This is the fifth edition — now, with a new layout — of the Insurance, Reinsurance, Pension Plans and Supplementary Health Newsletter, with a compilation of the main news and innovations in the insurance market.
We remain attentive to the constant legal updates and the main highlights of the Insurance market so that our newsletter is as complete as possible and, above all, easily accessible to all interested parties.
Read now our latest issue, produced by our team with great effort. We are always available to hear your ideas and suggestions on how we can improve our newsletter.
Enjoy your reading!
Demarest Insurance and Reinsurance Team
CORPORATE HEALTH PLANS AND THE IMPACT OF TOPIC No. 1.034 RULING
In recent years, it has been increasingly necessary to restructure the corporate health plan benefit in order to reduce expenses and enable its continuity in a reasonable manner. Due to the possibility of changes during the term of the plans, this issue has been constantly put before by the Judiciary, with a wide variety of decisions being rendered in the scope of the state courts regarding the legality of changes in the benefit.
Precisely due to the high level of judicialization, the 2nd Section of the Superior Court of Justice (STJ) judged on Topic No. 1,034 of repetitive appeals to establish an understanding on three controversial issues.
The first defined argument deals with the computation of the contribution period to the corporate health plan by the retired former employee when he was active, for the purposes of calculating the period of his remaining in this plan after the termination of the employment relationship.
The second argument covers the aspect with the greatest divergence in the judgment, as well as the greatest impact on operators and former employers. The third and last repetitive argument defined by the STJ had already been the object of understanding in previous judgments, having been recognized that the retired former employee who contributed under the terms of article 31 of Law No. 9,656/98 did not acquire the right to remain in the same corporate health plan in force at the time of retirement.
IRB+Inteligência: the insurance sector earned BRL 32.5 billion in 1Q21, an increase of 12.2%
The seventh edition of the IRB+Mercado Bulletin, a report by the IRB+Intelligência platform and initiative from IRB Brasil RE, points to positive indicators for the insurance market in the first quarter of 2021. The analysis, focusing on P&C, liability and personal insurance, indicates that the sector registered a record volume and earned BRL 32.5 billion in the first three months of the year, 12.2% more than in the same period in 2020. Alone, March sales closed at BRL 11.5 billion, an increase of 14% compared to the same month last year. It is the tenth consecutive month high.
Open Insurance: Opportunity or Threat?
With the public consultation opened on April 22, SUSEP kicks off the implementation of “Open Insurance” in Brazil. The initiative should bring profound changes in the insurance, open pension and capitalization market in the country. This important milestone converges with the initiative led by the Central Bank to create an environment that will concentrate the entire financial life of users in the near future, the so-called “Open Finance” system.
SUSEP WANTS NEW SANDBOX AND ‘OPEN INSURANCE’ IN 2021
If last year the insurance industry was marked by an intense regulatory transformation, 2021 is promising to be even busier. Plans for the Superintendence of Private Insurance (SUSEP) for the current period include the arrival of “open insurance”, that is, an environment for sharing data between industry members, the implementation of more chapters of the new regulatory framework for insurance and the launch of the regulator’s second “sandbox”, which functions as a laboratory for testing innovative business models, says the superintendent regulator, Solange Vieira, in an interview with Valor.
Cyber insurance and risk management based on the LGPD
The entry into force of the Brazilian General Data Protection Law (LGPD) and the recent occurrences of personal data breaches reveal the need to adopt adequate and appropriate security measures against cyber attacks. One of the safest ways to choose such measures is through Risk Management, with the analysis of possible risks arising from the processing of personal data in the company. Cyber insurance is a market option as a security against possible incidents.
Brief considerations on the compatibility of Open Insurance with the LGPD
Recently, the Superintendence of Private Insurance (SUSEP) put for public consultation the drafts of two acts implementing the initial structure of the Open Insurance System (“Open Insurance”).
According to the European Insurance Authority (EIOPA), an important consideration for possible open insurance solutions is finding “a balance between regulatory objectives related to data protection, insurance and competition, supporting innovation, efficiency, consumer protection and financial stability”.
INSURANCE AND REINSURANCE
PUBLIC CONSULTATION NOTICE SUSEP No. 6/2021, OF MARCH 15, 2021
On March 15, 2021, the Superintendence of Private Insurance (SUSEP) placed for public consultation Public Notice No. 06/2021, presenting a draft of the Circular that establishes the new rules applicable to Liability Insurance. If enacted, the Circular will repeal SUSEP Circular Nos. 336/2007, 348/2007, 437/2012, 476/2013 and 553/2017, putting an end to standardized policy models for civil liability insurance and enabling greater simplification of the clauses and adaptation of the product to the specific needs of each Insured.
The period for contribution ended on April 14, 2021.
CNSP RESOLUTION NO. 407, OF MARCH 29, 2021
On March 31, 2021, the Superintendence of Private Insurance (SUSEP) published CNSP Resolution 407, which established the new rules applicable to the preparation and marketing of P&C Insurance policies to cover large risks. The Resolution is the result of suggestions and information made available by market players in the scope of Public Consultation No. 18/2020 and has been in force since April 1, 2021. Its provisions will be applied to policies renewed or issued as of this date.
NOTICE FOR PUBLIC CONSULTATION SUSEP No. 7/2021, OF MARCH 15, 2021
The Superintendence of Private Insurance (Susep) placed for public consultation a proposal for a regulation that amends SUSEP Circular 624, which provides for the conditions for optional registration and mandatory registration of operations involving property and casualty (P&C) insurance structured under the simple pay-as-you-go financial system in systems approved and managed by registration agencies accredited by SUSEP.
The regulator received suggestions from the insurance market on the subject until May 7, 2021, and is now in the consolidation phase for the publication of the Circular.
OPEN INSURANCE: SUSEP PUBLIC CONSULTATION NOTICE Nos. 12 and 13, BOTH FROM APRIL 22, 2021
On April 22, 2021, the Superintendence of Private Insurance (SUSEP) published Public Consultation Notices No. 12 and No. 13/2021, presenting drafts of a Resolution and a Circular that deal, respectively, with the guidelines for implementation of the Open Insurance System by insurance companies, open complementary pension fund entities, and capitalization companies. Open Insurance is defined, according to Public Notice No 12/21, as the “standardized sharing of data and services through the opening and integration of systems in the scope of the insurance, open-end complementary pension fund and capitalization markets”.
These Drafts were structured with the purpose of establishing an interoperability of Open Insurance with Open Banking, aimed at better serving consumers to make available more innovative options and customized experiences. SUSEP received new suggestions and critiques from the market until April 25, 2021.
PUBLIC CONSULTATION NOTICE SUSEP No. 15/2021, OF MAY 3, 2021
The Superintendence of Private Insurance (SUSEP) placed for public consultation Public Notice No. 15/2021, introducing a draft Circular that presents new provisions on the subject of cybersecurity to be applicable to supervised companies (insurers, open complementary pension fund entities, capitalization companies, and local reinsurers).
The Circular aims to align the insurance market with existing legal provisions and should be interpreted in conjunction with the Brazilian General Personal Data Protection Law (LGPD), with the rules to be issued by the National Data Protection Authority (ANPD) and with consumer legislation, if applicable.
SUSEP received comments and suggestions on the Circular until June 2, 2021.
NOTICE OF PUBLIC CONSULTATION SUSEP NO. 16/2021, OF MAY 3, 2021
On May 4, 2021, the Superintendence of Private Insurance (SUSEP) put for public consultation Edital No. 16/2021, presenting the draft of the suggested new Circular providing for the rules and criteria for the operation of automobile group insurance.
SUSEP’s objectives, in line with the New Regulatory Framework for Damage Insurance introduced by SUSEP Circular 621/2021, is to simplify regulation in the insurance market in order to encourage the market to create more innovative products and greater dissemination of insurance in the country.
SUSEP received comments and suggestions about the draft until June 2, 2021.
REGULATORY SANDBOX – SUSEP PUBLIC CONSULTATION No. 19/2021, OF MAY 27, 2021
The Superintendence of Private Insurance (SUSEP) placed for public consultation Public Notice No. 19/2021, which served as a call for participation for the experimental regulatory environment called “Regulatory Sandbox”.
This is a selective process by the regulator to test and introduce the innovative products of the approved companies into the market.
The schedule for the selection process is expected to occur as follows:
- Registration: July 1 to 10, 2021
- Announcement of the selection process result: by August 24, 2021
- Application for temporary authorization: until September 3, 2021
- Notification of preliminary fulfillment of the conditions for temporary authorization: by November 2, 2021
- Verification of fulfillment of the requirements for temporary authorization: by January 1, 2022.
ELECTRONIC CIRCULAR LETTER No. 003/2021, OF MAY 31, 2021
Following the publication of CNSP Resolution 407/2021, the Superintendence of Private Insurance (SUSEP) published Electronic Circular Letter 0003/2021, which makes it mandatory for supervised companies to inform the regulator about the issuance of policies classified as large risks.
HEALTH AND PENSION PLAN
RESOLUTION RN No. 467 (ANS), OF APRIL 29, 2021
On May 3, 2021, the National Health Agency (ANS) published Resolution RN No. 467, which establishes possibility of annual prior authorization for movement of portfolio, and repeals Normative Instruction No. 54, of April 10, 2017, of the Department of Standards and Qualification of Operators (DIOPE).
PUBLIC CONSULTATION NOTICE PREVIC No. 01/2021, OF MAY 3, 2021
On May 4, 2021, the National Supplementary Pension Plan Council (CNPC), through the consultation system of the National Supplementary Pension Plan Superintendence (Previc), published a notice for public consultation on the issuance of a new Resolution that deals with institutes involved in deferred proportional benefit, portability, redemption and self-sponsorship in plans of closed complementary pension fund entities (EFPCs).
This measure aims to provide more flexibility for the use of the institutes established in the EFPC legislation, making possible, among other provisions, partial redemption in sponsored plans in the Defined Contribution and Variable Contribution modes, in order to make them more attractive and competitive in relation to other pension savings alternatives.
The period for sending suggestions ended after 60 days, starting on May 4, 2021.
ANS PUBLIC CONSULTATION No. 87/2021, of MAY 27, 2021
On May 27, 2021, the National Health Agency (ANS) placed for Public Consultation a new Normative Resolution to provide for the classification of health care plan operators for the purposes of proportional application of prudential regulation, aiming at the segmentation of the sector.
The period for sending comments and suggestions began on May 27, 2021 and will end on July 12, 2021.
ARTICLE ON THE NEW REGULATORY FRAMEWORK FOR P&C INSURANCE
Partners Marcia Cicarelli and Luciana Prado published an article on the new Regulatory Framework for Property and Casualty (P&C) Insurance, highlighting expectations that the new regulation is a path to a very promising future for the insurance market in Brazil.
The article highlights that the Large Risks Resolution only determines principles to be followed and some mandatory minimum elements that the contract must detail, leaving room for a much more detailed and accurate subscription and pricing of risks, as the parties may establish specific conditions to determine the necessary coverage and applicable exclusions. In this sense, the role of the insurers’ risk underwriter, the insurance broker and the policyholders’ risk manager gains a fundamental role in the process in view of the new model.
WEBINAR ON THE CHALLENGES IN CONTRACTING AND ADMINISTRATION OF CORPORATE HEALTH PLANS
On May 11, 2021, Insurance partner Luciana Dias Prado coordinated a Webinar held by Demarest, with the participation of guests André de Barros Martins (Alper Benefits Vice-President) and Cesar Lopes (Lockton Brazil) Director, to discuss the challenges faced by companies on taking out and managing health plans for their employees.
During the Webinar, several topics that impact the final cost of health plans for companies were addressed, as well as the main precautions that companies should take when contracting and managing health plans.
WEBINAR ON THE NEW REGULATORY FRAMEWORK FOR P&C INSURANCE
On April 28, 2021, partner Marcia Cicarelli coordinated a Webinar held by Demarest, with the participation of guests Solange Vieira (Susep Superintendent), Antônio Trindade (CEO Chubb Brazil) e Frederico Knapp (President Swiss Re Brazil) on the new Regulatory Framework for Property and Casualty (P&C) Insurance.
Our partner discussed Circular No. 621/2021, which deals with mass-market insurance, and CNSP Resolution No. 407, which deals with large-risk insurance, addressing the main impacts of the new Regulatory Framework on the insurance and reinsurance market.
‘KNOWLEDGE DOSE’ ON THE NEW REGULATORY FRAMEWORK
Our partner Marcia Cicarelli recorded a video as part of our ‘Knowledge Dose’ series to address SUSEP Circular No. 621/2021, which deals with mass insurance, as well as CNSP Resolution No. 407/2021, which deals with large risk insurance, addressing the main impacts of the New Regulatory Framework in the Insurance and Reinsurance Market.
Laura Pelegrini Delivers Specialization Course provided by ESA-OAB
Laura Pelegrini, senior lawyer of Demarest’s Insurance and Reinsurance team, presented the course “Claim Adjustments and Intervention of the Law Operator” on the dates 20/04, 22/04, 29/04, 06/05 and 17/06, for the Specialization Course “Insurance Law in the Post-Modern Contractual Panorama’ provided by OAB-SP’s Escola Superior de Advocacia Law School (ESA-OAB).
For further information, click here.