BRAZIL Trends and Developments Contributed by: Cassio Gama Amaral, Thomaz Kastrup and Pedro Ricco, Machado Meyer
• Participants – members of an association formed exclusively for mutual-aid purposes (can be individuals and/or legal entities). Participation is formalised via a membership agreement, under which each member commits to contribute the required amounts to cover any losses arising from the predefined risks of its members. • Association – responsible for admitting participants interested in sharing risks within mutual organisa- tions. It represents the participants and advocates for their interests before the managing company ( administradora de operações de proteção patri - monial mutualista ). • Managing company – a corporation whose exclu- sive corporate purpose is to manage mutual organisations. Its responsibilities include: (a) processing the membership of participants in associations and any respective cancellations; (b) calculating participant contributions; and (c) handling claims and the payment of indemnifi- cations. Associations and managing companies must enter into a service agreement detailing operational proce- dures and obligations. The managing company is lia- ble for losses and extraordinary expenses arising from operational failures, non-compliance with regulation, negligence, reckless management or misappropria- tion. The managing company can purchase insurance and reinsurance for risks arising from its own activi- ties, as well as those of mutual organisations. Each mutual organisation’s assets are separate from those of participants, the managing company, the association and other mutual organisations. These assets are indivisible vis-à-vis the participants and cannot be pledged, used as collateral nor included in the managing company’s bankruptcy estate. Membership is formalised via a membership agree- ment between the participant and the association, the instrument of which must define: • the rights and obligations of participants; • expense-sharing criteria;
SUSEP has structured a phased roll-out of compli- ance steps. Phase 1 requires existing mutual organi- sations to formally register with SUSEP, submitting their organisational documents compliant with LC 213, or to cease their current activities. Phase 1 ended on 15 July 2025. Phase 2 consists of the regulation of LC 213 by CNSP. SUSEP has recently opened a public consultation on the CNSP draft regulation governing mutual organisa- tions. While Phase 2 is undergoing, only mutual organ- isations that registered with SUSEP during Phase 1 will be able to continue operating. In the final Phase 3, mutual organisations will reach full regulatory compliance when their service agree- ments are included in SUSEP’s digital system. This step assumes managing companies are already duly licensed by SUSEP. The deadline for Phase 3 is yet to be determined by CNSP. The new legal framework for insurance co-operatives and mutual organisations marks a broader trend in the Brazilian insurance sector: the extension of regulatory oversight to alternative coverage models beyond clas- sic commercial insurance, signalling the diversification of risk-sharing mechanisms and new opportunities for market participation. Administrative disciplinary regime LC 213 has also reinforced SUSEP’s oversight author- ity by introducing significant changes to the admin- istrative disciplinary regime applicable to all entities regulated by said authority. Penalties imposed by SUSEP have been increased in the following manner: • the suspension of activities and disqualification of officers, for periods ranging from two to 20 years; and • fines of up to BRL35 million or an amount deter- mined based on the damage caused to consumers or the economic benefit of the wrongdoer. LC 213 further strengthens the legal framework governing settlement agreements entered into with SUSEP, which had previously been addressed only
• the covered properties; and • conditions for indemnification.
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