U.S. life and property casualty insurers, joined by others, are urging Brazil to stop restricting reinsurance access to only domestic reinsurers in one of the world’s leading emerging markets for insurance.
In comments filed with the SUSEP Nov.7, the Brazilian regulatory body which oversees insurance matters, the American Council of Life Insurers (ACLI), American Insurance Association (AIA), The Council of Insurance Agents & Brokers, Property Casualty Insurers Association of America, General Insurance Association of Japan Association of Bermuda Insurers and Reinsurers and the Risk and Insurance Management Society argued the country’s insurance resolutions are detrimental for Brazil and for the global insurance market. The European Insurance and Reinsurance Federation (CEA) has weighed in previously.
The Brazilian Parliament sent the matter to the Brazilian justice department, which is expected to rule on it soon, hopefully invalidating the measure, Smith said. Smith said the resolution appears on its face as unconstitutional.
Reinsurance risk is concentrated in the country due to the new resolutions, and capacity is shrunk as a result of the resolutions, insurers are concerned, more so now because reinsurance contracts are up for renewal at the beginning of the year.