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National Council of Private Insurance publishes new Reinsurance rules

26Dez2017Dec26,2017
Insurance, Reinsurance and Pensions
On December 22, 2017, the National Council of Private Insurance – CNSP published Resolution No. 353, dated December 20, 2017 (“Resolution No. 353/2017”), which amends significant provisions of Resolution No. 168, dated December 17, 2007. 

In accordance with Resolution No. 353/2017, there is no longer a limitation or threshold for cession of reinsurance to companies headquartered abroad and which belong to the same economic group, provided that such cession occurs under balanced competition conditions and the risk is effectively transferred.

Furthermore, Resolution No. 353/2017 revokes the mandatory regime, by which ceding companies were obliged to hire a minimum percentage of reinsurance from local reinsurers. 

The preferential offer of at least 40% (forty per cent.) of cession to local reinsurers, as stipulated in Complementary Law No. 126, dated January 15, 2007, is, however, maintained.

Resolution No. 353/2017 reinforced the original definition of preferential offer to local reinsurers in relation to other reinsurers, which offer must be provided on the same conditions that are offered in the international market. We note that the mechanism for the preferential offer is stipulated in Circular SUSEP No. 545, dated January 27, 2017, which remains in effect and was detailed in our memorandum to clients dated February 2, 2017.

Resolution No. 353/2017 also establishes that unfair practices, which do not respect the preferential offer to local reinsurers, may be punished and the reinsurance agreement, in those circumstances, may be disregarded. CNSP delegated to SUSEP the power to investigate and punish such unfair practices.

Resolution No. 353/2017 also requires audit committees and independent auditors of insurance companies to review compliance with the rules concerning the preferential offer, and to provide substantiated reports.

Finally, Resolution No. 353/2017 revokes chapter IV of CNSP Resolution No. 241, dated December 1, 2011, relating to the mandatory cession to local reinsurance companies.

Resolution CNSP No. 353/2017 entered into force on December 22, 2017.

For more information, please contact:

Marcelo Mansur Haddad 
T +55 11 3147-7675

Camila Leal Calais
T +55 11 3147-2838

Cassio Gama Amaral 
T +55 11 3147-7792

Luciana Dias Prado
T +55 11 3147-2613

Thomaz del Castillo Barroso Kastrup 
T +55 11 3147-7880


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