediation.

As per the Resolution, which entered into effect on the date of its publication, foreign cedants are all entities authorized to contract insurance or retrocession, according to the rules applicable in their country of origin, regardless of whether or not these entities are registered with SUSEP.

Local reinsurance companies may negotiate reinsurance or retrocession agreements with foreign cedants on a free and direct basis or with the intermediation of a broker established either in Brazil or abroad. The risks to be accepted by local reinsurers are limited to risks they are duly authorized to accept in Brazil or risks with similar technical characteristics.

The risks accepted by foreign cedants must be controlled and monitored in order to mitigate accumulation and exposure and may be of any nature, including activities that are not allowed in Brazil, provided that the Brazilian rules that aim at preventing money laundering or terrorism financing are observed.

Finally, with the inclusion of article 40-A in the Resolution, the rules regarding mandatory clauses and contract certainty, both addressed in Chapter VII of the Resolution, will not apply to the acceptance by local reinsurers of reinsurance and retrocession risks from foreign cedants.