At the trial session held on March 14, 2012, the Administrative
Council for Economic Defense ("CADE") reviewed and
approved, with restrictions, the agreement between BB Seguros and
Mapfre Group for the formation of two holding companies that will
be active in the insurance market.
In addition to determining the divestiture of the agricultural
insurance portfolio of Mapfre to an independent insurer, CADE
recommended that the Secretariat of Economic Law ("SDE")
opens investigations into allegedly antitrust infringements
allegedly committed by banks, insurers and reinsurers.
According to the Reporting Commissioner of the BB Seguros/Mapfre
Group proceeding, Banco do Brasil (the banking arm of the same
financial conglomerate to which BB Seguros belongs) has been
allegedly tying the sale of credit and insurance products to
agricultural businesses. The Reporting Commissioner argued that
this conduct would be rather common in the insurance
Another issue to be investigated concerns the alleged breach of
certain reinsurance regulations that would also amount to an
antitrust infringement according to the Reporting Commissioner. By
way of example, the Commissioner quoted the triangulation of
cessions among insurers and reinsurers of different economic groups
as a means to avoid rules that establish limits for cross-border
Another example was the alleged abuse by reinsurers in
negotiating certain provisions of reinsurance agreements with
direct insurers, in particular claims control provisions and
fronting arrangements. The Reporting Commissioner argued that such
abusive behaviour could generate substantial distortions in the
prices of insurance products, among other potentially negative
The last point to be investigated is the alleged improper
collection of brokerage commissions in the sale of mandatory
insurance products, as it is the case of DPVAT. The Reporting
Commissioner claimed that brokerage commissions should not be
charged when the insurance being sold is mandatory by virtue of
It remains to be seen how SDE will react to CADE′s
recommendations. It seems likely that SDE will open a preliminary
investigation, by means of which it will try to gather facts and
information concerning the alleged practices.
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