On July 20, 2021, the National Council of Private (CNSP) published Resolution No. 418/2021, which amends CNSP Resolutions No. 194/2008, 197/2008, 241/2011, 330/2015 and 366/2018 and introduces new provisions regarding nuclear risk insurance and operational rules for reinsurers that operate with this type of risk. The new Resolution stems from the results of CNSP Public Consultation No. 23/2021.
Among the innovations introduced, we highlight the following:
- The classification of lack of competition of insurance in the country as the presentation of up to only one proposal in the bidding process or in consultations prior to the bidding process, for the purpose of contracting insurance abroad by legal entities domiciled in Brazil;
- The inclusion of the possibility of risk transfer in reinsurance by the insurers, in relation to nuclear risk operations, classifying insufficient offer of capacity as the lack of registration in the country of a reinsurer specialized in nuclear risks under the terms of the regulations in effect;
- New rules applicable to the registration of foreign reinsurers specialized in nuclear risks set up in the form of a consortium or mutual association; and
- The introduction of new concepts into the regulatory system, such as (i) lack of competition; (ii) foreign reinsurer specialized in nuclear risks; and (iii) nuclear risk consortium.
In effect, the new Resolution repeals articles 3, 4, 5 and 8 of CNSP Resolution No. 194/2008 and article 2 of CNSP Resolution No. 366/2018.
The full text of CSNP Resolution No. 418/2021 can be accessed through this link and the Resolution will come into effect on August 2, 2021.
Demarest’s Insurance, Reinsurance and Supplementary Health team is available to provide any further clarifications that may be necessary.