On March 6, 2019, Resolution CNSP No. 381 was published in the Brazilian Official Gazette, establishing the conditions required for the authorization and operation, for a determined period, of insurance companies participating in the Innovation Project/SUSEP – Regulatory Sandbox, which develops innovative projects through the fulfillment of previously established criteria and limits.
The Superintendence of Private Insurance (SUSEP) will publish a public notice which will define the general conditions for participation in the selection process of the project, among which we highlight the following: the term of participation in the project, which shall not exceed 36 months; the types of insurance plans and insurance coverage eligible; the limits of insured amount and risk to be subscribed; and the conditions and criteria that will be used for the selection of participants.
In order to participate in the Regulatory Sandbox, certain eligibility criteria must be met, such as:
(i) the product or service must be innovative, which shall involve the development of a new technology or the adoption of an existing technology used in a different way;
(ii) use of remote means to offer insurance, for example, through the internet;
(iii) presentation of the product or service that is ready-to-go into operation; and
(iv) presentation of a detailed business plan.
According to SUSEP, the objective is to expand insurance coverage in the country through the reduction of prices to consumers, stimulating competition and innovation, and through offering a different experience for policyholders.
Insurance companies that choose to operate from these innovative projects will have their minimum required capital reduced from BRL 15,000,000.00 to BRL 1,000,000.00. The focus of the Regulatory Sandbox is on short-term mass products and, therefore, the segments of life, pension, reinsurance, large risks, and civil liability, among others, are excluded.
SUSEP will select only the first 10 (ten) innovative projects presented. The full text of Resolution No. 381 can be accessed on this link. The Resolution will take effect on April 1, 2020.
Demarest’s Insurance and Reinsurance team is available to provide any additional clarifications on this matter.