The Broker x Regulation (CNSP/SUSEP)

The Reinsurance Brokers
and the New Brazilian
Reinsurance Market
Carlos Alberto Lenz César Protasio
Chairman
Orypaba Rio Administração e
Corretagem de Resseguro Ltda / JLT RE
Member of ABECOR-RE, Brazilian Association of Reinsurance Brokers
September 2008
The Broker x Law 126/2007
The intermediary (RI Broker) shall be a brokerage company
authorized to intermediate reinsurance business, and
covered by a professional liability insurance policy
(as defined by the insurance regulating body), having a
specialist licensed insurance broker as its general
and/or operational manager
Reinsurance contracts with intermediation of RI brokers
cannot have clauses limiting a direct relationship between
cedent and reinsurer.(art. 15). An intermediation Clause
must be included defining whether the broker is authorized
to collect the RI premiums or RI recoveries (art.16)
The Broker x Law 126/2007
If the reinsurance broker is authorized to collect reinsurance
premiums and recoveries, the following will apply:
I – Payment of the reinsurance premium by the ceding to the
broker is deemed to be payment to the reinsurer; and
II – Payment of reinsurance recoveries by the reinsurer to
the broker is deemed to be payment to the cedent only
to the extent that the cedent effectively receives such
payment (art 16)
The Broker x Regulation (CNSP/SUSEP)
The operation of reinsurance brokerage companies’ depends
upon previous and express authorization of SUSEP
Conditions for operation
Publication of declaration of purpose.
1
2
Disclosure of the structure of the group which
controls the company
Express authorization for disclosure, to Brazilian
authorities, financial figures and operational
information of the business made in Brazil
Resolution No. 173
The Broker x Regulation (CNSP/SUSEP)
Organization as a corporate stock company (sociedade
anônima) or a limited partnership (sociedade limitada),
according to the Brazilian Civil Code
The beginning of operation must be in ninety days maximum
from the publication of the operating authorization act
Professional Civil Liability Insurance Policy,
with a BRL10.000.000,00 minimum indemnification limit, or
equivalent amount in other foreign freely convertible currency
The Broker x Regulation (CNSP/SUSEP)
The technical representative referred to in this article must be
an insurance broker duly accredited,
Brokers Obligations to Clients
Remit to Brazilian cedents:
1
Until the beginning of the risk, confirmation of
reinsurance coverage, with its pertaining conditions,
along with the percentages of acceptance per reinsurer
2
In up to five working days, from the date of
formalization, the cover notes documenting the
reinsurance and retrocession operations and contracts,
regularly signed.
The Broker x Regulation (CNSP/SUSEP)
Brokers Obligations to Clients (cont.)
Grant the cedent access to all information available on the
reinsurers in which the risks intermediated have been
placed, either in automatic or facultative contracts; and
Disclose to all parties involved the information that the
reinsurance brokerage company is affiliated to an insurance
or reinsurance company, if that is the case.
The Broker x Regulation (CNSP/SUSEP)
Brokers’ other Obligations
The Brokers and the additional regulation
(CNSP and SUSEP)
shall keep, in Brazil, current accounts for the intermediation
of reinsurance and retrocession. As per CMN Resolution
number 3525 (three five two five) dated December 2007
The accounts referred to in this article must be used solely
for the payments and receipts relative to the reinsurance
and retrocession transactions intermediated
The Broker x Regulation (CNSP/SUSEP)
Brokers’ other Obligations
The reinsurance brokerage company shall keep in file in
magnetic or electronic media, provided the applicable legal
and regulatory provisions are complied with the documents
proving the reinsurance and retrocession operations
intermediated by the company, in which the acceptance
of the reinsurers must be registered, as well as:
Business communications and mail
Proof of reinsurance placements
Statements of premiums and indemnities flow
Current account statements
Previous Conditions
Before the end of RI monopoly, brokers were not allowed to
intermediate business between insurance company and
IRB-Brasil Re
50% of IRB’s retrocession was, and still is, through brokers
In 2007 there were 28 brokers working with IRB,
placing retrocession (contracts and facultative)
in the international market
The amount of business placed in 2007 through
brokers was around BRL 800 M (US$ 500 M)
POLÍTICA DE COLOCAÇÃO DE RISCOS NO EXTERIOR
Total de Participação de Resseguradores e de cada Corretor nas Retrocessões
(Facultativos + Contratos)
Abril/2008
PARTICIPANTE / BROKER
CÓDIGO / CODE
Percentuais / %
Jan/08 a Apr/08 Apr/07 a Apr/08
AON GROUP
DVS
10,7169
10,1083
GUY CARPENTER -MMC
WILLIS FABER GRUPO
DVS
DVS
7,4776
5,2092
8,6693
6,1549
ISB -INTERNATIONAL SPACE BROKERS, INC.
24384
4,1824
4,4949
JARDINE LLOYD THOMPSON
DVS
5,0622
4,3073
COOPER GAY & CO. LTD
HSBC INSURANCE BROKERS
24341
DVS
2,1456
2,2613
2,5228
1,3818
CATALYST RE CONSULTING L.L.C.
24139
1,3112
1,3281
BENFIELD GREIG GRUPO
DVS
1,1981
1,2917
NHM -NAUSCH, HOGAN & MURRAY (UK)
MILLER INSURANCE GROUP
25615
24023
2,6456
0,6972
1,1949
1,0016
ARTHUR J. GALLAGHER (UK) LTD
23051
0,566
0,8616
LOCKTON COMPANIES INTERNATIONAL LTD
MEXBRIT REINSURANCE INTERMEDIARIES
24678
23604
1,4952
0,1043
0,812
0,5959
PEARSON WEBB SPRINGBETT LTD
13021
0,7727
0,5885
COLEMONT INSURANCE BROKERS LIMITED
26026
0,9043
0,5048
UNITED INSURANCE BROKERS LIMITED -UIB
26042
1,1199
0,4104
POLÍTICA DE COLOCAÇÃO DE RISCOS NO EXTERIOR
Total de Participação de Resseguradores e de cada Corretor nas Retrocessões
(Facultativos + Contratos)
Abril/2008
PARTICIPANTE / BROKER
CÓDIGO / CODE
MCGRIFF, SEIBELS & WILLIAMS OF TEXAS
WELLS FARGO RE, INC
RIMACO RISK MANAGEMENT CO. S.A.
ROPNER INS.SERVICE LTD.
BMS INTERNATIONAL INTERMEDIARIES LTD
HEATH LAMBERT GRUPO
24406
25569
22047
18520
25747
DVS
TYSER INTERNATIONAL INS & REINS BROKERS
IBS -REINSURANCE BROKERS SINGAPORE PTE
BESSO LIMITED
CIRCLES GROUP S/A
SWINGLEHURST LIMITED
LSR -LONDON SPECIAL RISKS LIMITED
NMB -NEWMAN MARTIN AND BUCHAN LIMITED
MARSH & MCLENNAN COM
18554
25992
25917
26000
25691
26034
25542
DVS
Percentuais / %
Jan/08 a Apr/08 Apr/07 a Apr/08
0,0294
0,4085
0,6662
0,3452
0,3141
0,1974
0,3209
0,1626
0,0196
0,139
0,0292
0,1131
0,1029
0
0,0147
0,0259
0,0151
0,0128
0
0,0034
0,072
0,0245
0,0231
0,0131
0,0087
0,0047
0,0028
0
SUBTOTAL
49,4238
47,7436
RESSEGURADORES DIRETOS / DIRECT RI
50,5762
52,2564
100
100
TOTAL (COR+RESS)
Top 10 Brokers
AON GROUP
GUY CARPENTER - MMC
WILLIS FABER GROUP
JARDINE LLOYD THOMPSON / ORYPABA RIO
ISB - INTERNATIONAL SPACE BROKERS
COOPER GAY & CO. LTD
BENFIELD GREIG GROUP
MILLER INSURANCE GROUP
HSBC INSURANCE BROKERS LTD/CAPITAL RE
ARTHUR J. GALLAGHER (UK) LTD
Source: IRB Brasil Re - 2007
The new Scenario
Major opportunities to RI Brokers, to serve both insurance
companies and reinsurers established in Brazil
Nowadays RI Brokers are allowed to intermediate business
within Brazilian Market as well as abroad
There must be a legal entity in accordance
with the Brazilian Law
RI Brokers can place both reinsurance and retrocession
Brokers Opportunities
Intermediate reinsurance between Brazilian insurance
companies and reinsurers (Local, Admitted and Occasional)
Place Large Fac Business in the international market
Place retrocession for Brazilian local reinsurers
Develop new products with Brazilian insurers and reinsurers
Provide services for all players of the new market,
in premium, claims collection and reinsurance design
(limits, covers, wording etc.)
Brokers Opportunities
Prior de opening the RI Brokers had 50% of IRB’s
retrocession, which represented US$ 500 millions
Now RI Brokers can support also the reinsurance placement
of insurance companies, which may represent
at least US$ 1 billion in total
If RI Brokers keep the same market share of 50% of
all placements, they may achieve the total amount of
US$ 1 billion in premiums for the next year, increasing
this amount in the short future
We estimate a potential market for RI Brokers of
US$ 2 billions in premiums
Brokers Opportunities
Source: SUSEP 17th of April 2008
AON LTD.
BENFIELD GROUP LTD.
CAPITAL RE - (HSBC)
COOPER GAY & CO. LTD.
GUY CARPENTER & CO.
MEXBRIT LTD.
ORYPABA RIO - (JLT RE)
WILLIS LTD.
Most of the 28 brokers registered in IRB will register in SUSEP
to work in the new reinsurance market
Brokers already approved by SUSEP
AON RE BRASIL - CORRETORA DE RESSEGUROS LTDA
ASSURÊ INTERNACIONAL CORRETAGEM DE RESSEGUROS LTDA.
BENFIELD DO BRASIL CORRETORA DE RESSEGUROS LTDA.
CAPITAL RE CORRETORA DE RESSEGUROS LTDA.
CATALYST RE CORRETORA DE RESSEGUROS LTDA.
COLEMONT BRASIL CORRETAGEM DE RESSEGUROS LTDA.
COOPER GAY DO BRASIL CORRETORA DE RESSEGUROS LTDA.
CORMATT - CORRETORA DE RESSEGUROS LTDA.
ESPECIALIZADA RE CORRETORA DE RESSEGUROS LTDA.
GRB - GLOBAL RISK BRASIL SOLUÇÕES DE RISCO LTDA.
GUY CARPENTER & COMPANY LTDA.
INTER AEROSPACE CORRETORA DE SEGUROS LTDA.
JLT RE BRASIL ADMINISTRAÇÃO E CORRETAGEM DE RESSEGUROS LTDA.
LARIM CORRETORA DE RESSEGUROS LTDA.
LBS INSURANCE UNION REPRESENTAÇÃO E CORRETAGEM DE SEGUROS S/S LTDA.
MARSH RE CORRETAGEM DE RESSEGUROS LTDA.
MEXBRIT BRASIL CONSULTORIA DE SEGUROS E RESSEGUROS LTDA.
MILLER DO BRASIL CORRETORA DE RESSEGUROS LTDA.
Brokers already approved...
NAUSCH HOGAN & MURRAY BRASIL CORRETORA DE SEGUROS LTDA.
ORYPABA RIO ADMINISTRAÇÃO E CORRETAGEM DE RESSEGUROS LTDA.
PECUS CORRETORA DE RESSEGUROS LTDA.
SECURITAS UNIÃO CORRETORA DE RESSEGUROS S.A.
UIB RE BRASIL CORRETORA DE RESSEGUROS LTDA.
WILLIS CORRETORA DE RESSEGUROS LTDA.
Brazil – The new image
Brazil is well known for a lot of good memories
in the short and long past.
Brazil – The new image
But now Brazil is also Known for a lot of New Business
Opportunities for national and foreigners.
International Reinsurance Center
New Investments
Thank you
Carlos Alberto Lenz César Protasio
[email protected]
Orypaba Rio Administração e
Corretagem de Resseguro Ltda / JLT RE
Member of ABECOR-RE, Brazilian Association of Reinsurance Brokers
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