SUSEP initiates second public consultation on Universal Life Insurance

On August 15, 2025, the Superintendence of Private Insurance (“SUSEP”) issued Public Consultation Notice No. 3/2025, initiating a second round of public consultation on the draft resolution proposed by the National Council of Private Insurance (“CNSP”). The resolution outlines the rules and criteria for the structuring, commercialization, and operation of Universal Life Insurance, and is intended to replace CNSP Resolution No. 344/2016.

The second public consultation, open for a period of 15 calendar days, was prompted by revisions to the original draft aimed at aligning it with the Legal Framework of Insurance (Law No. 15,040/2024). These changes also reflect contributions received during the first public consultation—held in December 2024—from the Brazilian National Federation of Life and Private Pension (“FenaPrevi”) and São Paulo’s Department for Consumer Protection and Defense (“Fundação Procon-SP”).

This initiative is part of SUSEP’s Regulatory Agenda and seeks to modernize a product that, while widely adopted in markets such as the United States and Mexico, continues to face challenges in Brazil due to the absence of specific regulations and ongoing tax uncertainties that hinder its commercial viability.

CONTEXT AND OBJECTIVES OF THE PROPOSAL

The initiative aims to enhance the current regulatory framework by making the product easier for policyholders to understand. It also seeks to clarify that Universal Life Insurance does not have a social security nature and should not be mistaken for an investment product. This distinction is essential to enable appropriate tax treatment.

MAIN PROPOSED CHANGES

Structure and Terminology

• Renaming the terms “Risk Insured Capital” and “Accumulated Insured Capital”, now addressed as “Risk Portion” and “Supplementary Portion,” respectively;
• Reduction of the minimum policy term from five to four full years;
• Exemption from prior SUSEP approval for product commercialization.

Operational Flexibility

• Removal of the provision prohibiting extraordinary contributions;
• Possibility of remunerating the balance of the technical provision based on the Interbank Certificate of Deposit (“CDI”) rate;
• Greater flexibility in charging loading fees, allowing for a combined application;
• Option for early premium settlement.

Contractual and Procedural Aspects

• Authorization of electronic signatures for the Personal Health and Activity Declaration;
• Differentiated grace periods for redemption and compensation payments;
• Enhanced transparency in defining criteria for default characterization; and
• Inclusion of the “sub-contracting party” in group insurance plans.

ADJUSTMENTS TO THE LEGAL FRAMEWORK OF INSURANCE

The draft resolution incorporates key updates to Law No. 15,040/2024, including:

• Introduction of a definition for “Particular Conditions,” along with clarification of their contractual hierarchy;
• Establishment of rules for policy replacement without triggering a new grace period;
• Provision of criteria to distinguish the use of the risk support provision without characterizing default.

MAIN CHANGES FOLLOWING THE FIRST PUBLIC CONSULTATION

Of the 28 suggestions received, 11 were fully accepted, 4 were partially accepted, and 13 were not accepted. Notable proposals that were not incorporated include:

• Defining “insured capital” as the “maximum amount” payable by the insurer for coverage plans such as “partial disability”, in which the insured capital is not necessarily paid in full;
• Allowing flexibility in premium payments under the conventional insured capital model;
• Permitting loading fees on extraordinary premiums and on the entire risk support provision;
• Allocating the full premium amount to the risk support provision.

TOPICS ASSIGNED TO SUSEP REGULATION

Certain operational provisions have been removed from the CNSP resolution and will be addressed in future SUSEP regulations. These include:

• Procedures and deadlines for payment of compensation;
• Amount updates and impact on premium recalculations;
• Availability of contractual terms prior to proposal submission;
• Commercialization and contracting through remote channels;
• Procedures in cases of default.

PARTICIPATION IN THE PUBLIC CONSULTATION

Interested parties may submit comments and suggestions by August 30, 2025 (15 calendar days), via the electronic form available on SUSEP’s website, in compliance with the guidelines outlined in the published notice. All documents related to the public consultation are also available in full on SUSEP’s website.

• Access Public Consultation Notice No. 3/2025 in full.

For additional information on the first round of the public consultation, we recommend reviewing our previous client alert, available at:  SUSEP initiates public consultation on resolution governing Universal Life (UL) Insurance 

Demarest’s Insurance, Reinsurance, Health and Private Pension team is monitoring the developments of this public consultation and remains available to provide further clarifications.