On August 29 2016 the Board of Appeals of the National System of Private Insurance (CRSNSP) shed light on the discussion surrounding the imposition of fines on insurers that conduct unauthorised business in Brazil.


The irregularity was discovered by the Superintendency of Private Insurance (SUSEP) when a beneficiary of a life insurance policy issued by the National Western Life Insurance Company filed suit in Brazil for payment of the insured amount, which had been administratively denied by the insurer. During the suit, it was verified that the insurer was not authorised to operate in Brazil. In light of this finding, SUSEP opened administrative proceedings against the insurer to investigate its conduct.

The insurer alleged that it neither operated in Brazil nor accessed the Brazilian market offering products. Despite this claim, during the evidentiary phase, SUSEP discovered that the insurer had more than 300 sales representatives in Brazil. SUSEP thus found the insurer to be operating in Brazil without authorisation and imposed a Rs11,738,534,400 fine.

Amended law

The CRSNSP partially granted the appeal filed by the insurer, limiting the fine to Rs3 million. The basis for the reduction was the recent legislative change set out in Decree-Law 73/66, which outlines Brazil's national system of private insurance. Law 13.195/2015 amended Article 113 of Decree-Law 73/66 to limit the fine imposed for unauthorised transactions to Rs3 million.

Until the publication of Law 13.195/2015, fines were unlimited and corresponded to the insured amount in each insurance policy that had been purchased without authorisation.

According to SUSEP, at the time Law 13.195/2015 was published, the purpose of the legislative change was to facilitate the enforcement of fines by increasing the amount of debts that SUSEP could collect, as enforcing excessive fines is difficult.

Although the administrative proceedings started in 2011 (ie, before the legislative change came into force), the CRSNSP held that the new law applied, as the principle that new laws should be applied retroactively where they are more beneficial than the previous law was relevant to this case.


The case is relevant because it has finally clarified the debate surrounding the imposition of fines on unauthorised insurers. Further, the case clarifies that fines for unauthorised operations are limited to Rs3 million, even where such operations took place before the 2015 legislative change.

For further information on this topic please contact Marta Viegas or Barbara Bassani de Souza at TozziniFreire Advogados by telephone (+55 11 50 86 50 00) or email (mviegas@tozzinifreire.com.br or bbassani@tozzinifreire.com.br). The TozziniFreire Advogados website can be accessed at www.tozzinifreire.com.br.

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