Brazil Opens Its Reinsurance Market

By Neil Montgomery, Partner and Head of Insurance and Reinsurance Practice Evy Cynthia Marques, Associate

The Vice-President of the Republic, José de Alencar, exercising the office of President of the Republic, sanctioned, on January 15 2007, Supplementary Law No. 126/2007 (the "Supplementary Law"), belatedly opening the Brazilian reinsurance market (which until then was monopolised by State-controlled IRB-Brasil Resseguros S.A.). The Supplementary Law deals with the reinsurance and retrocession policy and intermediation thereof, as well as with co-insurance, the contracting of insurance abroad and foreign currency transactions in the insurance markets.

In accordance with the Supplementary Law, the regulation of co-insurance, reinsurance and retrocession transactions and their intermediation will be the task for the insurance regulator, i.e., the National Private Insurance Council ("CNSP"). It is expected that CNSP will issue the regulations required under the Supplementary Law