The Superintendence of Private Insurance (SUSEP) submitted for public consultation, until 11/22/2019, through the Public Notice No. 12/2019, the regulation that aims to make new amendments to Resolution CNSP 168/2007, concerning operations of reinsurance, retrocession and their intermediation.
In general, the changes promote greater freedom in reinsurance placement with foreign reinsurers as well as those belonging to the same group of the cedant insurer. Below is a list of proposed changes:
Revocation of the duty to communicate to SUSEP about intragroup reinsurance operations
Among the proposed amendments is the repeal of § 1 and 3 of art. 14 of the Resolution, extinguishing the obligation of insurers to inform SUSEP about intragroup reinsurance operations and operations concentrated in a single admitted or occasional reinsurer.
Revocation of the duty to further consultation with Local Reinsurers in case of rejection of initial proposal
Another amendment is the repeal of § 5 of art. 15, which states that, in case of total or partial refusal of the preferential offer of 40% of the reinsurance risk by a local reinsurer, the insurer must offer the surplus to other local reinsurers in order to meet the minimum required percentage, provided for in the caput of the article.
Thus, if the provision is repealed, a refusal by a local reinsurer will be sufficient for the insurer to offer the assignment of the risk to occasional or admitted reinsurers, resulting in greater freedom in reinsurance operations.
Restriction to Reinsurance Operations related to survivor life insurance and supplementary pension by foreign reinsurers
The regulation also proposes the repeal of the sole paragraph of art. 17, which will result in the inability of foreign reinsurers to retain risks of any survivor life insurance or pension plans, even if sold in conjunction with personal insurance with other types of coverage.
In addition, there is also a suggestion of repealing Chapter VI of the regulation, which deals with guarantees and provisions in reinsurance and retrocession operations, as well as selective amendments to articles 44, 2, § 1, and the inclusion of § 3 to art. 2, measures that were already included in the previous Consultation Notice (06/2019) and are now consolidated.
The full Resolution draft can be accessed at this link. Interested parties can send comments or suggestions on the text by e-mail to email@example.com, according to the specific standardized table (here) duly completed, until November 22, 2019.
The Insurance and Reinsurance team will follow the development of this Consultation until the final text is published, and is available to provide any clarification on the subject.