INSURANCE AND OPEN SUPPLEMENTARY SOCIAL SECURITY
1) Private Insurance Superintendence - SUSEP CIRCULAR No. 589, OF 7/5/2019
SUSEP Circular no. 589, of 7/5/2019, was published in the Federal Official Journal (DOU) on 7/8/2019. This Circular amends SUSEP Circular no. 529, of 2016, which established the procedures related to the production of evidence in proceedings for organization; operation authorization; changes in the controlling interest; corporate restructuring, acquisition or expansion of direct or indirect interest; installation of, change to, closing of offices or representations; cancellation of operation authorizations; capital increase or decrease; and amendments to articles of incorporation, of any type, of insurers, capitalization companies, local reinsurers, and open supplementary social security entities (EAPC).
In brief, this new Circular establishes that the publicly traded companies of the insurance sector will be treated as companies with stock widely held, therefore as a "corporation." The purpose is to recognize the existence of more complex corporate structures by changing some of the requirements set in the previous Circular to make them more comprehensive and give flexibility to the rule.
On the one side, this change may be deemed positive because legal entities with more complex structures many times encounter difficulties to prove that all requirements set in SUSEP Circular no. 529 have been met. On the other side, this Circular fails when it considers that companies listed in the stock exchange will never have a controller, which is a gross simplification of what actually happens.
It may be said that the new Circular was enacted within the ambit of the negotiation among the IRB members to make the sale of shares of the Federal Government, Banco do Brasil, and Federal Savings Bank viable, especially as a condition for the other controllers not to sell their shares immediately.
It should be noted that the IRB transaction is good news not only to IRB but also to SUSEP and the entire insurance market because the majority control exercised by the government, which also holds a golden share, was, in the past, the cause of many regulatory actions not desired by SUSEP to protect the IRB.
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