CNSP defines guidelines for obtaining sustainability seal

On November 28, 2024, the Superintendence of Private Insurance (“SUSEP”) published CNSP Resolution No. 473/2024, establishing standards for insurance and open supplementary pension products to be classified and marketed as sustainable, consistent with the Ecological Transformation Plan implemented by the Federal Government.

The Ecological Transformation Plan aims to shift economic, technological, and cultural paradigms in favor of development based on sustainable relations. To this end, the plan encompasses a set of fiscal, tax, regulatory, and financial measures to encourage the allocation of public and private funds into activities considered sustainable—capable of reducing environmental and climate risks.

From this perspective, SUSEP published CNSP Resolution No. 473/2024, following a public consultation through Notice No. 6/2024, to define the list of economic activities considered sustainable and that may be associated with insurance and open supplementary pension products.

The new regulation governs the circumstances in which insurers and open supplementary pension entities (“EAPCs”) can associate insurance advertising names and materials or pension plans with “ESG”, “environmental,” “green,” “social,” or “sustainable” seals.

In this regard, an insurance product can only be classified as sustainable if the coverage, assets, rights, or guarantees offered can generate climate, environmental, or social benefits for policyholders, beneficiaries, or society (Article 3).

In addition, both insurance products and plans with survivor coverage for personal insurance and open supplementary pension can be classified and traded as sustainable if the funds from the Mathematical Provision for Benefits to be Granted (Provisão Matemática de Benefícios a Conceder) are invested in Specially Constituted Investment Funds (“FIEs”) that, according to the Brazilian Securities and Exchange Commission (“CVM”) regulations, can be classified as sustainable, social or ESG-related (Article 4).

The regulation also prohibits insurance companies and EAPCs from using expressions that mislead applicants or policyholders and plan participants as to the sustainable nature of these products and further establishes that their regulations and contractual conditions must outline (Articles 5 and 7):

• the climate, environmental, or social benefits expected from trading the product;
• the target audience and its compliance with the coverage offered; and
• the methodologies, principles, and guidelines used to classify the plan according to its description as sustainable.

Classifying insurance and open supplementary pension plans as sustainable will be the duty of the director appointed as technical manager by the supervised entity. The internal audit of insurers and EAPCs must monitor such activity annually (Articles 8 and 9).

The registration of the insurance and supplementary pension plan with SUSEP must also specify its classification as sustainable (Article 10).

Finally, insurers and open supplementary pension entities will be subject to administrative sanctions if they classify, market, or maintain products that do not comply with CNSP Resolution 473/2024 (Article 11).

CNSP Resolution No. 473/2024 will enter into force 180 days after the date of its publication.

Demarest’s Insurance, Reinsurance, Health and Private Pension team is monitoring all developments of this regulation and remains available to provide further clarifications.