Spotlight on Growth in Brazil Part 2: Navigating Regulatory Changes

This landmark legislation will replace the existing framework, introducing comprehensive changes to contract structuring, governing law, and operational processes. It aims to modernise the regulatory landscape and strengthen protections for policyholders, while placing significant demands on insurers and reinsurers to adapt their practices and enhance compliance.

Some Key Changes Under the Brazilian Insurance Act

1. Response Deadlines and Tacit Approval

• Insurers now have a 25-day deadline to respond to policy proposals, with tacit approval granted if no response is provided within this timeframe.
• Reinsurance contracts are subject to even stricter deadlines, requiring a response within 20 days.

2. Policyholder-Focused Regulations

• New requirements demand greater transparency in advertising and restrict interpretations of policy terms that limit coverage. These provisions favour policyholders and beneficiaries, ensuring clearer and fairer contracts.

3. Operational Impacts

• Loss adjusters will also feel the pressure, as they are held accountable for meeting insurers’ deadlines. Companies will need to reassess their operational workflows to meet these tighter timelines, ensuring that processes are efficient and compliant.

These changes are not just regulatory updates; they signal a fundamental shift in how insurers and reinsurers operate. With greater emphasis on timeliness, transparency, and accountability, firms must streamline their internal processes and adopt a proactive approach to compliance.

Solvency Regulations: ORSA

In addition to the Brazilian Insurance Act, re/insurers are also grappling with the Own Risk and Solvency Assessment (ORSA) framework, which requires robust risk management and scenario analysis to ensure solvency. ORSA demands detailed internal assessments of an insurer’s ability to meet its obligations under various conditions, highlighting the need for stronger operational controls and enhanced risk modelling.

At Pro Global, we recognise the challenges these regulatory changes present and are seeing strong demand for expert local knowledge to support in-house compliance teams and provide independent reviews of processes. Our solutions are designed to help insurers strengthen their operational resilience, ensuring they can navigate the complexities of these regulations with confidence.

Technology and Innovation

In parallel with regulatory reform, Brazil’s insurance market is experiencing a surge in technological innovation. As highlighted in Part 1, over 200 insurtechs have launched in Brazil in recent years, and many are leveraging artificial intelligence (AI) to enhance underwriting, risk assessment, and operational efficiency. Generative AI and advanced automation tools, in particular, are proving invaluable in helping companies meet compliance demands, especially under frameworks like ORSA.

However, the integration of new technologies comes with its own challenges, particularly in the realm of cybersecurity. As insurers embrace end-to-end automation and digitised processes, ensuring data protection and operational security becomes paramount. As a result, we are seeing growing demand for support with tailored cyber audit solutions that help identify potential weaknesses to help enhance defences and strengthen re/insurers’ defences against growing cyber risks in this increasingly connected digital landscape.

Proactive oversight is Key

The introduction of the Brazilian Insurance Act is a pivotal moment for the industry to accelerate proactive oversight. The demand for automation, operational efficiency, and locally adapted solutions will only grow as the regulatory environment evolves. At Pro Global, we remain dedicated to helping our clients turn these challenges into opportunities, ensuring continued compliant growth and operational excellence in Brazil’s vibrant insurance sector.

Further reading: Spotlight on Growth in Brazil Part 1 – Finding Efficiency in Complexity in Latin America’s Largest Insurance Market

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