CNSP RESOLUTION No. 363 OF 11 OCTOBER 2018 (versão inglês/Legismap)

CNSP RESOLUTION N. 363 OF 11 OCTOBER 2018 (*)

Provides for the reinsurance and retrocession acceptances from cedents abroad by local reinsurers, their intermediation and provides other measures.

THE SUPERINTENDENCY OF PRIVATE INSURANCE - SUSEP, in the exercise of the powers granted by art. 34, item XI, of Decree No. 60.459, of 13 March 1967, hereby announces that the NATIONAL COUNCIL OF PRIVATE INSURANCE – CNSP, in the ordinary session held on 05 October 2018, in view of the provisions of items II, VI and VII of article 32 of Decree-Law No. 73, of 21 November 1966, and in the provisions of Complementary Law No. 126, of 15 January 2007, and considering what is contained in SUSEP Process No. 15414.611908/2018-96 resolved:

Art. 1^st To dispose on reinsurance and retrocession acceptances from a cedent abroad by local reinsurers and their intermediation.

Art. 2^nd All reinsurance and retrocession acceptances from a cedent abroad by local reinsurers and their intermediation shall be subject to the provisions of this Resolution.

Art. 3^rd For the purposes of this Resolution, the following definitions apply:

I - cedent abroad: the insurance company based abroad, registered or not within SUSEP, which contracts a reinsurance operation, or the reinsurer based abroad, registered or not within SUSEP, which contracts a retrocession operation;

II - local reinsurer: reinsurer based in Brazil, organized as a corporation, whose exclusive purpose is to carry out reinsurance and retrocession operations;

III – reinsurance from abroad: transfer of insurance risks from a cedent abroad to local reinsurers; and

IV - retrocession from abroad: transfer of reinsurance risks from a cedent abroad to local reinsurers;

Sole paragraph. A company or entity authorized to contract reinsurance or retrocession as determined by the supervisory board of its country of domicile is equivalent to a cedent abroad, regardless of registration with SUSEP.

Art. 4^th The acceptance of reinsurance or retrocession from a cedent abroad by a local reinsurer may be done through direct negotiation with the cedent abroad or through a reinsurance broker based in Brazil or by intermediary abroad.

Art. 5^th Local reinsurers may freely negotiate the contractual clauses related to reinsurance and retrocession contracts accepted from abroad with cedents abroad and reinsurance brokers based in Brazil or intermediary abroad.

§ 1^st The negotiation referred to in the heading shall not impair the compliance with the regulations related to the prevention and combat of money laundering and terrorism financing crimes, as determined by the Brazilian law.

§ 2^nd The reinsurance and retrocession contracts accepted from a cedent abroad, must allow clear identification of the covered and excluded risks.

Art. 6^th Local reinsurers may only accept reinsurance or retrocession contracts from a cedent abroad related to the groups of lines of business in which they are authorized to operate in Brazil, without prejudice to the compliance with the norms in force regarding the limit of retention.

Sole paragraph. Local reinsurers may accept reinsurance or retrocession from a cedent abroad in lines of businesses or groups of lines of business with which there is no correlation in Brazil, provided that the risks covered have technical characteristics similar to the risks of groups of lines of business in which they are authorized to operate in Brazil.

Art. 7^th Local reinsurers shall maintain monitoring and control mechanisms able to mitigate accumulation and exposure risks inherent to the characteristics of the risks covered by reinsurance and retrocession contracts accepted from a cedent abroad.

Art. 8^th The retrocessions ceded by a local reinsurer, relating to risks covered by reinsurance and retrocession contracts accepted from a cedent abroad, shall follow the regulatory provisions applicable to retrocessions related to risks accepted in reinsurance and retrocession from cedents based in Brazil.

Art. 9^th SUSEP may request, at any time, any additional information regarding the operations referred to in this Resolution.

Art. 10  CNSP Resolution 168, of December 17, 2007, becomes effective with addition of Art. 40-A below:

"Art. 40-A The provisions of this Chapter shall not include reinsurance or retrocession contracts accepted from cedents based abroad by local reinsurers, and the retrocession contracts accepted from cedents based abroad by insurance companies."

Art. 11 SUSEP is authorized to issue additional regulations necessary for the execution of the provisions of this Resolution.

Art. 12. This Resolution shall enter into force on the date of its publication.

JOAQUIM MENDANHA DE ATAÍDES

Superintendent

(Official Gazette “DOU” of 17 October 2018 – page 26 – Section I)

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(*) The information provided in this publication is general and may not apply to a specific situation or person. Every effort has been made to ensure that matters of concern to readers are covered. Although the information provided is accurate, be advised that this is a developing area. The information contained herein is not intended to be relied upon or to be a substitute for legal advice in relation to particular circumstances. Specific legal advice should always be sought from experienced local advisers. Accordingly, Editora Roncarati accepts no liability for any loss that may arise from reliance upon this publication or the information it contains.

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