Research Handbooks in Financial Law series
Edited by Julian Burling and Kevin Lazarus
Chapter 27: Brazil: The Transition of Law and Regulation from State Control to Market Freedom
Ilan Goldberg 1. INTRODUCTION In recent years there has been considerable commercial interest, including by insurers, in the so-called BRIC countries (Brazil, Russia, India and China). This chapter provides an outline of the insurance legal and regulatory regime in one of those countries. Brazil provides a useful case-study for those with a wider interest in insurance, having recently transitioned (at least somewhat) between two very different models of insurance regulation. Until recently, insurance in Brazil was closely controlled by the state and reinsurance was largely in the hands of a state-owned monopoly. Now, insurance and reinsurance are characterized to a much greater extent by market freedom. This transition has been slow and not always smooth and there is arguably more work to be done. Nevertheless it has largely been seen as successful.1 The chapter begins with an introduction to the Brazilian legal system. It then outlines the framework of laws and bodies that govern insurance in Brazil. While foreign insurers are free to set up locally approved insurers to write direct business,2 in practice most foreign participants are likely to access business as reinsurers. Given the recent changes in this area the chapter goes on to provide a more detailed discussion of how reinsurance is dealt with in Brazil, including some brief details of the political and legislative history that led to the current regime. 2. THE BRAZILIAN LEGAL SYSTEM Brazil has a civil law legal system. Unlike in common law jurisdictions such as Great Britain and the United...
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