SUSEP Circular No. 708/2024: Cancellation events and new requirements for product registration

The Superintendence of Private Insurance (“SUSEP”) published SUSEP Circular No. 708/2024, which provides for registering, suspending, canceling, and rejecting insurance, open supplementary pension, capitalization, and microinsurance plans.

SUSEP Circular No. 708/2024 provides a more explicit definition of product registration requirements. The circular also distinguishes between situations involving the suspension of commercialization, cancellation, and even rejection of new products.

Below is a list of the key changes that are in effect since January 01, 2025.

1. Product registration and modifications

Registration and approval

• Products not subject to prior approval can be commercialized as of the day following the registration date. In turn, products that are subject to prior approval can be commercialized as of the day following the date of approval;
• Examples of documents required for product registration and modification are also provided, such as:
  • Letter of recommendation;
  • Conditions or plan regulations;
  • Actuarial technical note; and
  • Parameter sheet and spreadsheet.
• Centralized product registrations must be carried out exclusively through the Electronic Product Registration System (“REP”).
• Supervised entities can only register a specific product if they are authorized to operate in the corresponding insurance line.
• As of the first sale of the product given, the supervised entities will have a 30-day term to report to SUSEP, via REP, on the effective commercialization date.
• A 10-day term was established for the supervised entity to respond to SUSEP’s inquiries regarding the registration of products that are not subject to prior approval.
• Once approved, the product will remain available for public consultation, even if it is subsequently canceled or permanently suspended.

Product modifications

• Modifying products will require submitting all the documents required for registration – which can be requested by the supervised entity or by virtue of SUSEP’s requirements.
• Products cannot have their specifications – such as insurance lines, sub-lines (divisions within lines), sub-type of processes, classes, and sub-classes – modified. The supervised entity is responsible for canceling the product as soon as it identifies any mistakes.
• When the product modification is approved, all prior versions will be discontinued, and their commercialization will be prohibited. This does not apply to the issuance of an individual certificate linked to a policy issued under a prior version.
• As for capitalization products, modifications can only be submitted for products that have not yet been commercialized.

2. Ban on the registration of new products 

• If the note certificate indicates certain situations, SUSEP can refuse to register the product. The impediment events listed in Article 8 and its subsections are as follows:
  • Failure or incomplete submission of the periodic information form (“FIP”), financial statements, or data that the supervised entity is required to submit;
  • Failure to submit documents involving general meetings and the appointment of managers;
  • Incorrect constitution of technical provisions;
  • Guarantee assets below the coverage of technical provisions;
  • Adjusted net worth (“PLA”) below the minimum required capital (“CMR”), except if the company has submitted a solvency regularization plan (“PRS”); or
  • Failure to offset the inspection fee.
• The company will be notified in advance regarding any product registration failure and must respond within 10 days. Registration will be maintained until regularization is proven, subject to SUSEP’s analysis.
• The product that is subject to prior approval – registered with the REP before any of the situations mentioned occur – will not be approved if, on the date that SUSEP concludes its analysis, the company falls under at least one of the impediment events.

3. Product suspension 

• The temporary suspension of product commercialization will be applied in the following situations, without prejudice to other reasons provided by a substantiated decision:
  • Commercialization of a product version that differs from that registered with SUSEP;
  • Irregular clauses representing an undue disadvantage to the insured;
  • Judicial determination;
  • Misconduct;
  • Documents containing inconsistencies as to the technical and actuarial principles or regulations in force;
  • Non-compliance with SUSEP’s requirements; and
  • Precautionary measure or preventive prudential measure.
• The revocation of the temporary suspension will occur after SUSEP approves the corrections submitted by the company.
• The circumstances for suspending product commercialization definitively are also established as follows:
  • Judicial determination;
  • Severe and insurmountable problems involving technical and actuarial inconsistencies or the regulations in force;
  • Failure to correct the inconsistencies indicated by SUSEP upon the product’s temporary suspension, after a 90-day term from SUSEP’s notification;
  • Capitalization product framed in the standard subtype, containing any inconsistency;
  • Products filed with coverage for a given business line for which the company is not authorized to operate; and
  • By virtue of a regulation.
• The definitive suspension of a product by the SUSEP is irrevocable and irreversible.
• Policies, tickets, individual certificates, participant certificates, and capitalization securities that are in force on the date of temporary or definitive suspension will remain valid until the end of the contracted term.
• As for endorsement or adjustable policies issued before the temporary or definitive suspension of the product, entries are permitted until the end of the contracted term.

4. Product cancellation 

• The company can cancel a registered product at any time, without justification, and its operation via REP will only be accessible by the supervised entity’s director.
• Cancellation is irreparable and irreversible and implies the commitment to no longer commercialize the product, issue or renew policies, tickets, individual certificates, participant certificates, or capitalization securities.
• For contracts executed before the cancellation of pension and personal insurance plans with group coverage for businesses, and which do not allow for executing further contracts: New participants/insureds can join as new employees are hired, with the respective issuance of individual certificates.

5. Rejection of products subject to prior approval 

• Products subject to prior approval can be rejected in the following events:
  • If the company does not reply to the inconsistencies reported by SUSEP after 90 days of such notification; or
  • If any requirement arises for the third time in a row after its versions are analyzed, and the company has failed to correct the inconsistencies indicated within the term given.
• Rejection of a product is irreversible.

SUSEP Circular No. 657/22 will be revoked as soon as SUSEP Circular No. 708/24 enters into force.

Demarest’s Insurance, Reinsurance, Health and Private Pension team is available to provide any further clarifications that may be necessary.