BRAZIL Trends and Developments Contributed by: Cassio Gama Amaral, Thomaz Kastrup and Pedro Ricco, Machado Meyer
Machado Meyer Ed. Seculum II – Rua José Gonçalves de Oliveira No 116 5º andar Itaim Bibi São Paulo 01453-050 Brazil Tel: +55 (11) 3150-7000 Email: bps.mkt@machadomeyer.com.br Web: www.machadomeyer.com.br/en
Developments in Insurance and Reinsurance in Brazil The insurance sector in Brazil is still undergoing a period of intense transformation, with a number of public initiatives designed to increase competition and foster innovation. As was the case last year, the private sector has risen to the challenge, dedicating a substantial portion of respective budgets to devel- oping new products/processes and enhancing long- standing practices. Modern technologies, such as artificial intelligence, blockchain and big data analy- sis, are increasingly being incorporated by new play- ers and traditional incumbents to improve efficiency, safety and customer experience in the Brazilian insur- ance market. This technological evolution is opening doors to new business models and innovative prod- ucts, shaping the future of the insurance sector in the country. This article looks back on the main legal initiatives launched (or otherwise consolidated) in Brazil over the past year, and their respective impact on the prospec- tive development of the local insurance market. The Brazilian insurance industry was expected to face a 3.7% contraction in 2025, a decline mostly explained by the increase in IOF tax (ie, the federal tax levied on various financial transactions, including insurance) and the partial freeze of agricultural insurance sub- sidies. In this context, the legal initiatives discussed below can play a pivotal role in expanding the insur- ance market in the upcoming year, especially those allowing new players such as insurance co-operatives and mutual organisations. On the other hand, the new
insurance law and its implementing regulation con- tinue to spark controversies. The new Brazilian Insurance Act Law No 15,040/2024 (the “Insurance Act”) consoli- dates and regulates each and every aspect of local insurance agreements, setting up new rules governing reinsurance transactions contemplating coverage for local risks. Following the enactment of the Insurance Act, the Bra- zilian Private Insurance Authority (SUSEP) has been working on the implementation of a series of measures to ensure that the current regulatory framework is fully aligned with the new law. Ongoing initiatives include a review of existing SUSEP and National Council of Private Insurance (CNSP) regulations, as well as the development of new rules, where necessary. As an example, SUSEP has recently launched a pub- lic consultation for a new regulation on property and casualty insurance ( seguro de danos ), including large risks. SUSEP has indicated that it might propose additional rules for large-risk insurance contracts dur- ing the current review of this type of product. This is a reassuring signal, as one big gap identified in the Insurance Act is the subjection of commercial/ financial line products (such as D&O, E&O and surety bonds) to the same rules and principles applicable to retail/affinity products. Corroborating the Insurance Act, and aiming to enhance transparency and reduce information asym- metry, the proposed regulation states that:
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