SUSEP Public Consultation: new rule on insurance lines codes

On September 29, 2022, the Superintendence of Private Insurance (“SUSEP”) opened Notice No. 013/2022 for public consultation, introducing a draft SUSEP Circular.

The goal is to simplify the current regulatory framework on insurance lines codes and classification of coverage, aligning it with recent SUSEP Circulars No. 621/21 (insurance against damage) and No. 657/22 (product registration).

Regarding this public consultation, we highlight the following changes:

• the new draft Circular amends SUSEP Circular No. 535/16 and is aligned with SUSEP Circular No. 621/21 – which provides for the combination of coverage from different lines of insurance – through excluding the rules on the development of insurance products from its scope;

• introduction of two annexes:
  Annex I – related to the Table of Insurance Classifications and Lines, which implements the new classifications; and
  Annex II – related to the Table of Insurance Migration, which addresses lines of runoff insurance;

• in rural insurance, due to the loss of relevance of the Rural Insurance Stability Fund (“FESR”) and new investments in the Rural Insurance Premium Program (“PSR”), the classification in accordance with the FESR was abandoned, establishing, as a result, a special monitoring system for insurances that belong to the PSR;

• the new agricultural, livestock, aquaculture and forestry insurance operations will be counted within lines 1111 to 1118, depending on whether they are entitled to the benefit of the insurance premium grant (federal, state or municipal), ceasing to contemplate rural insurance lines 1101 to 1108;

• exclusion of the Rural Product Note Insurance, in light of the decreasing interest of the market on the trading of such insurance product;

• with regard to the International Land Transport Agreement (“ATIT”), the draft provides for the creation of two lines that can satisfy the accounting procedures of all international agreements – existing or future – of which Brazil is a party, which are:
  Civil Liability – Passenger Vehicles – Agreements outside the ATIT; and
  Civil Liability of the Carrier with land vehicle – International Travel – Agreements outside the ATIT;

• exclusion of the definition of Main Line provided for in the current regulation, in favor of a general accounting rule within the lines relevant to each specific coverage;

• nomenclature change of line 1985, from “Health – Local Reinsurer” to “Health – Reinsurance”, in order to encompass the accounting of operations of all types of reinsurers (local, admitted and occasional).

The new rule aims at repealing:

• SUSEP Circular no. 535/2016;
• SUSEP Circular no. 550/2017;
• SUSEP Circular no. 554/2017;
• SUSEP Circular no. 579/2018;
• item XII of article 63 of SUSEP Circular No. 621/2021;
• Articles 18 and 19 of SUSEP Circular No. 639/2021.

The draft can be read in full at:

Draft Circular.

Demarest’s Insurance, Reinsurance, Health and Private Pension team will follow-up on the public consultation up the publication of its final text, and remains available to provide any further clarifications that may be necessary.