As previously discussed here, Brazilian law previously imposed a 10% limit on total annual premiums that a local insurer could cede to an occasional foreign reinsurer. On April 27, 2009, however, the Superintendencia de Seguros Privados (SUSEP), the Brazilian insurance regulator, relaxed that limitation significantly, but only as to two lines of business. By Resolution No. 203/09, published in the Diario Oficial on April 29, 2009, SUSEP raised the cession limit to occasional foreign reinsurers to 25% for surety and petroleum risk business.
Resolution No. 203/09, which became effective as of its publication date, did not indicate the reason for the special treatment of the surety and petroleum risk lines or indicate whether or not any similar relaxation of the cession limit can be expected in any other lines. Despite the lack of official comment, the resolution is likely the result of pressure from the local market due to insufficient reinsurance capacity for petroleum risk and surety lines from local and admitted insurers.
For additional coverage of the Brazilian insurance and reinsurance market, please click here.
For a copy of the officially published Resolution 203/09,please click here.