SUSEP Circular No. 709/2024: procedural regulations governing administrative investigations

On December 18, 2024, the Superintendence of Private Insurance (“SUSEP”) published SUSEP Circular No. 709/2024, in order to fill the gap in article 88, paragraph 2, of CNSP Resolution No. 393/2020, to provide for the procedural regulations governing administrative investigations within the scope of SUSEP.

The new Circular seeks to standardize the procedures for initiating and judging administrative investigations, whether they originate from a complaint or arise from SUSEP’s own inspection and control, to ascertain materiality, authorship and liability for violations of the legal and/or administrative rules applicable to the activities under SUSEP’s supervision.

Investigations arising from complaints brought by consumers, beneficiaries and representatives will follow the procedures already defined in SUSEP Circular No. 643/2021 or a supervening regulation that replaces it.

The regulation assigned the initiating body the task of approving or dismissing the proposal to initiate the administrative investigation through a reasoned decision. In cases of approval, an ordinance to be published in the Internal Personnel Bulletin will be issued, which will include a report of the material facts, the names and qualifications of those being investigated, and a deadline for completing the work, limited to 120 calendar days, extendable for the same period on a single occasion.

In addition, the ordinance will indicate the members who will form the investigation commission to be established, its chairman and the purpose of the investigation intended during the course of the procedure.

The purpose of the investigation defined by the initiating body may be reformulated at the commission’s grounded request, provided that the changes are consistent with the purpose initially defined. Otherwise, the initiating body will reject the request, with the option of initiating a new procedure on the matter.

If the commission members disagree on the completion of the work, the initiating body will have the final decision on the conflicting point.

During the course of the administrative investigation, the investigation commission will have access to all resources allowed by law, including, for example, access to accounting documents, files, records, technical notes and other documents of the companies or entities subject to SUSEP’s supervision, as well as information stored with any SUSEP body.

Still within the scope of the investigation, the investigation commission may request data or information from systems, archives, records or files, seize documents evidencing, or indicative of legal or administrative infraction and carry out specific diligence in companies and entities supervised by SUSEP or in those involved in activities supervised by SUSEP without proper authorization.

The commission’s scope of action also includes assessing requests to carry out due diligence, which will be addressed to the chairman with a detailed and objective justification. If the chairman rejects the request, an appeal can be filed with the initiating body within five days following notification of the decision that rejected it.

Once the administrative investigation has been completed, the commission will issue the Final Investigation Report and submit it to the initiating body along with the supporting evidence for its conclusion, proposing that the procedure be closed or that the investigation be continued, with subsequent conversion to administrative sanctioning proceedings.

The Administrative Sanctioning Proceedings will be initiated by the initiating body when there are indications or elements of materiality, authorship and liability regarding the infractions found in the administrative investigation. On this occasion, the investigated parties will be notified for their knowledge and submission of a defense, if they so desire.

The investigation will be shelved on a reasoned basis when there is no administrative infraction or sufficient evidence to formulate an accusation, or if there is cause for preclusion of punishability.

Where applicable, the provisions of Federal Law No. 9,784/1999 apply to administrative investigations.

Finally, SUSEP Circular No. 709/24 has been in force since December 18, 2024, the date of its publication in the Federal Official Gazette, and will apply to cases in which the infractions occur after its entry into force. The entire regulation is available in this link.

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