On October 30, CNSP Resolution 394/2020 was published, amending CNSP Resolution 168/2007, which provides for reinsurance, retrocession and intermediation activities.
The rule specifically amends the wording of the sole paragraph of Article 17 of CNSP Resolution 168/2007 to clearly provide that the restriction on contracting reinsurance only with local reinsurers does not apply to hedges involving risk that are included in life insurance related to survivorship or supplementary pension plans. The new wording of the sole paragraph shall be applied in the following manner:
Sole Paragraph. Reinsurance operations related to risk coverage sold in life insurance plans for survivorship or supplementary pension plans are not subject to the restriction provided for in the caput of this article, either alone or in conjunction with survivorship coverage.
The new wording is in line with the previous version of the legal instrument but reinforces the possibility that the contracting of reinsurance for risk coverage can be carried out with foreign reinsurers, even if such coverage is included in life insurance for survivorship and supplementary pension plans.
The rule will come into effect on December 1, 2020.
Demarest’s Insurance and Reinsurance team is available to provide any clarifications on the subject.