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SUSEP publishes notice of public consultation on insurance brokers, self-regulatory entities and educational institutions
On December 9th, the Superintendence of Private Insurance (SUSEP) published Public Consultation Notice No. 22/2022 referring to the draft CNSP Resolution dealing with insurance, capitalization and open private pension brokers, entities self-regulatory authorities in the brokerage market and educational institutions authorized to teach courses and hold exams for insurance brokers.
In the announcement, SUSEP justifies the need for a new standard because currently there is not a single source dealing specifically with these topics. As things stand, it is possible to find information listed in different regulations, which makes it difficult for users to implement and understand the rules. In addition, the new guideline is in accordance with current legislation – namely Law No. 14,430 of August 3, 2022 – which assigned the insurance broker a clearer role focused on the applicant/insured as well as important contributions from the Insurance Market Initiative (IMS).
Initially, the resolution provides for the qualification and registration processes for insurance brokers, continuing education, suspension and cancellation of broker and commission registration.
Technical-Professional Qualifications
- Proof of completion of high school is a basic requirement for enrollment in the National Examination or the Technical-Professional Qualification Course for Insurance Brokers
- Technical-professional qualification will be granted after passing the National Technical-Professional Qualification Exam for Insurance Brokers OR Technical-Professional Qualification Course for Insurance Brokers at an institution accredited by SUSEP
- There are two ways of carrying out the technical-professional qualification of the insurance broker
- ‘Full qualification’ enables the broker to intermediate damage insurance, personal insurance, pension plans and capitalization plans
- ‘Specific qualification’ allows the broker to operate in specific segments or modalities according to their interest. For this category, SUSEP will determine which lines of insurance and types of insurance will be authorized.
Professional Registration of the Insurance Broker
- The insurance broker’s professional registration will be granted by SUSEP or by a self-regulatory entity after which he/she will be qualified in accordance with legislation
- Articles 6 and 7 of the resolution address the basic requirements for granting insurance broker registration both for individuals and legal entities
- Art. 8 of the draft provides for the necessary conditions for partners, directors and administrators of insurance brokers and legal entities
- In order to grant registration, insurance brokers – both individuals and legal entities – must register in accordance with the rules set by SUSEP
- Any documents and information deemed necessary and that prove the conditions listed in articles 6, 7 and 8 of the draft may be requested. These must be available for inspection by SUSEP
- In order to assess the reputation of the partners, directors and administrators of insurance brokers, the following may be considered a) criminal proceedings to which they are responding, or any company of which they are or have been, at the time of the facts, controller or administrator; and, b) judicial or administrative proceedings related to the National System of Private Insurance or the National Financial System, or with PREVIC, ANS and CVM.
- It is the obligation of the insurance broker, individual or legal entity, to keep the register up to date. Furthermore, SUSEP or self-regulatory entities may carry out periodic re-registration of insurance brokers (either natural or legal entities), observing the provisions defined by SUSEP for validating the registration.
Cooperatives of Insurance Brokers
- It is the duty of insurance brokers’ cooperatives to comply with the principles of membership. This includes voluntary withdrawal of members, democratic control with the prohibition of multiple votes, economic participation and autonomy, and independence and inter-cooperation in relation to other entities
- The cooperative society of insurance brokers is prohibited from registering if there are natural or legal persons without registration as insurance brokers among its members.
- Only duly qualified insurance brokers can be partners of the insurance brokerage companies participating in the cooperatives
- Insurance brokers who have their registration suspended or canceled must be excluded from the cooperative
- Insurance companies, open complementary pension funds or capitalization entities cannot pay a commission to cooperative societies that have among their members insurance brokers with suspended or canceled registrations
- For the granting of registration, the requirements of Federal Law No. 5,764 of December 16, 1971, must be observed as well as the regulations of the CNSP and SUSEP applicable to other brokerage companies that are not incompatible with their nature.
Continuing Education of Brokers
- The insurance broker must participate in continuing education courses offered by teaching institutions accredited by SUSEP
- In addition to the current requirements of art. 67 of the draft, the authorized educational institutions must also meet a) minimum and proven experience of 2 (two) years in carrying out training focused on the insurance market and/or the financial market b) ability to offer courses in distance learning and/or in the face-to-face lessons c) have a faculty composed of qualified professionals
- SUSEP is responsible for defining and periodically updating the minimum content of the courses, and accredited institutions will be responsible for carrying this out.
Suspension and Cancellation of Professional Registration
- Suspension and cancellation of registration may occur at the interest of the broker or third parties, or ex officio by SUSEP
- Suspension of registration for self-interest may be carried out at any time by the insurance broker, an individual, or by the administrator or technical director in the case of a legal entity
- Cancellation for self-interest must be requested from SUSEP only if a) if there is a change of object, social termination or termination in the case of a legal entity b) if there is death or civil incapacity in the case of a natural person.
- SUSEP will carry out the ex officio suspension of registrations in the following cases a) outdated or pending registration at SUSEP b) non-compliance with the conditions established in arts. 6th, 7th and 8th of the draft c) circumstances that affect the unblemished reputation of the partners, directors and administrators of insurance brokers, legal entities d) false statements or documents presented e) application of an administrative sanction
- Cancellation by letter may be carried out by SUSEP a) by tacit consent when there is no manifestation of the insurance broker within 180 (one hundred and eighty) days after the suspension of registration in the hypotheses listed in items I to IV, of art. 20. In this case, the insurance broker may obtain a new registration provided that the requirements set forth in this Resolution are met b) by application of administrative sanction. Here, the insurance broker may obtain a new registration provided that the legislation on penalties regulated by the CNSP is complied with c) by verifying the hypotheses provided for in items I and II, of art. 21.
The commission
- In case of cancellation of the insurance policy, as well as in cases of return of the premium, the broker must refund the commission received to the insurer proportionally to the amount returned or not received by the insurer. This also applies in cases of cancellation of the policy resulting from the decree of extrajudicial liquidation of the entity supervised by SUSEP.
In addition to these provisions on brokers, the draft deals with agents who are natural or legal persons appointed by the insurance broker under their sole responsibility. For this function, articles 24 to 29 of the resolution must be observed. The main points are:
- Limit of 10 agents appointed by the natural person broker
- The insurance broker must register the agent as defined by SUSEP
- SUSEP at any time may request from the insurance broker supporting documents of the agents who are under its responsibility
- Agents are prohibited from acting independently in the insurance brokerage market
- It is the broker’s responsibility to ensure that its agents have the necessary conditions to carry out the activity
- The registration of representatives who do not comply with the conditions necessary for the exercise of activities will be excluded from SUSEP
- Immediately an insurance broker becomes aware of the non-compliance of the conditions necessary for the exercise of the activity by the agent, the broker must exclude the agent’s registration with SUSEP
- If there is an administrative irregularity, the agent will be subject to the initiation of a sanctioning administrative process applied by SUSEP without prejudice to the insurance broker responsible for the registration.
Regarding self-regulatory entities, the new rule determines that their main objective is to qualify, register and supervise members of the insurance brokerage market as auxiliary entities of SUSEP. ‘Chapter IV’, Sections I to XI deal specifically with the subject and we have noted the following:
- In order to act as a self-regulating entity in the brokerage market, entities must submit a prior authorization request to SUSEP proving a) that they are duly constituted pursuant to this resolution b) that have at least 10,000 members – this must be verified by an independent auditing company and must be registered with the competent registry of legal entities and updated every 2 years c) have self-regulation as their object d) declare that, whenever requested, they will provide necessary information to SUSEP
- After SUSEP’s favorable response to functioning as a self-regulatory entity, interested parties will have a period of 90 (ninety) days to formalize the acts of operation and election of the first administrators and other members and submit them to SUSEP’s approval
- The bylaws of self-regulatory entities must be registered at the civil registry office of legal entities are prohibited to any activities related to self-regulation that is not specified in the bylaws
- As for the entity’s associates, the membership may be composed exclusively of members of the brokerage market and entities that legally represent its interests
- Entities may not refuse to enroll a member of the brokerage market in their ranks unless a) the member has committed a crime or infraction, administrative or statutory, or is subject to exclusion under the terms of the respective statute in the last 5 years b) failure to obtain a technical-professional qualification based on the completion of a specific test or proof of professional experience in the statutory form c) failure to obtain certification pursuant to current legislation and regulations.
- Compulsory exclusion from the entity’s staff will only be admissible with just cause. For example, non-renewal of certification as defined by SUSEP
- Persons whose nomination has been authorized by SUSEP will be elected to statutory positions. This is not applicable in cases of re-election or when the nominee held positions in the last 6 months even in another self-regulatory entity authorized by SUSEP
- If SUSEP does not manifest itself on the nomination, the entity will be able to carry out the election or nomination in 60 (sixty) days. If there is a dispute, the self-regulatory entity must carry out the election within 90 (ninety) days
- The self-regulatory entity can only be terminated after fulfilling all its obligations and concluding all its work in progress – except in case of transfer of its attributions to another self-regulatory entity authorized to operate. At the end of its activity, its assets and remaining resources will be allocated to another self-regulatory entity if the members do not decide otherwise.
Finally, regarding Educational Institutions, the new norm determines that the National Technical-Professional Qualification Examination for Insurance Brokers and the Technical-Professional Qualification Course for Insurance Brokers must be carried out by educational institutions duly accredited by SUSEP.
We have noted that:
- The National Technical-Professional Qualification Exam for Insurance Brokers must be taken twice a year
- It is the duty of the educational institution to make available to SUSEP and the self-regulatory entities the list of candidates approved in the exams and courses they promote
- Teaching institutions are allowed to provide the Technical-Professional Qualification Course together with trade unions and other entities that are willing to sponsor it. This can be achieved through agreements or conventions guaranteeing the prior setting of the curriculum and teaching programs.
The draft proposes the revocation of the following provisions: CNSP Resolution No. 175, of December 17, 2005; CNSP Resolution No. 233, of April 1, 2011; CNSP Resolution No. 244, of December 7, 2011; CNSP Resolution No. 249, of February 15, 2012; CNSP Resolution No. 251, of April 9, 2012; CNSP Resolutions No. 252, of April 20, 2012; CNSP Resolution No. 258, of July 5, 2012; CNSP Resolution No. 278, of January 30, 2013; CNSP Resolution No. 295, of October 25, 2013; CNSP Resolution No. 303, of December 16, 2013; CNSP Resolutions No. 307, of April 23, 2014; CNSP Resolution No. 310, of June 16, 2014; CNSP Resolution No. 318, of December 12, 2014; and CNSP Resolution No. 334 of December 9, 2015.
Interested parties should send their comments and suggestions to the draft by 12/26/2022, by email to cgraj.rj@SUSEP.gov.br, using the specific standardized table available on the SUSEP website click here
Lefosse’s Insurance, Reinsurance and Private Pension practice will continue to follow the news and changes that impact the sector. For further clarification on this subject, or other areas that may be of interest to you, please contact one of our professionals.
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