Regarding the Client Alert issued on 11/18/2019, we clarify that SUSEP’s Public Consultation No. 12/2019 proposes the revocation of § 5, art. 15, of CNSP Resolution 168/2007, regarding the obligation of the audit committees of insurance companies and independent auditors to verify compliance with the 40% preferential offer to local reinsurers, as follows:
“Paragraph 5 Without prejudice to the duties of the supervisory body, the audit committees of the insurance companies, as well as their independent auditors, shall verify compliance with the sole paragraph of this article and expressly indicate the result by means of a detailed report on non-compliance with legal provisions and regulatory law. ”(NR) (Paragraph included by CNSP Resolution No. 353/2017)
Therefore, the revocation of this provision will absolve insurers from the obligation of verifying, through their audit committees and independent auditors, the fulfillment of said obligation of preferential reinsurance assignment of at least 40% to local reinsurers.
Finally, we clarify that the Public Consultation does not address the revocation of the duty for additional consultation with local reinsurers in case of rejection of the initial proposal.
The Insurance and Reinsurance team is available to provide any clarification on SUSEP’s Public Consultation No. 12/2019, until its final text is published.