Published on September 26, CMN/CNSP Joint Resolution No. 12/24 regulates Law No.14,652/23 and provides about the right of redemption in pension plans, personal insurance, and capitalization bonds as a collateral for loans obtained from financial institutions.[1]
The new regulatory rule was awaited by the financial market, since Law No. 14,652/23 determined that the Brazilian Private Insurance Council (CNSP) and the should regulate, within their legal competences, the granting of the right of redemption as a collateral in credit operations.
The Joint Resolution came into force on the date of its publication,[2] but does not affect the guarantees of credit operations already established.
Below, we comment on the main provisions of the Joint Resolution:
- Guarantor. As it happens with other fiduciary guarantees and security interest, the collateral on the right of redemption can be granted by a third party, other than the borrower himself.
- Guarantee. Only the amounts effectively available for redemption can be given as collateral, even if they are subjected to a grace period. As a result, the following cannot be offered as a guarantee:
- the mathematical provisions that have not complied with the vesting conditions established in the respective pension or insurance plan;
- the mathematical provisions frozen by a court of law;
- the mathematical provision aimed at communicability between survivor coverage and risk coverage; and
- capitalizations bonds that do not allow partial redemption and have already been pledged as a guarantee in a previous credit operation.
- Coexistence of guarantees. With the exception of capitalizations bonds that do not allow partial redemption, the redemption right can be given as a collateral in more than one credit operation. In this case, the financial institution that has previously granted the loan will have priority over the other financial institutions. Financial institutions that did not have priority, however, may enforce the guarantee, provided that the amount of the mathematical provision previously granted as a collateral is preserved.
- Guarantee amount. The right of redemption given as a collateral must maintain economic rationality with the risk that is intended to be mitigated, thus maintaining a relationship between the frozen amount and the outstanding balance.
- Term of the credit operation. The term of the loan cannot exceed the end of the accumulation period of the pension plan or personal insurance or the end of the term of the capitalizations bond.
Procedures for granting guarantees
To facilitate the procedure of granting the right of redemption as a collateral and to obtain a lower interest rates by the borrowers, the Joint Resolution CMN/CNSP No.12/24 established the following procedures for granting the guarantee:
- Information sharing. After the customer formalizes his intention to give his right of redemption as a collateral, the financial institution will request from the operating entity[3] a list of information that must be provided within two business days of the request. Among this information are:
- information on compliance with the grace period established for redemption or remaining term; and
- indication of the amount eligible for redemption.
- Instrument of guarantee. The contractual instrument of the guarantee must be signed by all parties involved in the guarantee operation (debtor, any third party guarantor, financial institution and operating entity). It should also contain some essential information, such as:
- value of the guarantee;
- authorization of the client to send information about the operation;
- criteria and deadlines for exercising the right of redemption; and
- criteria and deadlines for the financial institution to request the total or partial release of the blocked amount to the operating entity, after settlement of the credit operation or, if possible, partial release.
- Freezing of values. Simultaneously with the formalization of the guarantee instrument, the operating entity must freee the amount given as a collateral.
- Unlocking of values. The operating entity must fully or partially release the blocked amounts within two business days after the financial institution requests the release.
- Release request. The guarantor may request the partial release of the amount given as a collateral. The financial institution will have five business days to respond to the request in a reasoned manner.
- Information exchange system. The exchange of information and documents between financial institutions and operating entities must be carried out through electronic systems managed by financial market infrastructure authorized by the Central Bank of Brazil. It is up to the operator to choose the system responsible. Operating entities shall use this system in a standardized way to interact with financial institutions.
Operating entities have until December 26 of this year to publish on their websites the form of information exchange, while the electronic system managed through an infrastructure authorized by the Central Bank of Brazil is not adopted.
- Liquidation of the guarantee. The request for the liquidation of the guarantee must be made by the financial institution and must occur in the manner established in the guarantee instrument. The Joint Resolution, however, determines that the guarantee may be enforced after at least 90 days of arrears, unless the guarantor expressly requests the settlement of the redemption right before this period.
- Duty of information. The financial institution must inform the guarantor debtor of the consequences arising from the freezing of the right of redemption. It must also inform about the costs and consequences of late payment of the loan related to the settlement of the guarantee (such as taxes levied on the settlement of the guarantee and costs with postponed loading).
Considering the reduced deadlines and the new procedures summarized above, it is important that financial institutions, insurance companies, open supplementary pension entities and capitalization companies adjust their operations to the new Joint Resolution.
Machado Meyer's Banking, Insurance and Finance practice can provide more information about the changes.
[1] Law No.14,652/23 allows the granting of the right of redemption arising from (i) supplementary pension benefit plans, under a capitalization regime; (ii) personal insurance plans, on a capitalization basis; (iii) capitalizations bonds; and (iv) of the Individual Programmed Retirement Fund (Fapi). The Joint Resolution regulates only credit operations carried out with the first three products, specifying that only the following modalities can be given as collateral: (i) open supplementary pension benefit plans with survivorship coverage structured in the variable contribution modality (e.g., PGBL); (ii) personal insurance plans with survivorship coverage structured in the variable contribution modality (such as VGBL); and (iii) capitalizations bonds structured in the traditional modality. The Joint Resolution does not regulate the granting of Fapi as a guarantee.
[2] Except for article 10, which will come into force 12 months after the publication of the Joint Resolution (September 27 of this year). Article 10 provides for the exchange, through electronic systems authorized by the Central Bank of Brazil, of information between the financial institution and the insurance company, capitalization company or open supplementary pension entity.
[3] The Joint Resolution defines the operating company as the insurance company, the open supplementary pension entity and the capitalization company responsible for the administration of the personal insurance plan, pension plan or capitalizations bond subject to the guarantee, as the case may be.