The Brazilian federal government has reportedly decided to reduce its control of the nation’s former reinsurance monopoly holder, IRB Brasil Re, in a move that some are referring to somewhat misleadingly as “privatization” of the entity.  The government would reportedly maintain significant control of the entity through a “golden share” arrangement, but would reduce its equity position in the entity below the majority ownership that it currently maintains.

Under the reported plan, however, the federal government’s majority interest in IRB Re Brasil would be transferred to the Banco do Brasil, which is also federally-owned.  It is not at all clear that the private interest in the entity, currently at 41% split among a number of private insurance companies, would change at all, though there is some discussion in media reports of “greater private participation” in the entity in IRB Re Brasil in the future.

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