Notes on the Brazilian Insurance Law bill

New Insurance Law Bill

Since 2004, a proposed new Insurance Law (the Legislative Bill No. 29/2017) has been under discussion and consideration by the Brazilian Congress. It was approved by the Chamber of Deputies, and Senate, now at final stages of approval. This Bill aims at providing a legal framework for insurance and reinsurance in Brazil, revoking the insurance provisions currently set out in the Brazilian Civil Code and further regulations enacted by the National Council of Private Insurance (Conselho Nacional de Seguros Privados, CNSP), and by the Brazilian Superintendence of Private Insurance (Superintendência de Seguros Privados, SUSEP), the authorities supervising the reinsurance and insurance sector in Brazil.

The discussions regarding the Bill are taking place 20 years after it was first proposed and after major changes in the Brazilian insurance sector in the country, as it undoes some positive developments in Brazilian insurance law over the last 20 years. Previous changes, which are currently in force in Brazil, include the opening of the reinsurance market, less regulation where possible and alignment with international market practices such as the operation of supervised entities, the process to commercialize insurance products for large insureds, liability on the transfer of portfolios, amongst many others.

These earlier changes ensured that the Brazilian insurance sector fostered innovation, catered for the needs of those individual insureds, had flexibility and was less bureaucratic.

 

Changes brought by the new Bill

With the change of current provisions, the Bill would bring (again):

• The requirement of prior approval for the offering of insurance products.
• Impose new liabilities to the transferor of a portfolio.
• Impose changes to arbitration provisions of (re)insurance matters.
• Impose changes to arbitration provisions of (re)insurance matters, and impose conditions to reinsurance agreements, amongst other changes.

In many ways, the bill does not reflect those significant improvements brought by the current insurance and reinsurance regulatory framework and represents a setback to the insurance sector.

The Senate has recently received some amendments to the original wording of Bill and it expects to approve this new Bill in early 2024.

Our Insurance team in Brazil are monitoring the next steps of the approval. Please feel free to contact us if you have any questions on how this new Bill could impact your business or operation in the country.