Brazil’s CNSP Resolution 494 takes effect on 2 January 2027, requiring Brazilian law and jurisdiction for reinsurance of local risks, reshaping claims-control clauses and cutting the formalisation window to 90 days. It arrives just as AM Best lifts its Brazil reinsurance outlook to stable and Fitch warns that global competition is shifting from price to terms.
For two years the reinsurance cycle has been told in rates. The next chapter will be told in wordings. Fitch Ratings expects that, after substantial price declines, competition at the 2027 renewals will become less price-led and increasingly centred on terms and conditions: lower attachment points, broader coverage and aggregate protection for more frequent return periods. In Latin America’s largest market, the regulator has decided to write part of those terms itself.
What Resolution 494 changes
CNSP Resolution 494, published on 21 July 2026, replaces Resolution 451 and aligns reinsurance rules with Brazil’s new Insurance Act (Law 15,040). It takes effect on 2 January 2027; in-force programmes must comply at renewal. Reinsurance of risks situated in Brazil must submit disputes to Brazilian law and jurisdiction, and the rule no longer expressly reserves arbitration. The prior authorisation for reinsurer participation in claims handling is not reproduced: the cedant bears full and exclusive liability to insureds, so claims-cooperation and claims-control clauses must be redrafted. Contracts must be formalised within 90 days of inception, down from 180, and silence 20 days after receipt of a proposal now constitutes tacit acceptance. The 40 percent preferential offer to local reinsurers stands, with identical information and price required for local and foreign markets, while the rigid 70 percent retrocession cap gives way to a duty of technical justification to Susep.
A healthier market, a softer cycle
The regulatory reset lands on a market in better shape. AM Best revised its outlook for Brazilian reinsurance to stable from negative, noting favourable underwriting results in 2025 for the first time since 2019 and a 15 percent policy rate that supported a third consecutive year of positive bottom-line results. Globally, the backdrop is less forgiving. Fitch forecasts deteriorating combined ratios in 2027 as price erosion continues, alternative capital has reached a record of more than USD 144 billion, and M&A has returned as organic opportunities fade, with Fitch warning it will view negatively any deal pursued for scale without a clear strategic rationale.
What this means for Power Re
In Group Life and Personal Accident, the wording is the product. Claims cooperation, notification duties and recovery procedures are where a facultative or treaty reinsurer protects itself against anti-selection and loose adjudication; when a regulator narrows those tools, the protection must move upstream into risk selection, pricing and data. Power Re’s position is procedural: any business touching Brazilian risk from 2027 is reviewed clause by clause against Resolution 494 before capacity is quoted, proposals are issued complete enough to stand as evidence of cover, and no proposal is left unanswered long enough for silence to become acceptance. As the soft market migrates from price to terms, we will compete on the clarity of our wordings and the speed of our decisions, not on concessions that weaken the contract. Discipline in the fine print is still discipline.
Sources: Lefosse on CNSP Resolution 494 (29 July 2026); Intelligent Insurer, Monte Carlo Today (September 2026); AM Best Market Segment Report on Brazil via Business Wire (4 September 2026); Fitch Ratings viewpoint via Insurance Journal (8 September 2026).
Power Re perspective
This commentary reflects Power Re’s reading of public market reporting. It is general information, not underwriting, investment or legal advice.
