System of Minimum Guidelines: Changes to the General Regulation of Insurance Activity

On September 21, Resolution of the SSN No. 40,834/2017 was published in the Official Gazette, which modified articles 23.1, 23.2 and 23.3 of the General Regulation of Insurance Activity (RGAA).

Prior to the reform, article 23.1 of the RGAA established that insurers could only use Plans and Technical-Contractual Elements that had been authorized by (i) approvals of a particular nature, (ii) adherence to particular approvals and, (iii) general approvals.

As of this Resolution, a new type of authorization was added: Approvals of a particular nature in accordance with the "Minimum System of Guidelines", by means of which insurers will be able to elaborate the Contractual Conditions with which they will operate.

The SSN will issue a General Resolution which will contain the "Minimum Guidelines" to be used in this new authorization system. Once this Resolution with the Minimum Guidelines has been approved, all the duly authorized insurance entities may submit the request for new coverage to begin using it automatically, without prior authorization from the SSN. For that purpose, they must comply with some formal requirements such as (i) the presentation of sworn statements about compliance with the "Minimum Guidelines" and (ii) the Contractual Conditions developed by them.

See below a brief detail of the provisions of Resolution SSN No. 40,834/2017.

Approvals of a particular nature

The Technical-Contractual Elements of a particular nature can only be used by insurers with prior approval of the SSN, which must be obtained within 90 days from the presentation. If, after this period the SSN does not make any observation, it is understood that the new Technical-Contractual Elements have been approved.

Adherence to particular approvals

After 90 consecutive days of the approval of the Technical-Contractual Elements of a particular nature by the SSN, any duly authorized to operate insurer can use them, prior request of authorization from the SSN.

Approvals: Mandatory insurance is excluded from this system 

• Surety Bond and those insurances that have uniform Contractual Conditions of compulsory use, according to article 23.6 of the RGAA of a particular nature according to the "Minimum Standards System" are excluded.
• Once the General Resolutions that define the "Minimum Guidelines" have been published, all the entities may submit new Contractual Conditions and Rate Conditions to the SSN, which observe the "Minimum Guidelines" approved for each case. They may also submit Contractual Conditions and Rate Conditions that modify or add something new to the already submitted Conditions.
• Among the formal requirements, a sworn statement signed by a lawyer not in a dependent labor relationship with the insurer is required, where it is established that the Contractual Conditions are in accordance to the Law 17,418, to articles 24 and 25 of Law 20,091 and with the Minimum Guidelines. The lawyers who sign these sworn statements must be previously registered in a registry that will be created for that purpose.
• Once the presentation has been made and all the required formalities have been complied with, the insurance company will be automatically authorized for the use of the Contractual Conditions and, where applicable, Rates Conditions, and all the authorizations that entity has obtained previously for that coverage will expire. However, the SSN may request a reform of the approved Contractual Conditions and Rate Conditions, after they have analyzed the submission. In addition, the authorization may be withdrawn if any breach with the "Minimum Guidelines arises from the analysis".