New regulatory rules on insurance distribution in Brazil

Published 24 January 2022

In line with Superintendence of Private Insurance’s (SUSEP) goals to simplify and consolidate the insurance regulation in Brazil, new rules applicable to insurance distribution were published at the end of 2021: (i) CNSP Resolution No. 431/2021 regarding insurance representatives; and (ii) CNSP Resolution No. 434/2021 related to policyholders of collective policies (“Estipulante” in Portuguese).

The most relevant amendments regarding insurance representatives brought by CNSP Resolution No. 431/2021 are highlighted below:

• Exclusion of the limitation of the insurance lines in which the insurance representative may act;
• Removal of the restriction for the representative to also act as a policyholder, since these two functions are not executed under the same insurance policy;
• Expansion of the insurance representative’s scope of action, allowing the possibility of rendering services to the insurance company, besides the offer and distribution of insurance.

On its turn, CNSP Resolution No. 434/2021 introduced the possibility of the policyholder acting on behalf of the insured group during the policy renewal, as long as the new contract does not imply in additional duties for the insureds or reduction of their rights.

In addition to such rules, SUSEP made available for public consultation new rules on personal insurances, whose purpose is to consolidate several different norms, strength the possibility of insurers creating their owns wordings and new products to fulfill consumer’s needs.

This movement of consolidation and alteration of rules, already implemented for damage insurances, is now being made by SUSEP in relation to the consumer lines of insurance, what may contribute to a more favorable environment for the development of competition and innovation in the sector.