A2ii Newsflash| SUSEP Implements a Regulatory Sandbox Model in Brazil
On 20 July 2020, the Superintendence of Private Insurance (SUSEP) Brazil, published a call for proposals for its regulatory sandbox, an innovation project for the insurance sector in the country. The project aims to increase the penetration for the Brazilian insurance market and reduce the cost for the consumer through the use of innovative products and services and new technologies.
Inspired by the UK Financial Conduct Authority (FCA)’s successful innovation model adopted in 2016, in June 2019 SUSEP together with the Special Secretariat of Finance of the Ministry of Economy, the Central Bank of Brazil and the Securities Commission made public their intention to implement a regulatory sandbox model in Brazil.
Following a debate with the market and the public hearing, in March of this year, the authority launched a public notice disclosing the selection rules. Some of these include a reduced minimum required capital from R$ 15 million (approx. US$ 2.75 m) to R$ 1 million (approx. US$ 180 thousand), simplified data filling requirements, a lower regulatory cost for companies and simplified regulation.
According to SUSEP director Eduardo Fraga, the implementation of the sandbox reflects the innovation process that the insurance market has been implementing. ‘Our goal is to expand insurance coverage in Brazil, stimulating competition and innovation, through a different experience to policyholders. We are talking about companies that will come up with new proposals for underwriting and retaining risks’, he said.
The focus of the project is on mass products, and a temporary authorization will be granted to selected companies. Participants will be able to operate under the rules provided by the sandbox for 36 months.
Today, more than 30 countries have operational sandboxes. Among the most recent launches were Pakistan and the Philippines. Elsewhere in the South American region, Argentina also recently established an InsurTech Innovation Hub.