The insurance broker profession is experiencing a transitional phase in the Brazilian legal system.
The Executive Order n° 905 issued by the President on November 11th, 2019, revoked the Law n° 4594/1964 and partially the Decree Law n° 73/1966, which used to regulate the broker insurance profession together with SUSEP administrative rules.
Currently, the insurance broker profession has been regulated by resolutions issued from the Brazilian Institute of Auto Regimentation of the Market of Insurance Brokers (IBRACOR), which has been recognized by SUSEP as the entitled association to auto regulate the profession.
Those resolutions replicated most of the rules already inserted on the revoked laws, but determined that on this transitional period only IBRACOR is entitled to grant license for new insurance brokers.
The new IBRACOR resolutions do not contain provisions about the sanctions to the insurance brokers who commits any infractions, creating a harmful gap on ongoing administrative proceedings, as well as measures yet to be applied on new disciplinary proceedings.
The Executive Order n° 905, however, is still not definitive and must be confirmed by the Congress until March 2020. On the meantime, many of lawsuits that question its constitutionality were filed in Brazil’s Supreme Court and are still pending of decision.
The decision of deregulating the insurance profession in Brazil has been taken in order to create more efficacy to the public management and concentrate efforts on activities that effectively demands specific regulation.
Even with this transition, the relevance of the broker for the insurance market in Brazil remains intact, especially in complex risks, considering the need of a technical assistance through the retaining of an insurance policy until the adjustment of a loss.