CNSP RESOLUTION No. 350 OF 25 SEPTEMBER 2017 (versão inglês/LegisMap)

CNSP RESOLUTION No. 350 OF 25 SEPTEMBER 2017

Provides for retrocession acceptance operations by insurers and 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, and considering what is contained in SUSEP Process No. 15414.618428/2017-75, hereby announces that the NATIONAL COUNCIL OF PRIVATE INSURANCE - CNSP, in the ordinary session held on 22 September 2017, in the form established in item IV of art. 32 of Decree-Law No. 73, of 21 November 1966, and art. 2nd  of Complementary Law No. 126, of 15 January 2007, resolves:

Art. 1st To provide for retrocession acceptance operations by insurers and their intermediation.

Art. 2nd All the retrocession acceptances by insurers and their intermediation are subject to the provisions of this Resolution.

Sole paragraph. The retrocession acceptance is prohibited by Open Entities of Complementary Pension Plans and Cooperatives authorized to operate with insurance.

Art. 3rd For the purposes this regulation, the following definitions apply:

I - retrocession: reinsurance risks transfer from reinsurers to reinsurers or from reinsurers to insurers;

II - spiral risks: acceptance of automatic and/or facultative contracts in risks retrocession already accepted by the retrocessionaire in insurance contracts and/or other retrocession contracts.

Art. 4th The acceptance of retrocession in the country or abroad by an insurer shall be made through direct negotiation with the reinsurer or through a reinsurance broker.

Art. 5th The acceptance of retrocession by insurers arising from foreign-based reinsurers not registered in SUSEP will be allowed, and the acceptance by insurers of reinsurance arising from foreign-based insurers, registered or not in SUSEP, will be prohibited.

Sole paragraph. The intermediation of the operations provided for in the heading of this article by a foreign-based reinsurance broker not registered in SUSEP will be allowed.

Art. 6th The insurers must observe, in the accepted retrocession contracts, the regulatory requirements regarding contractual clauses applied to the reinsurance contracts.

Sole paragraph. For retrocession contracts accepted from foreign reinsurers, SUSEP may provide for the minimum mandatory clauses, subject to the restrictions imposed by the Brazilian law.

Art. 7th The insurers may not accept in retrocession more than 2% (two percent) of the insurance premiums issued in respect of the risks they have underwritten, considering the totality of their operations, in each calendar year.

Sole paragraph. SUSEP may authorize acceptances in a percentage of up to 3% (three percent), provided that for a technically justifiable reason, exclusively, related to the insufficiency of reinsurance capacity offer in the country or the reduction of the volume of issued insurance premiums that temporarily compromise the adequacy of the insurer to the percentage provided for in the heading of this article.

Art. 8th The insurers may accept retrocession only in branches of lines of business in which they are authorized to operate in insurance, without prejudice to the compliance with the rules in force regarding the limit of retention.

Sole paragraph. Insurers authorized to operate exclusively with microinsurance or that operate exclusively in the DPVAT (Compulsory Motor Personal Third-Party Liability) line are prohibited from accepting retrocession.

Art. 9th The insurers must have monitoring and control mechanisms that mitigate risks of accumulation and possible spiral risks.

Article 10. SUSEP may request, at any time, any additional information regarding retrocession acceptances by insurers.

Article 11. SUSEP is hereby authorized to issue additional regulations necessary to comply with 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 27 september 2017 –  page 31 – Section1)

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