A coalition of 18 international insurance associations recently sent a letter to the Brazilian government expressing continued opposition to Resolutions 232/11 and 225/10, each of which came into effect on March 31, 2011.  As previously reported here, Resolution 232/11 repealed Resolution 224/10 and provides that no more than 20% of the premium applicable to a contract may be ceded by insurance companies and local reinsurers to related companies or companies that belong to the same financial group based abroad.  Resolution 225/10 provides that local insurance companies will need to cede at least 40% of each reinsurance cession to local reinsurers, instead of merely providing a right of first refusal.

Pursuant to the letter, the insurance associations request the suspension of Resolutions 232/11 and 225/10 and invite the Brazilian government to continue its dialogue with the insurance industry to develop regulations for a strong and prosperous insurance and reinsurance market in Brazil.  For a complete copy of the letter, please click attached.