Brazilian insurance regulator publishes guidelines on sustainability requirements for the insurance sector
On 29 June 2022, the Brazilian Superintendence of Private Insurance (“SUSEP”) published Regulation No. 666/2022, setting forth sustainability requirements applicable to the Brazilian insurance sector. Its goal is to establish guidelines for management of risks that are directly related to ESG policies of insurance and capitalization companies, local reinsurers and pension funds.
Pursuant to the new requirements, regulated entities must ensure that sustainability risks are properly managed, particularly by preparing a triennial materiality assessment identifying, assessing and classifying the risks to which the entities are exposed – not only in relation to their activities and operations, but also in relation to their products, services, clients, suppliers and service providers.
Another point of attention concerns the obligation to prepare a sustainability policy containing principles and guidelines to ensure that sustainability-related aspects – listed in the regulation – are considered both in the ordinary course of business and in the relationship with stakeholders. In addition, until 30 April of each fiscal year, regulated entities must prepare and publish a report addressing the effectiveness of their respective sustainability policies, as well as the management of the risks to which they are exposed.
Although Regulation No. 666/2022 will only enter into force on 1 August 2022, it already sets forth deadlines for regulated entities to achieve compliance. Deadlines vary depending on the type of regulated entity (S1, S2, S3 and S4, pursuant to SUSEP’s classification), but the closest deadline expires as soon as 31 December 2022.