CNSP complies with 8 council votes for sector regulatory agenda

Wednesday, December 20, 2017

Notice from the Brazilian treasury (machine translation)

December 19, 2017

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"Even in the face of a challenging year, the Superintendency of Private Insurance (SUSEP), through its collegiate board and its high-quality technical staff, succeeded in overcoming several challenges in both regulation and supervision. Proof of this is the result of this meeting, "said the Superintendent of Susep, Joaquim Mendanha de Ataídes, at the end of the last meeting of the year of the National Council of Private Insurance (CNSP), which took place on the afternoon of this Tuesday, December 19, in Brasilia. At the occasion, the CNSP accepted eight important votes from the municipality for the insurance sector's regulatory agenda.

Susep and CNSP approved new rules for remote means, reinsurance and for insurance: popular auto (popular auto), funeral, Personal Injury caused by Motor Vehicles of Land (Dpvat) and insurance of Civil Liability of the Explorer or Air Carrier (Straight). In addition, Resolution CNSP 321/2015, which addresses technical provisions, risk capital based on the risks of underwriting, required minimum capital, among other aspects related to solvency, will be changed, as well as the normative on the Technical Actuarial Note of Portfolio ( NTAC). According to Joaquim Mendanha, "2017 was a very productive year for autarky, when issues of extreme importance for the development of the sector were taken to the state agenda, but 2018 has already begun."

Regarding today's vote, Joaquim Mendanha pointed out that the work carried out by the board and the technical staff of the municipality from the beginning of its administration in July 2016 to date has already resulted in 19 resolutions with the CNSP and 21 circulars issued to the supervised market. He highlighted that the agency has managed to overcome several obstacles by working proactively and focusing on efficiency and bureaucracy of processes. "As a consequence, the local authority has often been able to anticipate the needs of the insurance consumer and the supervised market. With this, it has been possible to disseminate one of the main pillars of my management: to make Susep a agent of foment to the industry ", it emphasized.

Finally, the mayor stressed that the first great challenge of 2018 is to continue the hard work and quality that has been developed throughout 2017 and anticipated priority issues that are already on the agenda of SUSEP for the next year Among them, rural insurance, an important mechanism for the development of agribusiness in Brazil; the regulatory framework for microinsurance, which will allow the widening of the capillarity of insurance products to the poorest sections of the population; Compulsory Liability insurance (RCO); the insurance lender; Work Accident Insurance (SAT); the insurance guarantee; the development of the annuity market; the further study of the marginal market and self-regulation; the electronic record of policies; and the cost of regulation that, according to Joaquim Mendanha, is an orientation of the Ministry of Finance.

New rules

Popular auto insurance: The "Auto Popular"

The amendment of CNSP Resolution 336/2016 will allow insurers to offer this product only with the network option referenced as the choice for the repair of damaged vehicles. In addition, there was an increase in the article that states that the insurer may set a minimum vehicle age and change the article that emphasizes the possibility of using new parts. In view of this review and with regard to the rights and duties of the consumer, two other articles were proposed: 1) that requires the science of the insured when the same is contracting a product that has only the network referenced as a repair option; and (2) which reaffirms the responsibility of the insurance companies for the information and advertisements disclosed in respect of the products they sell.

Funeral insurance: specific regulations for the branch

The product, despite having a normative forecast and being marketed in the market, did not yet have specific regulations that would characterize its coverage and address its peculiarities. In this sense, a draft resolution was drawn up, emphasizing: that the coverages will have as objective to guarantee the service provision or the reimbursement of funeral expenses; in cases of reimbursement, the beneficiary may opt for service providers at his own discretion, provided that he is legally entitled; the beneficiaries of the insurance shall be those who prove that they have borne the expenses of the insured's funeral; if indemnification is provided only in the form of service provision, in the case of the impossibility of using the authorized service network, the beneficiary may seek other service providers, being entitled to reimbursement of expenses incurred; in addition to the inclusion of the spouse and child clauses already provided for in the insurance of persons, funeral insurance plans may contain optional supplementary clause of family members, offering coverage to the relatives of the principal insured; the insurers will be responsible for the obligations assumed when the companies are contracted as providers of the funeral service; and in order to offer funeral insurance plans, service providers must sign contracts as insurance representatives.

DPVAT: reduction of 35% in the tariff premiums with exception to category 9 (moticicletas, scooters, mopeds and similar), which is not reduced

The CNSP approved the reduction of Dpvat insurance premiums by 35%, except for category 9 (motorcycles, scooters, mopeds and similar), which will not be reduced for the 2018 fiscal year. The tariff analysis is carried out annually by the municipality and was based on the conclusions of the actuarial evaluation of the working group set up within Susep itself.

Advance on remote media

Among the main changes, the amendment of Resolution CNSP 294/2013 will allow the use of the remote means for collective insurance and pension contracts. In addition, it will enable the use of remote means for claims warnings, redemption requests, concession of benefit, portability, alteration of beneficiary (s) and other requests that imply in the alteration or termination of the contractual relationship. The edition of the new regulation will promote the reduction of the operational costs of insurers and the Complementary Private Pension Entities (EAPCs), enabling the offer of less expensive products to the consumer.

Reinsurance: new rules for retrocession and intermediation

The draft resolution will amend Articles 14 and 15 of CNSP Resolution 168/2007, which provide, respectively, on the transfer of risks to companies affiliated or belonging to the same foreign-based financial conglomerate (intra-group transactions) and to the reinsurers' reserve local - percentage of preferential supply and mandatory reinsurance contracts. The review is justified in the search for improvements and improvement of the Brazilian reinsurance regulation in compliance with the best global practices of the sector . The amendment also proposes to adjust the current regulation, especially for the cases of preferential supply and compulsory reinsurance contracts.

Straight line: updating of current legislation

The current Susep Circular for Reta Civil Liability insurance was published in 1975 and since then important changes have taken place with the issuance of insurance decrees and / or laws. In conjunction with the National Civil Aviation Agency (ANAC), the resolution draft will specify, among other aspects, the definition of mandatory hiring coverage in accordance with Law No. 7.565 / 86 (Brazilian Aeronautical Code); the inclusion, in accordance with SUSEP Circular 256/2004, of clauses relating to the form of hiring, renewal, relief and relief, to the forum, loss of rights, risks excluded, proportional contribution or competition of policies, and jurisdiction or geographical scope. In addition, the elimination of tariff provisions, in accordance with Decree No. 3633/2000, and the consequent obligation of insurance companies to submit Technical Actuarial Notes (NTAs).

Amendment of resolution CNSP 321/2015

Amendment of CNSP Resolution 321/2015 which provides for technical provisions, assets reducing the need to cover technical provisions , risk capital based on underwriting, credit, operating and market risks, adjusted shareholders' equity, required minimum capital, regularization of solvency, limits of retention, criteria for the realization of investments, accounting standards, independent auditing and actuarial audit and Audit Committee for insurers, open private pension entities, capitalization companies and reinsurers. The changes are basically based on three points: 1) capital requirement; 2) Solvency settlement plans; and 3) retention limit.

Actuarial technical note of portfolio: end of obligation

Motion for a resolution to repeal the regulations dealing with this document and to end its mandatory referral and compliance with the requirements for the conduct of insurance business indicated by the International Association of Insurance Supervisors (IAIS).