Disagreements with the protectionist-style rules have been voiced by insurance and reinsurance buyers around the world, including the Federation of European Risk Management Associations, Ferma. In November, the organisation sent a letter to the Brazilian regulators that expressed its views on the matter.

Mr Luzzi announced the latest news as he returned from the Brazilian risk management association conference earlier last month to delegates at Commercial Risk Europe's Risk Frontiers Latin America seminar in Madrid.

Mr Luzzi told the audience of risk managers in Madrid that the association’s proposals reinforce points made by the Brazilian risk management association, Associação Brasileira de Gerência de Risco (ABGR), in a letter sent to Brazil’s insurance supervisor (Susep).

“We want to defend the interests of European companies that have investments in Brazil,” explained Mr Luzzi.

During the CRE Risk Frontiers conference Mr Luzzi noted that the new rules do not seem to have affected the offer of reinsurance in Brazil so far.

But he stressed that they have created new layers of procedures that imply extra costs to reinsurance contracts that, in the end, are paid for by insurance buyers.

He bemoaned the complex arrangements that insurers and reinsurers are being forced to devise in order to adapt themselves to complex risk transference and retrocession rules.

Earlier this month a number of insurance bodies added to the chorus of discontent through the release of a joint statement that also criticises the new rules.

They include America's Risk and Insurance Management Society (RIMS), the American Insurance Association (AIA), the Association of Bermuda Insurers & Reinsurers (ABIR) and The Council of Insurance Agents & Brokers (CIAB).

“Insurers have invested significant resources in Brazil’s insurance market only to have the clock turned back on market access,” the statement says.

“The two previously adopted resolutions will virtually cut off Brazil from the foreign reinsurance market and the globalisation of risk that characterises it and should be reversed,” it adds.

The organisations pledged to actively work to revert the two resolutions implemented in March.

All the pressure may have finally borne fruit.

On December 1, Susep, the insurance market supervisor, announced in a succinct statement that the Economy Ministry has approved a new resolution that enables reinsurance buyers to place risks abroad if they cannot find takers for them among Brazilian-based reinsurers.

Although Susep has not released details of the new rule, the change seems to address some of the concerns expressed by reinsurance buyers since the adoption of Resolutions 225 and 232 in March.

The original resolutions stated that 40% of contracts should be placed with local reinsurers, no matter what.

But from now on reinsurance buyers will be able to offer their contracts to other players if they cannot find anyone interested in the local market to accept their offers.

Brazilian-based reinsurers can apply for three different status levels—local, admitted and eventual—based upon the capital that they allocate to their operations in the country.

In its latest statement Susep said that, if no local reinsurer wants to take a contract, the buyer can offer the risk to admitted or eventual reinsurers, which are usually units of international reinsurance groups. There are 29 admitted reinsurers and 59 eventual ones in the country, compared to 8 local reinsurance firms.

If buyers cannot find takers among the three groups of reinsurers with a Brazilian licence, they will now be able to look for coverage abroad with firms that are not registered in Brazil, according to Susep.

The changes seem to address concerns among the buyers. But ABGR, for instance, has abstained from commenting on the apparent U-turn as the government has not released details of the latest resolution approved by the Economy Ministry.

Susep claims that the new rules are merely a complement to Resolutions 225 and 232.

In the same statement, the body's president, Luciano Portal Santanna, once more defended the March change of rules, claiming that it aimed to strengthen the local market and has achieved this goal.

“The number of local reinsurers, which was merely six in December 2010, among more than 90 companies authorised to operate in Brazil, soon will get to 12,” Susep claimed in the statement.

Supporters of the original restrictions say that foreign reinsurers were taking advantage of a legal loophole to send contracts to other parts of their groups based outside Brazil.

And it is true that, since March, a number of companies have applied for local reinsurance status.

One of them was Swiss Re, which submitted its application in August.

Another of the four new local reinsurers hinted by Susep in its statement could be a unit of Allianz Global Corporate and Specialty (AGCS).

The company has confirmed to CRE that it has such plans and is in talks with supervisors to achieve local reinsurer status.

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