SUSEP Resolution allows the issuance of insurance-linked bonds in Brazil
The standard allows new forms of risk transfer with cost reduction.
http://novosite.susep.gov.br/ – On December 16, 2020, Resolution No. 396 of the CNSP was published in the Official Gazette, which deals with reinsurance or retrocession operations, and their financing through debt linked to (re) insurance risks, also known as Insurance Linked Securities (ILS).
The ILS is a new alternative for risk transfer that is frequently adopted on the international stage. The new Resolution provides for the local reinsurer (RPE) whose sole purpose is to accept risks through reinsurance or retrocession operations and the financing provided by ILS.
Among the advantages that the ILS will bring to the Brazilian market is the possibility of new forms of risk transfer with cost reduction, which will enable better prices for the consumer, encouraging innovation and favoring the development of the Brazilian market. The general expectation is very positive in relation to this new operation in the Brazilian market, especially when considering the international experience.
The new resolution takes effect on January 4, 2021 and can be accessed at the link: https://www.in.gov.br/en/web/dou/-/resolucao-cnsp-n-396-de- December 11, 2020-294331209
See original article at: http://novosite.susep.gov.br/
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