Instituto de Resseguros do Brasil
Encyclopedia
The Instituto de Resseguros do Brasil, the Reinsurance Institute of Brazil (corporate name: IRB-Brazil Re.) is a joint venture with state control, which operates in the market for reinsurance
.
Created in 1939 by Getúlio Vargas
, the IRB was intended to focus on domestic companies to reinsurance
in the country through the company itself and its policy of retrocession, where most of the risk was shared between the insurance national. It maintained its monopoly until 2007, when, through Complementary Law, Congress reopened the Brazilian reinsurance market, and the IRB has to be classified as a local reinsurer.
According to data from consulting Standard & Poor's
in 2005, the IRB was the 64th reinsurance company in the world in volume of awards, with a net revenue of 525.9 million U.S. dollars, and a retrocession of 47.7%.
The Congress approved on August 21, the 13th Amendment of the Constitution, which abolished the reinsurance monopoly in Brazil. As outlined in Article 192 (regulating the financial system), in clause II of the Constitution, and eliminates the phrase "the official reinsurer." The amendment needs to be regulated by complementary law, so that the reinsurance market can operate freely.
The interim 1578, issued on June 18, 1997, transforms the Brazil Reinsurance Institute (IRB) in a stock company with an executive board organized collegially. Class A shares of the IRB, belonging to the National Social Security Institute (INSS), pass into the hands of the Treasury.
Since June 30, 1997, the Reinsurance Institute of Brazil is going to be called IRB Brazil Reinsurance SA (IRB-Brazil Re). The decision is taken at a General Assembly of Shareholders.
The new name of the IRB-Brazil Re is ratified in the art. 59 of Provisional Measure 1549-36 of November 6, 1997, which deals with the organization of the Presidency and the Ministries. From this, seven other measures are low, keeping the wording of article 59. On May 27, 1998, to promulgate Act 9649, confirming the previous MPs, being published in the Official Gazette (DOU) on May 28.
The Congress shall, in the 13 days that year, the conversion of MP in the 1578 Act 9482, which provides for the administration of the IRB-Brazil Re and the transfer of shares.
Decree 2423 of 16 December 1997, includes the reinsurer in the National Privatization Program (PND).
On February 9, 1998 the Invitation for Bids for the selection of two consortia responsible for economic and financial evaluation of the IRB-Brazil Re is published.
The National Privatization Council (CND) decided on 18 April 2000, once again postpone the sale of the IRB-Brazil Re to review the price of the company - changed twice. Resolution No. 11 is April 20, published in the Gazette on the 25th of that month.
The Court of Audit (TCU) requests additional information on the analysis carried out by consultants.
The Supreme Court accepts the July 20, 2000, the Direct Action of Unconstitutionality (2223-7), to postpone the auction sale of the IRB-Brazil Re. On the same day, the resolution is published in the National Privatization Council (CND), stopping the sale of the company.
The Supreme Court puts the Direct Action of Unconstitutionality on the agenda of September 14 but due to lack of quorum, the matter is appreciated. The Supreme Court judge actions only when the 11 ministers are present. The vote is transferred to the 20 and 21. However, not all ministers attend and, again, there is no trial.
On October 18, 2001, fifteen months after the Supreme Court has received the Direct Action of Unconstitutionality, ministers begin to judge the action, but the session is suspended for a point of order.
On November 22, 2001, the ministers return to the theme that immediately after the application of view of the Minister Ellen Gracie, was suspended.
On June 12, 2002, the Direct Action of Unconstitutionality enters into the discussion but is judged by a lack of quorum. The next day, the action returns to the floor, but it is not voted on.
On June 17, the Supreme Court held an extraordinary session, but due to lack of quorum, the Direct Action of Unconstitutionality is without a trial.
The Supreme Court takes over on October 10, the trial of the Direct Action of Unconstitutionality and is confirmed by a majority of votes, the injunction granted in July 2000. With the decision, the IRB-Brazil Re maintains its responsibility under the functions of regulation and supervision of the Brazilian reinsurance market, beyond the competence to grant permits for activities in the sector.
In the new scenario, the IRB became known as a local reinsurer, and by the end of 2007 still stood as the only company able to operate in the sector. With the "Model Safeguards" IRB will still have a market reserve for some specific classes, such as Life and Pensions, and the market as a whole, especially for still being the sole local reinsurer.
But even before the new legal standard in the market, the IRB initiated a process of institutional modernization. The board began to adopt policies more competitive and transparent management, has created an ombudsman , productivity goals, has given more freedom to the insurers at the time of hiring, and re-running public tender for the renewal of its workforce.
Among the accused include the former deputy Roberto Jefferson, the insurance broker and Luiz Henrique Brandao Neto Appolonio then president of the state.
Reinsurance
Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
.
Created in 1939 by Getúlio Vargas
Getúlio Vargas
Getúlio Dornelles Vargas served as President of Brazil, first as dictator, from 1930 to 1945, and in a democratically elected term from 1951 until his suicide in 1954. Vargas led Brazil for 18 years, the most for any President, and second in Brazilian history to Emperor Pedro II...
, the IRB was intended to focus on domestic companies to reinsurance
Reinsurance
Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
in the country through the company itself and its policy of retrocession, where most of the risk was shared between the insurance national. It maintained its monopoly until 2007, when, through Complementary Law, Congress reopened the Brazilian reinsurance market, and the IRB has to be classified as a local reinsurer.
According to data from consulting Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
in 2005, the IRB was the 64th reinsurance company in the world in volume of awards, with a net revenue of 525.9 million U.S. dollars, and a retrocession of 47.7%.
The push for privatization of IRB
In 1997, the institute was transformed into a corporation so as to be named IRB Brazil Reinsurance SA- view of a public outcry that sought better conditions and lower insurance costs, the government of President Fernando Henrique Cardoso tried to privatize the IRB, but an action direct unconstitutionality filed by the Workers' Party (PT) (which curiously promoted the end of the monopoly a decade later) made the auctions were postponed.The Congress approved on August 21, the 13th Amendment of the Constitution, which abolished the reinsurance monopoly in Brazil. As outlined in Article 192 (regulating the financial system), in clause II of the Constitution, and eliminates the phrase "the official reinsurer." The amendment needs to be regulated by complementary law, so that the reinsurance market can operate freely.
The interim 1578, issued on June 18, 1997, transforms the Brazil Reinsurance Institute (IRB) in a stock company with an executive board organized collegially. Class A shares of the IRB, belonging to the National Social Security Institute (INSS), pass into the hands of the Treasury.
Since June 30, 1997, the Reinsurance Institute of Brazil is going to be called IRB Brazil Reinsurance SA (IRB-Brazil Re). The decision is taken at a General Assembly of Shareholders.
The new name of the IRB-Brazil Re is ratified in the art. 59 of Provisional Measure 1549-36 of November 6, 1997, which deals with the organization of the Presidency and the Ministries. From this, seven other measures are low, keeping the wording of article 59. On May 27, 1998, to promulgate Act 9649, confirming the previous MPs, being published in the Official Gazette (DOU) on May 28.
The Congress shall, in the 13 days that year, the conversion of MP in the 1578 Act 9482, which provides for the administration of the IRB-Brazil Re and the transfer of shares.
Decree 2423 of 16 December 1997, includes the reinsurer in the National Privatization Program (PND).
On February 9, 1998 the Invitation for Bids for the selection of two consortia responsible for economic and financial evaluation of the IRB-Brazil Re is published.
Timeline of privatization
The Brazilian Development Bank (Portuguese: Banco Nacional de Desenvolvimento Economico e Social, abbreviated: BNDES) announced the schedule for the privatization of IRB-Brazil Re in January 1999 with a forecast for the auction was held on October 14 of that year.Postponement of the auction
The Brazilian Development Bank (BNDES) has confirmed the postponement of the auction. The decision was due to non-approval of the regulatory end of the reinsurance monopoly.Transfer of responsibilities
The government sent to Congress in September, ordinary bill that transferred to the Superintendency of Private Insurance (Susep) the duties of the IRB-Brazil Re - regulatory body for co-insurance, reinsurance and retrocession.Approval of the law
The House of Representatives approved the bill ordinary, transferring control of reinsurance to Susep. On December 14, the Senate also approved the bill. The president, Fernando Henrique Cardoso, signed on 20 December of that year, the 9932 Act, transferring the control and standardization of the reinsurance industry IRB-Brazil Re to Susep. The measure is published in the Gazette the next day. This law, however, was deemed unconstitutional.Rules for the reinsurance market
The National Council of Private Insurance (CNSP), on January 14, 2000, defines the basic rules for the open market reinsurance. But the normative acts downloaded after the 9932 law remain as long as you have no legal value to the decision of the Supreme Court. The auction for the privatization of IRB-Brazil Re is scheduled for April 25 of that year.New announcement
On March 9, 2000, the National Privatization Council (CND) publishes a new notice and minimum sale price of the IRB-Brazil Re is 550 million. A new date is marked: July 25 that year.The National Privatization Council (CND) decided on 18 April 2000, once again postpone the sale of the IRB-Brazil Re to review the price of the company - changed twice. Resolution No. 11 is April 20, published in the Gazette on the 25th of that month.
The Court of Audit (TCU) requests additional information on the analysis carried out by consultants.
Direct action of unconstitutionality
The Workers' Party (PT) filed a Direct Action of Unconstitutionality to the Supreme Court (STF). Action is required by the fact that the transfer of regulatory functions of the IRB-Brazil Re Susep to be made by means of a supplementary law and not by ordinary legislation, because it is a constitutional requirement.The Supreme Court accepts the July 20, 2000, the Direct Action of Unconstitutionality (2223-7), to postpone the auction sale of the IRB-Brazil Re. On the same day, the resolution is published in the National Privatization Council (CND), stopping the sale of the company.
The Supreme Court puts the Direct Action of Unconstitutionality on the agenda of September 14 but due to lack of quorum, the matter is appreciated. The Supreme Court judge actions only when the 11 ministers are present. The vote is transferred to the 20 and 21. However, not all ministers attend and, again, there is no trial.
On October 18, 2001, fifteen months after the Supreme Court has received the Direct Action of Unconstitutionality, ministers begin to judge the action, but the session is suspended for a point of order.
On November 22, 2001, the ministers return to the theme that immediately after the application of view of the Minister Ellen Gracie, was suspended.
On June 12, 2002, the Direct Action of Unconstitutionality enters into the discussion but is judged by a lack of quorum. The next day, the action returns to the floor, but it is not voted on.
On June 17, the Supreme Court held an extraordinary session, but due to lack of quorum, the Direct Action of Unconstitutionality is without a trial.
The Supreme Court takes over on October 10, the trial of the Direct Action of Unconstitutionality and is confirmed by a majority of votes, the injunction granted in July 2000. With the decision, the IRB-Brazil Re maintains its responsibility under the functions of regulation and supervision of the Brazilian reinsurance market, beyond the competence to grant permits for activities in the sector.
The Market Opening
At the beginning of 2007 was approved and signed the Complementary Law 126, which opened Brazilian reinsurance market. As further required by the regulatory body that regulates the industry, which became the Susep.In the new scenario, the IRB became known as a local reinsurer, and by the end of 2007 still stood as the only company able to operate in the sector. With the "Model Safeguards" IRB will still have a market reserve for some specific classes, such as Life and Pensions, and the market as a whole, especially for still being the sole local reinsurer.
But even before the new legal standard in the market, the IRB initiated a process of institutional modernization. The board began to adopt policies more competitive and transparent management, has created an ombudsman , productivity goals, has given more freedom to the insurers at the time of hiring, and re-running public tender for the renewal of its workforce.
Scandal of the IRB
The Scandal of the IRB, was the name popularly used to refer to the corruption scandal related to an allowance of 400,000 charged by the PTB to the real leader of the IRB, could this money through irregular administrative operations.Among the accused include the former deputy Roberto Jefferson, the insurance broker and Luiz Henrique Brandao Neto Appolonio then president of the state.