Why is ‘Admitted’ the obvious choice?
There are three legal options for reinsurers to enter the Brazilian market: Local, Admitted, and Eventual (also known as Occasional).
Even though the Local status may provide access to a larger portion of business, given Local’s right of “first refusal” to 60% of reinsurance cessions until January 2010, registration as Local requires establishment of a reinsurance company, with capital and operations in Brazil. This would not be a practical option for Lloyd’s given its unique market structure.
Eventual reinsurers will be the ‘last resource’ reinsurer, restricted to approximately 10% of reinsurance cessions (precise amount still to be determined by the Government).
Given the huge potential of the Brazilian market, Admitted appears to be the obvious choice for Lloyd’s currently.
Lloyd’s application for registration as Admitted submitted to SUSEP (re/insurance regulator) in February.
Given its great interest in entering the liberalised Brazilian reinsurance market as soon as possible, Lloyd’s submitted its application for registration as Admitted in February, hoping to complete the registration process by 17 April, the date from which the reinsurance regulations will be effective.
Lloyd’s presence in Brazil
Lloyd’s Representative Office will be located in Rio de Janeiro. Further details on this and other matters will be provided to the market via a Market Bulletin and also through the ‘What’s New’ section of Crystal: www.lloyds.com/crystal.
Information on Brazil and the local insurance market is available for managing agents under the reference/market intelligence section of Crystal.
