Published on November 4 by the Superintendence of Private Insurance (Susep) in the Federal Official Gazette, Resolution CNSP No. 484/25, approved by the National Council of Private Insurance (CNSP), brought introduced new rules for Universal Life insurance. The purpose of the measure is to promote the expansion of this type of insurance.
Universal Life insurance is distinguished from other life insurance products by offering traditional risk coverage (such as death and disability) complemented by risk support coverage, which can be redeemed by the insured from time to time, subject to the applicable grace periods.
This complementary coverage is remunerated by index, interest rate or by the performance of the Specially Constituted Investment Fund (FIE), as specified in the conditions of the insurance product.
Universal Life insurance is also characterized by its flexibility, allowing the insured to suspend premium payment or make additional contributions. Coverage can be maintained or extended in accordance with changes in the insured's financial condition throughout the term of the policy.
Universal Life insurance is among the leading life insurance products taken out in other jurisdictions, such as the United States and Mexico. In Brazil, however, Universal Life insurance has not gained traction in the insurance market, even after the issuance of Resolution CNSP No. 344/16 – now revoked by Resolution CNSP No. 484/25.
The new regulation clarifies that Universal Life insurance is not a pension or an investment product, but rather a life insurance product. Consequently, the CNSP eliminated the requirement for Susep´s prior approval of Universal Life Insurance products.
The new resolution also changed the terminology for the following items:
- components of the insured capital – what was previously referred to as “risk insured capital” (capital segurado de risco), has now been renamed as “supplementary portion” (parcela complementar); and
- Mathematical Provision for Benefits to Be Granted (PMBaC) – now referred to as “risk support provision” (provisão de suporte ao risco), to which accumulated premiums, net of taxes and charging fees, are allocated for the supplementary portion of the insured capital.
These changes seek to clarify the nature of Universal Life insurance, as well as to facilitate its tax treatment and prevent that the tax regime applicable to insurance combining survival coverage and supplementary pension plans from being replicated to Universal Life insurance.
Another update introduced by Resolution CNSP No. 484/25 was the reduction of the minimum policy period of the insurance, from five to four years. Such modification facilitates the insured's financial planning and can contribute to the dissemination of the product in Brazil.
The grace period was also revised: the new resolution provides that such period cannot exceed half of the term provided for by the policy – previously the maximum was two years.
Additionally, Resolution CNSP No. 484/25 allows the balance of the risk support provision to be remunerated based on an index linked to the Interbank Deposit Certificate (CDI, Certificado de Depósito Interbancário) rate, widely used in the financial market.
Minor updates were also made regarding the events for collecting the charging fee and the access of the insured to the risk support provision and the financial surplus provision.
Unlike what occurred under Resolution 344/16, Susep is expected to complement the new resolution on Universal life insurance.
The Banking, Insurance and Finance practice is available to provide more information on the new resolution on Universal life insurance.
