CIRCULAR SUSEP No. 249, OF 20.02.2004 (versão em inglês/LegisMap)

CIRCULAR SUSEP No. 249, OF 20.02.2004 (*)

Provides for the implantation and implementation of internal control systems in insurers, saving bonds companies and complementary pension public entities.

The SUPERINTENDENT OF THE SUPERINTENDENCY OF PRIVATE INSURANCE - SUSEP, as provided for in Art. 36, subparagraph "c" of the  Decree-Law No. 73 of  21 November 1966 and considering the provisions of SUSEP Process No. 15414.000475 / 2004- 43,

Resolves to:

Art. 1st - Determine that the insurers, the local reinsurers, the representative offices of admitted reinsurers, the saving bonds companies, the complementary pension public entities and the reinsurance brokerage companies implant internal controls regarding their activities, their information systems and the compliance with legal norms and regulations applicable to them.

(Note: Art. 1st was amended according to SUSEP Circular No. 363 of 21 May 2008)

Sole Paragraph - Internal controls, regardless of the size of the company or entity, must be effective and consistent with the nature, complexity and risk of the transactions.

Art. 2nd - The executive board of the company, the local reinsurer or the entity and of the representative of the admitted reinsurer are responsible for:

I – defining the activities and control levels for all businesses;

II – establishing the objectives of the mechanisms of control and their procedures;

III – systematically verifying the adoption and compliance of the defined procedures;

IV - continuously evaluating the various types of risks associated to the activities of the company, the local reinsurer, the representative office of the admitted reinsurer or the entity;

(Note: Art. 2nd and item IV were amended according to Circular SUSEP No. 363 of 12 May 2008)

V – monitoring and implementing the compliance policy for procedures, based on applicable legislation, reviewing it every six months;

VI – implanting policy of prevention against frauds;

VII – implanting underwriting policy.

Art. 3rd - The internal controls, whose provisions should be accessible to all employees of the company, the local reinsurer, the representative office of the admitted reinsurer or the entity, cannot fail to provide for:

I - the definition of responsibilities within the company, the local reinsurer, the representative office or the entity;

II - the segregation of the activities assigned to the members of the company, the local reinsurer, the representative office of the admitted reinsurer or the entity;

III - monitoring means, to identify potential conflict areas in order to minimize them;

IV - the means of identification and evaluation of internal and external factors that may affect or contribute adversely to achieve the company's, the local reinsurer’s, the representative office of the admitted reinsurer’s or the entity’s objectives;

V - the existence of communication channels that assure to employees, according to the corresponding level of activity, access to information considered relevant to the performance of their tasks and responsibilities;

VI - the definition of hierarchical levels and their respective responsibilities in relation to the content of the information;

VII - the systematic monitoring of activities performed in order to assess if the objectives are being achieved, if the established limits, laws and  applicable regulations are being met, as well as to assure a prompt correction of any deviations;

VIII - the existence of periodical safety tests for information systems kept electronically or not.

§1st  - Internal controls should be periodically revised and updated so that the measures relating to new risks or risks not addressed previously are incorporated to them.

§2nd - The internal audit activity should be part of the internal controls system.

§3rd - The Audit activity referred to in §2nd of this article, when not performed by a specific unit of the company or entity itself, or company or entity component of the same financial group, may be exercised by independent auditors, provided that they are not responsible for auditing the financial statements.

§4th – In case the internal audit activity is carried out by a specific unit, this should report directly to the board of directors or, in its absence, to the executive board of the company, reinsurer or entity.

§5th - In case the internal audit activity is performed according to the clause established in the §3rd of this article, the responsible for its execution shall report directly to the board of directors or, in its absence, to the executive board of the company, reinsurer or entity.

Editora Roncarati’s Note: The Art. 3rd, items I, II and IV and the paragraphs 4th and 5th were amended according to Circular SUSEP No. 363, of 12 May 2008.

Art. 4th - The systematic monitoring of activities related to the internal control system should be object of reports issued at least once every 6 (six) months, containing necessarily:

I - the conclusions of the examinations performed;

II - recommendations regarding any deficiencies, with the establishment of the respective corrections time schedule;

III - the manifestation of the responsible persons for areas where the deficiencies were previously observed and indication of the measures effectively taken as a remedy.

Sole Paragraph - The conclusions, recommendations and manifestation referred to in items I, II and III of this Article shall be submitted to the board of directors or, in its absence, to the executive board, as well as to the external audit, requiring that their records are kept available to SUSEP for a period of 5 (five) years.

Art. 5th - It is the duty of the executive board of the company, the local reinsurer or the entity, and of the representative of the admitted reinsurer, in addition to the responsibilities listed in Art. 2nd of this Circular, to promote high ethical and integrity standards and organizational culture which demonstrate and emphasize to all employees the importance of internal controls and the role of each one of them in the process.

Editora Roncarati’s Note: The Art. 5th was amended according to SUSEP Circular No. 363, of 21 May 2008.

Art. 6th - The internal controls system should be implemented until 31.12.2004, with the observance of the following time schedule:

I - Definition of internal mechanisms, as provided for in article 2nd, items I and II, and article 3rd, paragraphs I and II of this Circular - until 30.06.2004;

II - Definition and availability of the relevant procedures, as provided for  in sections III, IV, V, VI and VII of Article 2nd and in sections III, IV, V, VI VII and VIII of article 3rd of this Circular – until 31.12.2004.

Sole Paragraph - The external audit must make specific mention, in their reports, to the observance of the time schedule established in this article.

Art. 7th - An integrated system of internal controls encompassed by the conglomerate can be used, attested by the external auditors, provided that it meets the requirements established in this Circular.

Art. 8th - The information sent to SUSEP, contained in computerized systems should be accompanied by a declaration signed by two directors, attesting the veracity and reliability of the same.

Art. 9th - The companies and entities shall indicate in the next general assembly, the board of directors meeting or of the executive board meeting following to the publication of this Circular, the name of the director responsible for the internal controls, from the publication date of this Circular.

Art. 10 – If the internal controls are considered insufficient, SUSEP will determine the adoption of additional controls.

Sole Paragraph - While the additional controls described in the head of this article are not implemented, the company, the reinsurer or the entity may have their retention limits reduced, according to specific norm to be edited.

(Note: The sole paragraph of Article 10 was amended according to SUSEP Circular No. 363, of 21 May 2008)

Art. 11 - This Circular shall enter into force on the date of its publication.

Renê Garcia Junior
Superintendent

(Official Gazette “DOU” of 27.02.2004 - page 55 - Section 1)

 (*) 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.

Tags Legismap: