Brazil is by far the largest insurance market in Latin America. In this case study, learn how knowledge of key legislative changes, detailed across Axco's suite of products, can keep you up-to-date with the latest requirements in an insurance market, putting you in a stronger position to perform better.
Full details of this change can be found in Axco's Insurance Market Report for Brazil.
Previous legislation reported in Axco’s Insurance Market Report:
Non-admitted insurance in Brazil is not permitted because the law provides that insurance must be purchased from locally authorised insurers, with some exceptions.
In the unlikely event of insurance coverage not being available in Brazil, or there being a lack of interest in providing it, Circular No 392 of 16 October 2009 establishes that insureds and/or insurance brokers may, at any time, be required by Superintendência de Seguros Privados (SUSEP) to present copies of submissions made to at least 10 insurance companies (or all those operating in the line of business concerned if fewer than 10).
SUSEP may also request copies of the corresponding declinatures from insurers, including the reasons for declinature, and a copy of the submission to the proposed non-admitted insurer on the same terms as the Brazilian submission, together with a sworn certified translation into Portuguese. Declinatures resulting from insufficient information provided will not be viewed by SUSEP as valid.
As an alternative, Circular 392/09 also provides for obtaining a "negative letter" issued by a professional class association, provided such class association is recognised by SUSEP. In such cases, the association must consult all Brazilian insurance companies, within one working day from the request for quotation by the insured. The association may only send a negative letter, within three business days, if none of the consulted insurers showed interest in accepting the risk, or if there were only negative responses.
The strict control exercised over the market by SUSEP, and the potential penalties for non-compliance, mean that insurers take care to ensure that coverage is placed in accordance with local regulations.
Updated information from Axco:
Axco then reported on SUSEP Circular No 603/2020, which relaxed the conditions required for non-admitted insurance to be permitted.
The requirement for submissions to be made to 10 local insurance companies has been reduced to five companies, or all those operating in the line of business concerned if fewer than five.
The legislation also stipulates that the option of having a "negative letter" issued by a professional class association has been removed.
Key lesson:
The change in legislation fundamentally alters the strategy and process of looking to place non-admitted insurance in Brazil. The client interested in the market had no idea this change had occurred, and it was only with Axco's information that they were able to actively change their strategy to encompass the latest, most accurate trusted and verified information.
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