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3.November.2022

SUSEP publishes Circular No. 681/2022 and CNSP Resolution No. 450/2022 amending provisions on Open Insurance

On October 18, CNSP Resolution nº. 450 of 2022, was published. This had been edited by the National Council of Private Insurance (CNSP) (‘Resolution’), containing amendments to CNSP Resolutions no. 415/2021, no. 429/2021 and no. 393/2020. Circular SUSEP no. 681 of 2022 (‘Circular’), which amends some provisions of Circular SUSEP no. 635 of 2021.

The new rules deal with the implementation of Open Insurance as well as the accreditation and functioning of the companies initiating the insurance service to the system.

Both bring changes in terminology, which are highlighted below:

  • Change to the nomenclature: ‘customer order processing company’ (SPOC) is no longer ‘insurance service initiator company’ (SISS). This is conceptualized as one that provides data aggregation and sharing service, exclusively with the customer’s consent, or acts as a means of transmitting an order for services of initiation of movement without having resources for that except for possible remuneration for the service (items IV, V and IX of art. 2);
  • Movement initiation service: inclusion of the provision in the sense that the service will follow the legal provision and the specific normative device;
  • Personal insurance data: Exclusion of the mention of ‘data from records made by electronic devices on board connected or used by the customer’;
  • Change of nomenclature from Open Banking to Open Finance.

The new Resolution also adds new features to Open Insurance. These are:

  1. Anticipation of interoperability between Open Insurance participants and other Open Finance initiatives.
  2. Regarding the sharing of data and services, the introduction of two possible functionalities to SPOCs participating in the System:
    1. Through an initial structure responsible for governance, implement and maintain the technological standards, operational procedures and the standardization of the necessary layout of products. This is intended exclusively for the elaboration and commercialization of damage insurance contracts to cover major risks that are included in the branches or groups of oil, named and operational risks (RNO), global banking, aeronautical, maritime and nuclear risks, or, in the case of a PJ insured, domestic credit and export credit (item I of art. 2 of CNSP Resolution No. 407, from 2021) and,
    2. Exclusive products for the elaboration and commercialization of data insurance contracts to cover large risks classified in item II of art. 2 of CNSP Resolution No. 407, of 2021, the sharing of open data related to these products.
  1. Mandatory participation: Exclusion of companies exempted by Susep as long as they only sell damage insurance contracts to cover major risks in accordance with the specific regulations
  2. Requirements for accreditation and functioning of the SPOC. The new idea is that the insurance broker or legal entity duly qualified in SUSEP, can be accredited as a SPOC provided that requirements such as cyber security, governance, including data, conduct practices with regard to customer relationships and financial capacity.

Furthermore, the Resolution states that it is the broker’s duty to: (i) meet all the requirements for accreditation and operation established by CNSP Resolution nº. 429/2021 for SPOC; (ii) to have as its corporate purpose, exclusively acting as an intermediary in the contracting of insurance, capitalization and open supplementary pension products and the provision of service of initiation of movement in Open Insurance; and (iii) comply with current regulations relating to insurance brokers and Open Insurance

  1. Proof of compliance with the financial requirements established in Annex I of Resolution No. 429/2021. This was already required as documentation for SPOC accreditation. However, it must now be accompanied by proof of the origin and movement of the resources used in the composition of the share capital by all investors
  2. Documentation for SPOC accreditation: the statements signed by the president of the requesting company must contain the information that the interested party undertakes to meet the requirements regarding the practice of conduct regarding the relationship with the client established in Annex III of the amended standard.

Ultimately, the new regulation revokes item VIII of art. 4 and item ‘c’ of item II of art. 38 of CNSP Resolution no. 415, of 2021.

In addition to the new aspects present in the Resolution, the Circular provided for changes regarding the regulation of the guidelines established by the CNSP for the implementation of Open Insurance, changing the previous standard, namely, Circular SUSEP no. 415/2021. The main changes are:

  1. Establishment of dates for the implementation of the necessary requirements for data sharing regarding technological standards, operational procedures and layout standardization regarding the sharing of data on (i) customer registration and its representatives and (ii) related movements with insurance plans, open supplementary pension plans, financial assistance and capitalization of lines that already have operations registered in the Operations Registration System (SRO), by virtue of specific regulations, until the aforementioned date. They are:

 

Implementation by the governance structure and Initial registration of APIS

Expiration of API certificates

Registration of the client and its representatives, and transactions – Property branch – Residential Comprehensive 

1st September 2022

1st March 2023

All branches of the Patrimonial Group 

2nd November 2022

1st April 2023

All branches of the Liability, Financial Risk, Acceptance and Branch Abroad Groups Oil, Aeronautics, Maritime and Nuclear 

1st January 2023

1st May 2023

All branches of the Rural, Automobile, Transport and Property Branches – Miscellaneous Risks 

30th January 2023

15th May 2023

All branches of the Housing Group and Property branch – Extended Guarantee 

1st March 2023

30th May 2023

All branches of the People Group, micro insurance, open supplementary pension, financial assistance and capitalization 

1st April 2023

15th June 2023

  1. Provision, in Annex I, that the Secretariat must choose the candidates to compose a triple list, respecting the principles of motivation and transparency with the appointment of the independent director.
  2. Requirements for the selection process of candidates by the Secretariat, which are: (i) this must be documented and based on objective criteria and consistent with the attributes necessary for the proper performance of activities; and (ii) the appointment of candidates for the position of independent director to the Secretariat by the other directors is prohibited.
  3. Provision that the appointment of a director to SPOCs does not imply the appointment of an independent director, which will occur in the same way, observing in any case the majority rule by at least three votes mentioned in § 2 of Art. 12 of Annex I of the Circular.
  4. Regarding the maintenance costs of the initial structure responsible for governance, the Circular added an article explaining that the collection of charges resulting from default or arrears higher than those provided for by this Open Finance structure is prohibited.
  5. Complementation of Annex III, which deals with the minimum scope of data and services of Open Insurance: the services object of sharing, which appear in Resolution no. 415/2021, cover, at least: (i) contracting insurance, open supplementary pension plan or capitalization bond; (ii) endorsement; (iii) redemption of a pension or capitalization plan; (iv) portability of pension plan; (v) draw payment; and (vi) notice of claim.

Finally, the Circular revokes §2 of art. 4 and art. 5 of Annex III of Susep Circular no. 635 of 2021, which dealt with data recorded by electronic devices embedded, connected or used by the customer.

Both standards (CNSP and SUSEP) come into force on November 1, 2022.

Lefosse’s Insurance, Reinsurance and Private Pension practice will continue to follow the news and changes that impact the sector. For further information on this subject, or others that may be of interest to you, please contact one of our professionals below:

Luciana Prado
luciana.prado@lefosse.com

Tel.: (+55) 11 3024 6371

Tayná Ospedal
tayna.ospedal@lefosse.com

Tel.: (+55) 11 3024 6424

Jéssica Cândido
jessica.candido@lefosse.com


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