RIMS, insurance groups oppose Brazil's new reinsurance rules

WASHINGTON—The Risk & Insurance Management Society Inc. and a group of insurance industry trade associations have jointly submitted comments expressing “strong opposition” to Brazil's implementation of new reinsurance rules this year, along with another resolution under consideration.

Joining New York-based RIMS in opposing the Brazilian market measures are the Washington-based American Insurance Assn. and Council of Insurance Agents & Brokers, and the Bermuda-based Assn. of Bermuda Insurers & Reinsurers.

Among other things the measures enacted in March require that 40% of reinsurance business in Brazil be placed with local reinsurers. The rule under consideration would establish the process for obtaining local acceptance of risks, effectively implementing the previous two rules, according to David Snyder, vp and associate general counsel at the AIA.

Insurers, reinsurers and insurance buyers have said the new rules in Brazil could dramatically reduce the amount of insurance capacity in the country.

In a joint statement issued Friday the trade groups said, “The two previously adopted resolutions will virtually cut off Brazil from the foreign reinsurance market and the globalization of risk that characterizes it and should be reversed. The proposed resolution fails to do so, and indeed, creates new problems and burdens.”