SUSEP Circular No. 612/2020: Preventing and Combating Financial Crimes In Operations Involving Politically Exposed People (PPE)

On September 2, 2020, the Superintendence of Private Insurance (SUSEP) published Circular No. 612/2020, which repeals SUSEP Circular No. 445/2012 and introduce new provisions on the subject of preventing and combating financial crimes in operations involving politically exposed people.

We highlight the innovations below:

Express inclusion of national political party presidents and treasurers, and state and municipal secretaries, as well as councilors, in the list of Politically Exposed People (PPE);

Inclusion of family members (up to second degree relatives), representatives and close collaborators (those who maintain a strict personal link to PPEs) into the scope of the Company’s control and inspection duties;

Creation of a “Money Laundering and Terrorism Financing Prevention Policy” that include its respective governance measures and the Company’s obligation to deliver an annual Effectiveness Report containing information on the results of its internal risk assessments;

Exclusion of the division into groups and values for the purpose of registration of operations and reinforcement that all operations with customers, beneficiaries, third parties and other related parties are subject to registration;

Expansion of the duties to control and inspect PPEs, including monitoring of operations, in addition to the obligation of supervised companies to know their employees, partners and outsourced service providers;

Duty of direct notification to COAF (Financial Activities Control Council) in the case that any evidence of an operation related to financial crimes or with an indication of the financing of terrorism is detected;

Provision for admitted reinsurers and brokers whose annual gross revenue is less than BRL 12,000,000.00 (twelve million reais) in the previous year to have controls compatible with the size and volume of their operations;

Authorization for companies belonging to one single economic group to have a unified database;

Obligation to provide an annual report which details the effectiveness of the internal risk assessment adopted by the company, as well as other mandatory information;

Obligation to comply, without prior notification, with United Nations Security Council resolutions or designations that determine the freezing of assets of any values, owned, directly or indirectly, by natural persons or legal entities.

Even though the published text has removed the express fixation of a five-year grace period for keeping data and information in registry records following the conclusion of the contractual relationship that was provided for in the draft of the Public Consultation, a definition was established that those subject to the regulation must keep the documents and information under the terms of the specific rule, which, pursuant to SUSEP Circular No. 605/2020, is maintained at five years.

The full text of the Circular can be accessed at this link and we also make available below a comparative table prepared by Demarest (only in PT-BR) that presents a comparison of the texts of SUSEP Circular No. 445/2012 and SUSEP Circular No. 612/2020, highlighting the changes and innovations implemented.

Demarest’s Insurance and Reinsurance team is available to assist you in the implementation of procedures related to the changes brought by SUSEP Circular No. 612/2020, and makes itself entirely available to provide any clarifications on the subject.