Brazil's Superintendencia de Seguros Privados (SUSEP) recently granted IRB Brasil Resseguros S.A. (IRB), the government-controlled entity that formerly held a reinsurance monopoly in Brazil, an extension of time through December 31, 2008 to conform to the new regulations that opened the Brazilian reinsurance market to local and foreign competition. In particular, rather than having to comply by October 17, 2008 with the regulations' requirement that risks only be retroceded to registered reinsurers, IRB will be permitted to retrocede risk to any reinsurer (including non-registered foreign reinsurers) through the end of the year.

Although the move was not entirely unexpected, it is a temporary setback in the path toward market liberalization and will delay more open competition among reinsurers that have recently been registered to do business in Brazil. Any further extensions would put into question the Brazilian government's commitment to a true opening of the Brazilian reinsurance market, despite the promising legislation and regulations previously enacted.

For a copy of the resolution announcing the extension, please click here.