CNSP RESOLUTION Nº 241, OF 1 DECEMBER 2011 (versão inglês/LegisMap)

CNSP RESOLUTION Nº 241, OF 1 DECEMBER 2011 (*)

Provides for transfers of risks, in reinsurance and retrocession operations, with legal entities not covered by items I and II of Art. 9^th of Complementary Law No. 126 of 15 January 2007, and about the criteria for proving the insufficiency of the offer of the reinsurance market capacity.

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, considering §4^th of Art. 9^th of the Complementary Law No. 126, of 15 January 2007, Art. 15 of CNSP Resolution No. 168, of 17 December 2007, and considering what is contained in CNSP Process No. 7/2011, originally, and SUSEP Process No. 15414.001106 / 2011-05, hereby announces that the NATIONAL COUNCIL OF PRIVATE INSURANCE - CNSP, in a regular session held on 29 November, 2011, based on Art. 32 of Decree-Law No. 73 of 21 November 1966, as amended by the Complementary Laws No. 126, of 15 January 2007, and No. 137, of 26 August 2010,

Resolved,

CHAPTER I

INTRODUCTION

Art. 1^st – The transfers of risks, in reinsurance and retrocession operations, with legal entities not covered by items I and II of Art. 9^th of Complementary Law No. 126, of 2007, and the criteria for proving the capacity insufficiency of the reinsurance market are subject to the provisions of this Resolution.

CHAPTER II

TRANSFERS OF RISKS

Art. 2^nd - The transfer of risks referred to in Art. 1^st of this Resolution, under the terms of §4^th of Art. 9^th of Complementary Law No. 126 of 2007, with the amendments introduced by Complementary Law No. 137 of 2010, is authorized only when the capacity insufficiency of the local, admitted and occasional reinsurers is proven, regardless of the prices and conditions offered by all these reinsurers.

§1^st - Subject to the provisions of § 3^rd, the capacity insufficiency situation referred to in the head of this article will take place when all local, admitted and occasional reinsurers have been consulted, as a whole and rejected as a whole or partially the risk being ceded.

Editor's Note: Paragraph 1^st was amended by CNSP Resolution No. 366 of 29 October 2018.

§2^nd - If there is partial acceptance of the risk by any of the local, admitted or occasional reinsurers, only the part of the risk that does not find coverage may be ceded to legal entities not covered by items I and II of Art. 9^th of Complementary Law No. 126, 2007.

§3^rd For transfers of retrocession risks by local reinsurers exclusively related to Nuclear Risks operations, the capacity insufficiency referred to in the head of this article takes place by the absence of registration in Brazil of a reinsurer specialized in nuclear risks under the terms of the regulations in force.

Editor's Note: Paragraph 3^rd was included by CNSP Resolution No. 366 of 29 October 2018.

§3^rd As regards in particular Nuclear Risks operations risks transfers in reinsurance by insurance companies, and in retrocession by local reinsurers, the capacity shortage referred to in the head of this article verifies by the absence of a reinsurer specialized in nuclear risks registered in Brazil under the terms of the regulations in force.

Editor's Note: Paragraph 3^rd amended by RESOLUTION CNSP Nº 418, of 20 July 2021.

Art. 3^rd - For the purposes of the risk transfers referred to in Art. 2^nd, the cedents may only carry out operations with legal entities who meet the following minimum requirements:

I - authorization under the laws of the country of origin to underwrite reinsurance or retrocession in the areas in which it intends to operate;

II - Solvency classification, issued by a risk rating agency, with at least one of the following minimum levels:

III - not be a foreign company based in tax havens, thus considered countries or dependencies that do not tax income or tax it at a rate lower than 20% (twenty percent) or, also, whose domestic legislation imposes confidentiality regarding the corporate composition of legal entities or to their ownership.

IV - that the legislation in force in their country of origin allows the movement of freely convertible currencies, to fulfill commitments abroad.

Sole Paragraph - SUSEP may, at any time, exclude any risk rating agency provided for in item II of this article.

Art. 4^th - SUSEP may, exceptionally, authorize transfers of risks to legal entities who do not comply with items I and II of Art. 9^th of Complementary Law No. 126, 2007, nor to the provisions of Art. 3^rd of this Resolution, as long as there are technically justifiable reasons, and may establish additional requirements to the minimum requirements provided for in Complementary Law No. 126, 2007, and in Art. 3^rd of this Resolution.

Sole Paragraph - Any transfer of risk to legal entities who do not comply with items I and II of Art. 9^th of Complementary Law No. 126, 2007, or to the provisions of Art. 3^rd of this Resolution, without the prior authorization of SUSEP is expressly prohibited.

CHAPTER III

CONSULTATION TO LOCAL, ADMITTED AND OCCASIONAL REINSURERS

Art. 5^th – The proof of the capacity insufficiency of the offer of local, admitted and occasional reinsurers, under whichever prices and conditions, will be the negative response for the coverage of the risk, obtained through a formal consultation made to all local, admitted and occasional reinsurers that operate in the line of business to which the risk to be ceded belongs to.

§1^st - The consultation referred to in the head of this article shall contain the terms, conditions and necessary information for the risk analysis, and must be made available in an equitable manner to all reinsurers consulted.

§2^nd - The reinsurers shall have a term of 5 (five) business days, in the case of facultative contracts, and 10 (ten) business days, in the case of automatic contracts, to formalize the total or partial acceptance of the risk.

§3^rd - The absence of manifestation of the reinsurers, within the period referred to in the previous paragraph, shall be considered as a refusal.

§4^th - Reinsurers may request, in the course of the periods provided for in §2^nd of this article, as long as justified, once, in the cases of facultative contracts, and more than once, in the cases of automatic contracts, documents and/or additional information, being the period referred to in said paragraph suspended until the delivery by the cedent of the documents and/or information requested.

§5^th - In case of risk acceptance, the reinsurer must clearly define the terms, conditions and the share of the risk accepted.

CHAPTER IV

CONTRACTING WITH LOCAL REINSURERS

Editor's Note: Chapter IV revoked by CNSP Resolution No. 353 of 20 December 2017.

CHAPTER V

FINAL DISPOSITIONS

Art. 7^th - The terms set forth in §2^nd of Art. 5^th of this Resolution will be counted as of the electronic sending of the consultations to the electronic addresses informed by the reinsurers to SUSEP, and the cedent must have operational procedures that guarantee its effective sending.

§1^st - The availability and maintenance of electronic addresses for receiving consultations are at the reinsurers’ responsibility.

§2^nd - SUSEP shall disclose the list of electronic addresses informed by the reinsurers on its website.

§3^rd - For the effects of the present article, the deadlines are closed at 24:00h on the last business day, considering Brasília-DF time.

§4^th - The deadlines for requesting additional information will begin to be counted from the remainder from the first business day following the date of delivery of the documents and/or information requested, by the cedent.

Art. 8^th - The cedents must, within a maximum of 30 (thirty) days, from the date of the transfer of the risk referred to in Art. 2^nd of this Resolution, notify SUSEP in accordance with its annex.

Sole paragraph - The cedents must submit to SUSEP the reinsurance or retrocession agreement related to the cession referred to in the head of this article, within a period of 15 (fifteen) days to be counted from the end of the period established in the legislation for contractual formalization of reinsurance operations.

Art. 9^th - The cedents must keep available to SUSEP the documentation referring to each transfer of risks referred to in Art. 2^nd of this Resolution and to each reinsurance cession referred to in Art. 6^th of this Resolution, for a period of 5 (five) years from the expiration of the respective contract, without prejudice to the other periods defined in the legislation in force.

Art. 10 Editor's Note: Art. 10 revoked by CNSP Resolution No. 321 of 15 July 2015.

Art. 11 - Without prejudice to the duties of the supervisory board, the audit committees of insurers and local reinsurers, as well as their independent auditors, shall verify compliance with the provisions of this Resolution and expressly indicate the result by means of a detailed report on possible non-compliance with legal and regulatory provisions in force.

Art. 12 - SUSEP is authorized to issue complementary norms providing for the operations referred to in this Resolution.

Article 13 - This Resolution enters into force on the date of its publication.

Luciano Portal Santanna
Superintendent

(Official Gazette “DOU” of 17 December 2011 – pages 25 and 26 – Section 1)

ANNEX

TO THE SUPERINTENDENCY OF PRIVATE INSURANCE

Reference: TRANSFERS OF RISKS IN THE TERMS OF §4^TH OF ARTICLE 9^TH OF COMPLEMENTARY LAW No. 126, OF 15 JANUARY 2007. "

INTERESTED PARTY: [in the case of facultative contracts] [in the case of automatic contracts]

Corporate Tax Payer Code / Individual Tax Payer Code: [in the case of facultative contracts]

SHORT DESCRIPTION OF COVERED RISK / INSURED OBJECT: (maximum of three lines)

COVERAGE TO BE CONTRACTED:

SUM INSURED: [in the case of facultative contracts]

CESSION INFORMATION:

Regards,

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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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