Report highlights insurance regulatory changes in Mexico, Brazil and India

Global Insurance Law Connect’s (GILC) 2022 Radar Report has highlighted a number of regulatory changes impacting the insurance sector in Mexico, Brazil and India, including liability claims and time-barring in Mexico, delays to deregulation in Brazil and opening up the market in India. Mexico In Mexico, there is concern over the extension of the time period during which claims can be made for liability claims. The courts have ruled that an insurance contract can remain valid after the statute of limitations has ended, even if the type of claim is time barred. According to law firm Ocampo 1890: “This can be interpreted to mean that insurers and reinsurers will be obliged to pay claims after valid policy dates have expired, for an unlimited period.” The issue has come about because the law states that the period for the statute of limitation will start from the date that the claimant is aware of the insurance contract. “The courts have ruled that the statute of limitations will start to count down from the claimant’s knowledge of the policy, thereby creating a situation where insurers’ liability can be extended indefinitely, says Ocampo 1890. It adds: “This can create a severe impact for insurers and reinsurers that may have considered a historic policy to be closed, as victims are filing claims for damages which occurred almost a decade ago, alleging that they only have recent knowledge of the existence of a policy covering the liability. This will surely affect insurers’ and reinsurers’ reserves.” The law firm goes on to say that in several current cases it has been alleged that as this is a civil matter, the term of prescription is two years after the damage occurred, and that because the claim was not filed in time, the insurer is released from the contract. “If this is accepted, then the claim on the insurance contract may be effective but the insurer’s obligation to compensate the claimant no longer exists,” says the law firm. Diana Ángeles, associate, Ocampo 1890, says: “This issue must be reviewed by the insurance sector in order to achieve legislative reform to article 82 of the Ley Sobre el Contrato de Seguro.” Brazil In Brazil, there is concern that the upcoming election later this year, and changes to the board of the insurance regulator, may delay the deregulation process and rules to encourage innovation in the sector. Local law firm Santos Bevilaqua Advogados says: “A deacceleration in the ongoing deregulation process of the insurance market (initiated in 2020) is expected, due to the election year and changes to the board of directors of the insurance supervisor (SUSEP). It may impact, on different levels, open finance, the insurance regulatory sandbox, the freedom to develop innovative products and the ability to implement remote selling operations.” It adds that the deregulation that has been implemented in the last two years is an incentive for expansion of the insurance market. “Innovation, in the case of the insurance market, has been a major factor in the adaptation of insurance products and techniques to the changing demands of new and old clients. Without innovation, the insurance market could lose relevance in competition with other risk management tools,” says the law firm. The changes at SUSEP could delay the implementation of rules to incentivise innovation, like open finance, the insurance regulatory sandbox, remote selling processes, different selling channels and the freedom to develop new products, says Santos Bevilaqua Advogados. India India has begun easing access for international businesses into the insurance sector, and the regulator now allows 74% foreign direct investment in India. But according to local law firm Khaitan Legal Associates, the International Financial Services Center Authority (IFSCA) has released guidelines on insurance business operations in GIFT City, which focuses on strong global connections. The law firm explains that in late 2021, IFSCA published its regulations for the operation of the insurance industry within the centre. IFSCA has provided guidelines for setting up offices in GIFT City, for Indian insurers, foreign insurers and reinsurers, the society of Lloyd’s and managing general agents. Khaitan Legal Associates says the offices in IFSCA can transact their business in foreign currency and can also perform activities from other special economic zones inside and outside India, and notes that the creation of IFSCA for insurance services is a new development in the Indian regulatory regime. “Newer establishments will bring global expertise and expand the horizon for insurance services in India, says Sakate Khaitan, senior partner, Khaitan Legal Associates. “The market will witness increased ease of doing business and exponential economic growth.”

Report highlights insurance regulatory changes in Mexico, Brazil and India

Global Insurance Law Connect’s report reveals political, regulatory and legal changes

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