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  • 27 March, 2020

CNSP Resolution No. 383/2020 Electronic System of Registry of Transactions (“SRO”)

On March 24th, 2020, SUSEP has published CNSP Resolution No. 383/2020 establishing the registration of insurance, reinsurance, private pension and capitalization transactions by means of the Electronic System of Registry of Transactions (“Sistema de Registro de Operações” - “SRO”, in Portuguese).

This system has been informally called by the regulator and the (re)insurance market as “Electronic Policy”.

According to the information provided by SUSEP in an event organized by the regulator in February, the purpose of this new Electronic System of Registry of Transactions is to (i) provide security and transparency to the (re)insurance market (including the regulator, the players and consumers) and (ii) guarantee more efficiency to the supervision carried out by the regulator.

Although the Resolution is silent in this respect, SUSEP disclosed during the event that such electronic system should replace FIP/SUSEP in the future.  

Please find below a summary of the most relevant provisions of the Resolution:

Supervised Companies: This rule applies to insurance companies, local reinsurers, private pension entities and capitalization companies (herein referred to as “Supervised Companies”). In principle, admitted and occasional reinsurers are not directly affected by such Resolution.

Electronic System of Registry of Transactions: Supervised Companies will have to register their operations within an electronic system previously homologated by SUSEP.

Registration Companies: The electronic systems will be managed by Registration Companies accredited with SUSEP, according to a procedure to be further regulated by SUSEP, by means of a new Circular which was not issued yet.   

Pursuant to the event carried out by SUSEP, up to last February there were three (3) registration companies offering such services: (i) B3; (ii) CERC; and (iii) CRDC.

Supervised companies cannot register their transactions with Registration Companies (i) over which they have control, meaning  directly or indirectly, individually or jointly with other shareholders (a) the right of shareholder of permanently assure the preponderancy of the corporate decisions and (b) the right to elect or dismiss the majority of administrators; and (ii) which ae controlled by the same entity as the Supervised Companies.

Identification number: Each transaction will receive a code, according to criteria available to SUSEP, which will permanently identify such transaction. All events and operations of a certain transaction must be registered within the same system and, in case of a migration to another system, the identification code of the relevant transaction will remain the same. 

Register: The registry must allow SUSEP to assess: (i) the main features of the risk (insured scope/object and hired coverages); (ii) financial flow; (iii) parties involved; and (iv) features of the events and/or operation of the transaction.

Surety Bonds: As per the information provided at the event carried out by SUSEP in February and confirmed through the Autarchy´s website, at a first stage, the electronic registry of operations will be compulsory for surety bond. The deadline for the sureties to adhere to this new system is not provided in this Resolution and will be further established by SUSEP in a new Circular.

 Other Lines of Business: The electronic system registry of other lines of business is facultative at a first and shall gradually become compulsory for other lines of business, becoming compulsory for the whole market within three (3) years, as of March 24, 2020.

Deadline for the registration of Events and/Transactions: The maximum deadline for the supervised companies to register their operations in the new system will be of 30 days, but the application of this maximum deadline, as well as the specific deadlines will be further regulated by SUSEP by an specific Circular. The system must always be maintained duly updated, according to those deadlines to be further established by SUSEP.

Supervised Companies’ Internal Systems: Supervised companies can continue operating their internal systems provided that they adopt conciliation procedure to reflect the same information in the electronic system.

Officer responsible for the Electronic Registration of Transactions: Supervised companies will have to appoint an Officer responsible for the company’s compliance with the electronic registration of its operations.

Transfer of portfolio: The registration of such transactions must made by the assignor and ratified by the assignee.

Mergers, acquisitions, incorporations and other corporate reorganizations: such transactions must be registered by the successor and ratified by the original supervised company.

Effectiveness of the Resolution: The Resolution comes into effect: (1) As of the date of its publication, on 03/24/2020, for SUSEP to publish specific rules regarding the accreditation of Registration Companies and (b) for the date where the mandatory register will come into effect; and (2) as of 04/01/2020, for the remaining provisions.