PREVIC updates deadlines and procedures of licensing requirements submitted by EFPC

The Brazilian National Superintendence of Supplementary Private Pension (“PREVIC”) published PREVIC Resolution No. 009/2022, with the purpose of updating the rules concerning the deadlines and procedures to be observed for administrative decision of licensing requirements submitted by the Closed Supplementary Private Pension Entities (“EFPC”).  

Accordingly, the new Resolution repeals Ordinance SPC No. 02/2004, Normative Instruction SPC No. 4/2004 and PREVIC Instructions No. 24/2020 and 38/2021, and introduces the following rules regarding the procedures and deadlines of licensing requirements: 

THE RULES THAT GOVERN LICENSING REQUIREMENTS 

• The EFPC must prioritize the principle of cost-effectiveness, analyzing only the documents and information necessary for verification. Furthermore, incomplete licensing applications can be returned without the initiation of proceedings;

THE ANALYSIS OF LICENSING REQUIREMENTS  

• The licensing requirements will be analyzed in two phases: the instruction phase, which involves the assessment of whether all requirements were met in regard to the necessary documents and information; and the decision phase, during which PREVIC’s final statement is issued;
• In the event that PREVIC makes a requirement during the instruction phase, the EFPC must meet such requirement within the following deadlines:
• 10 working days, for automatic licensing;
• 30 working days, for requirements concerning the qualification of directors;
• 60 working days, for other requirements.

The deadline will be counted down from the date of communication to the EFPC through the e-mail address registered with PREVIC and may be extended only once, for the same period, through communication to PREVIC prior to the day of expiration of such deadline. A subsequent extension of the deadline will require prior and express consent from PREVIC.

• During the instruction phase, the deadline may be paused if a requirement is submitted, or in the event of a new fact, act of god or force majeure or reasoned request from the EFPC–; or suspended – if there are circumstances that prevent the continuation of the analysis, if there is need to consult another department of PREVIC, or at the request of the Supervisory and Monitoring Board.
• After all necessary documents and information are submitted, PREVIC will inform the EFPC of the initiation of the decision phase.
  

OBLIGATIONS AND RIGHTS OF THE ENTITY 

• For licensing requirements that involve amendments to the status or a change of benefit plan regulation, the EFPC must:
• communicate the changes to participants and Assisted parties, at least 30 days in advance of their referral to PREVIC;
• request the express consent of sponsors or settlors and establish a deadline for such statement, which must not be less than 30 days. If there is no response within the deadline, the EFPC can consider the consent as tacit, except for sponsors governed by LC No. 108/2001. 
• Maintenance of the obligation for the EFPC to report the commencement of its operation or the benefit plan administered within 180 days.

AUTOMATIC LICENSING 

• Automatic licensing is the process through which the authorization takes place on the date of issuance of the licensing requirement instruction registration number logged by PREVIC’s computerized system. The new Resolution included two more automatic licensing requirement possibilities: 
• amendments to the benefit plan regulation solely to change the adjustment rate of the benefits of the plan; and 
• management transfer, through a standardized model.

FINAL AND TRANSITIONAL PROVISIONS 

• The EFPC must report any situation or dispute that may pose a risk to the completion of the licensing application.

The new Resolution will enter into force on July 01, 2022. 

Demarest’s Insurance, Reinsurance and Pension Plans team is available to provide more information on this and other related topics.