Complementary Bill No. 101/2023 (PLP), attached to PLP No. 519/2018 authored by former deputy Lucas Vergílio, appears as a proposal to promote a significant expansion of the participation of cooperative societies in the insurance market. In addition, it proposes significant changes regarding the penalties applicable in the event of violations of the rules related to insurance, coinsurance, reinsurance, retrocession and capitalization activities, including, without limitation, operations carried out in said markets without proper authorization.
Awaiting consideration by the plenary of the Chamber of Deputies and being processed on a priority basis, the PLP proposes changes to Decree-Law No. administrative damages due to violation of rules related to insurance, reinsurance, coinsurance, retrocession and capitalization activities.
The main innovations proposed by the PLP are highlighted below:
Regarding Cooperative Societies:
- Except when expressly waived, cooperative societies must comply with all rules applicable to insurance companies, whether they are provided for in Decree-Law No. 73/66, established by the National Council of Private Insurance (CNSP) and/or by the Superintendence of Private Insurance (Susep).
- The cooperative insurance society must be created with the specific purpose of offering insurance services. Its activities are restricted to the commercialization of agricultural, health and work accident insurance exclusively for its associates, in addition to being able to operate in the lines of insurance specifically established by the CNSP.
- The commercialization of private pension plans is reserved for insurance companies, structured in the financial regimes of capitalization and allocation of coverage capital.
Regarding Administrative Penalties:
- The PLP requires that certain points be observed for the application of fines to agents who may operate in the insurance market irregularly. That is without proper authorization from the regulator, the principles of proportionality and reasonableness, the economic capacity of the offender/responsible and the reasons for this.
- There is a proposal to increase the amount of the fine to be applied in case of infractions to the rules of the (re)insurance market and irregular operations. The Government justifies that what appears in the current item IV of article 108 of Decree-Law nº 73/66 is out of date and therefore, the new proposal foresees that this penalty does not exceed the maximum amount (i) BRL 50,000,000,00 (fifty million reais); (ii) double the amount contracted or the irregular operation; (iii) 3 (three) times the amount of the amount illicitly enriched or the loss avoided as a result thereof (iv) double the damage caused to consumers as a result of the offense;
- As an alternative to administrative sanctions, the PLP proposes the inclusion of article 118-A, which allows SUSEP to sign a term of commitment with the offender/responsible, following the guidelines of the CNSP and respecting the applicable legal prohibitions. In addition, the choice for the consensual agreement must be duly justified and aligned with the public interest. It is important to point out that the term of commitment, when signed, constitutes an extrajudicial enforceable title, but its execution does not imply confession of the facts discussed, nor recognition of the illegality of the conduct under analysis.
- During the effectiveness of the term of commitment, the deadlines established in Law No. 9,873 of November 23, 1999, which regulates the statute of limitations for the exercise of punitive action by the Federal Public Administration, will be interrupted. Furthermore, if all the conditions stipulated in said term are met, the administrative procedure will be filed.
- In the event of non-compliance with the commitment, Susep will take both administrative and judicial actions, and will determine the opening of an administrative proceeding in order to ensure compliance with obligations and continue with the application of due punishments.
Finally, the PLP proposes the repeal of the sole paragraph of Articles 4, 24 and 102, as well as Article 105 in its entirety. Furthermore, the intended Complementary Law will enter into force on the date of its publication.
The proposal is in line with the regulatory agenda regarding the capillarization of the insurance offer in the country, in addition to being able to significantly change the inspection environment and the application of penalties, in view of the significant increase in the amounts of applicable fines.
Lefosse’s Insurance, Reinsurance and Private Pensions Team closely monitors the changes that impact the Brazilian Market. For further clarification on this matter, or others that may be of interest to you, contact our professionals.
