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National Private Insurance Board (CNSP) Resolution No. 382/20: Principles and obligations to be observed by insurance companies and intermediaries regarding client relationship

21 de maio de 2020

CNSP Resolution No. 382/20 (“Resolution”), published on March 10, 2020, provides for the principles to be observed by insurance companies, capitalization companies, open complementary pension fund entities and intermediaries regarding their customer relationship during the life cycle of their products.

The Resolution defines intermediaries as all those responsible for gathering, promoting, intermediating or distributing insurance products, capitalization and/or open complementary pension products, which includes the broker, the insurance representative, the microinsurance correspondent and the capitalization bonds distributor.

Accordingly, the product life cycle includes all stages of the commercialized product, from its creation and commercialization to the fulfillment of all obligations to the client.

The Resolution establishes a series of principles that should guide the activities of supervised entities and intermediaries, to promote a proper handling of the client and to strengthen the confidence in the private insurance system. Among others, those principles include ethics, objective good faith, free competition and due diligence.

In addition, the Resolution stipulates, among others, the adoption of the following specific measures, especially regarding the Brazilian General Law on Protection of Personal Data (LGPD):

  • ensure legal and infra-legal compliance of the products and services marketed, intermediated and distributed;
  • provide clear, timely and appropriate contractual information in order to reduce the risk of information asymmetry;
  • ensure that all operations related to the insurance claim, including notice registration, regulation and payment are performed in a timely manner, are transparent and appropriate;
  • handle any claims and requests made by clients and their representatives in a timely and adequate manner; and
  • observe, in relation to their clients, the requirements of the legislation that deals with protection of personal data, including rules of best practices and governance.

One of the most significant points made by the new Resolution is the determination that, prior to the acquisition of insurance, capitalization or open supplementary pension products, the intermediary must provide information on:

  1. any direct or indirect participation in voting rights or capital held equal to or greater than 10% in an insurance company or open supplementary pension fund entity;
  2. any direct or indirect participation in voting rights or capital equal to or greater than 10% held by an insurance company or open supplementary pension fund entity, or by the intermediary’s parent company;
  3. existence of an exclusivity obligation to act as an intermediary; and
  4. the amount due as payment for the contract intermediation, as well as the respective amounts of commercial premium or contribution of the contract to be entered into.

Furthermore, the supervised entities are required to implement an institutional conduct policy that consolidates guidelines, strategic objectives and organizational values, in order to guide their activities in accordance with the aforementioned principles. A director responsible for this policy must also be appointed.

Additionally, the Resolution creates the figure of the “hidden client” —a representative of SUSEP assigned to assume the figure of a client interested in acquiring an insurance product — with the purpose of testing the adequacy and compliance with conduct practices by the insurer or intermediary, either in person or remotely, and without the need for prior notice to the supervised entity.

Finally, non-compliance with the provisions of this Resolution subjects the supervised entities to the applicable sanctions and penalties, in accordance with existing regulations, including the suspension of product commercialization and inclusion in SUSEP’s pending issues registry. There is also the inclusion of a specific infraction in CNSP Resolution No. 243/2011, referring to “non-compliance with rules or regulation of conduct practices regarding client relationship or institutional conduct policy”, with provision for fines of BRL 10,000.00 up to BRL 500,000.00.

The Resolution will come into force on July 1, 2020.

Demarest’s Insurance and Reinsurance team is available for any additional clarifications that may be necessary.


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