CNseg Annual Report 2009 - English version by CNseg

2009

Annual Report

Brazilian Insurance Industry

Index Presentation 4

Full Disclosure to the Future

Chapter I 11 12 15 17 25

Regulation and Supervision Agencies – Institutional Representation National System of Private Insurance Supplementary Health System Insurance Market – Institutional Representation National School of Insurance – FUNENSEG

Chapter II 27 28 30

Data from Brazilian Insurance Market – Operational Performance Market Operation by Segments and Groups – Classification by Branches of Insurance Data from Market Operations

Chapter III 42 CNSeg and the Institutional Representation of the Market 43 CNSeg – National Confederation of the General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies 52 Direction of Institutional Affairs and Reinsurance – DIRER 59 Technical Consulting – COTEC 64 Direction of Protection to the Insurance – DISEG 69 Central of Services – CESER 82 Direction of Governmental Relationships – DIREG 84 Legal Consulting and Counsel – COJUR and ASJUR 86 Direction of Management and Finances – DIAFI 87 Press Relations and Communication – ASCOM 89 Advisory for Special Projects

Chapter IV 92 FenSeg – General Insurance Segment 93 Good Expectations of the General Insurance

Chapter V 109 FenaSaúde – The Supplementary Health Segment 110 A Year of Changes

Chapter VI 136 FenaPrevi – Personal Coverage Segment 137 The Year and the Triennium

Chapter VII 144 FenaCap – The Capitalization Segment 145 The Capitalization Segment

â&#x20AC;&#x153;

If it were possible, I would write the word insurance on the lintel of every door, and on the forehead of every man, I am convinced that insurance can, through a modest investment, free families from irreparable catastrophes.

â&#x20AC;&#x153;

Winston Churchill

Presentation

Full Disclosure to the Future The report we following present reflects, in general terms, the maturity shown by the Brazilian insurance market during the year 2009, within environment of a global crisis that hit hardly some of the more developed economies of the planet. Amid the uncertainties and concerns about the extent and consequences that could have devastating effects on the productive activity, institutions of the insurance market, shielded by the efficiency and maturity of their business, that knew how to keep beyond the waves of pessimism that, in other countries, affected some of the largest insurance companies in the world. For facing the most acute moments of the crisis, Brazilian insurance market, well-regulated and under sound control by SUSEP supervision, could repress the tide of consequences, which in other countries have reached catastrophic dimensions. The Brazilian insurance market was then able to demonstrate, by reason of the strength of its institutions, its authority to preserve the momentum throughout its productive chain, as regards the production and marketing of life and general insurance, capitalization, private pension and supplementary health. And on the annualized income statement, for the first time in modern history of the Country, the Brazilian economy, and as part of it the insurance market, was raised to the status of efficiency and ability paradigm to absorb the bumps unavoidably resulting from the waves of pessimism. It should be known, before the numbers and facts contained in this Report, that this resistance ability as hardly put to test in 2009, can be understood as actual consequence of a long process of institutional improvement, applied by the companies of the sector, in excellent harmony with the bodies of its corporate representation. And within this context, remembering the history of the last two decades, Fenaseg, and since 2007/08 CNSeg and the Federations, can quite

legitimately claim, to their Executive Offices, Board of Directors, Committees, Working Groups and their Technical Staff, a portion of the credits and authorship in many of the actions that contributed to the modernization of the insurance market, in the consolidation process of the stability of their companies. Therefore, we believe that this Report may also be read, considering a broader view of time, as a synthesis of nearly two decades of our leadership at Fenaseg. To elaborate it, we turned our eyes and our minds to May 6 of 1992, when we assumed the first management at the Presidency of Fenaseg. Since then, and for over seven-year term that followed, engaged in carrying out the mission to seek permanently the improvement of our institutions, we were aware that market development presupposed an individualized institutional effort, aiming at strengthening the dialogue with the three branches of the Government. To further comply with this goal, in 2003 was created the Bills Monitoring System (Sisproleg) that started enrolling and monitoring the prosecution of Bills from the Chamber, Senate and State Legislatures, always where there is clear interest of the market. Sisproleg, by the end of the current term, had about 900 Bills registered, on which subsidies are transferred to the technical, legal and strategic action areas of CNSeg and Federations. In the course of our tenure, in 1992, it was given publicity to the Carta de BrasĂlia, instrument of dialogue and program of action, in which were defined some very important issues of our performance: to increase the standard of information related to the insurance activity as a way to expand the market and its share in GDP; to fight for the improvement of the regulatory milestone; to help for modernization of the Social Security, and to work the health

insurance in competition basis, in compliance with an idea that had been foreshadowed in focus in the Decree-Law 73/66. As initial step, the representative office of Fenaseg in Brasilia was immediately extended, and began to count on a technical team led by an expert on intergovernmental relationships. Two months later, the market received the ideological reinforcement of the Directive Plan of the Insurance System, a paper developed by the Government, where were reaffirmed some issues converging with the desires of the market: proposals for modernization of the insurance activity, policy of tax exemption, solvency control of the companies, opening of the sector to foreign capital, redefinition of the role played by the broker, re-structuration of IRB with gradual reduction of the reinsurance monopoly until its definitive extinction, and regulation of new modalities of insurance, such as agricultural credit and export credit. To fulfill the agenda of duties under its responsibility, Fenaseg started holding a series of technical workshops, meetings with authorities, campaigns of impact with the opinion makers and the people, especially to enlighten and to warn the population about ways of prevention against fraud, robbery and theft of vehicles. Right after, in September of 1993, Fenaseg entered into an agreement with the Ministry of Justice, in order to feed the insurance companies with information from the National Registry of Motor Vehicles. In addition, Fenaseg launched, in 1994, a nationwide campaign of clarification that resulted in the immediate 25% reduction in the statistics on robberies and thefts of vehicles. The systematic fight against fraud was deepened especially from 1997, when became effective the National System of Lien (SNG), intended for registering all vehicles under statutory lien, with retention of ownership or by leasing and, in 2003, when was introduced the Integrated Plan for Prevention and Reduction of Insurance Fraud. Addressed to the broader institutional action on

issues related to fraud, the Plan encompassed the greater diffusion of knowledge and adoption of a series of strategic actions, such as the Insurance Fraud Denouncement Hot-Line, the Fraud Quantification System, the Integrated Register of Public Investigators and the fight against irregular practice of the insurance activity, in joint action with SUSEP. In 1994, according to proposal presented by Fenaseg, took possession two representatives of the market at the board of directors of IRB, unprecedented in the history of both institutions. And also during this year, have been launched the Sectorial Plan of the Insurance Industry, where were analyzed current and future possibilities of business with insurance in the Country, considered various possible economical scenarios. In the Plan was envisaged that, at environment of structural stability in the economical life, the market could add up to U$ 16 million to the annual production of premiums. It should be mentioned that, at the end of the fiscal year of 2009, the global production of the insurance market â&#x20AC;&#x201C; included its segments of insurance, capitalization, private pension and supplementary health - has already reached the amount of US$ 108 billion. A number marks sharply the strategic importance taken by the insurance market in the last years: in 2009, the amount of investments channelled by the sector, which include technical reserves and ownersâ&#x20AC;&#x2122; equity, achieved the mark of R$ 309 billion, figure that represented 9.7% of the national GDP. In 1996 the market recorded the accomplishment of one more proposal included in the Carta de Brasilia: the overthrow of regulatory obstacles to a more effective participation of foreign capital in the insurance industry: this year, more than 20 foreign companies started operating in Brazil. In 1998, when the market was surprised by the restrictive legislation and disinformation that affected outright the Health Insurance operation, Fenaseg, in partnership with Funenseg and Trade Unions of Insurance Companies, started

the implementation of legal forums for judges and opinion makers. It was the beginning of an effort that would be extended for over a decade, facing regulatory obstacles, progresses and setbacks, which did not prevent the growth of the Health Insurance market , that closed the 2007 accounts with revenue above R$ 10 billion. Since then, the segment of insurance companies with expertise in this modality has come to be represented institutionally by FenaSaúde, which continues to grow, with revenue in 2009 above R$ 12 billion. Another program of action proposed by Fenaseg towards modernization of the Brazilian insurance market, was the historical campaign for bringing to an end the reinsurance monopoly in the country. Acting in the determination to place Brazil on equal terms with other reinsurance markets, even subject to progresses and setbacks in the legislative process, Fenaseg recorded pro improvement of the market a number of actually significant achievements: in August of 1996 the change in the wording of Item II, of the Article192 of the Federal Constitution, abolishing the term that preserved an anachronistic market reserve to a single “official reinsurer body”, and the long-awaited enactment of the Complementary Law No. 126, in January of 2007, by which the Brazilian reinsurance market had finally become open to the most free participation of the foreign expertise and capitals. In 2004, by the Presidential Decree No. 5172, it was established a gradual reduction of the Tax on Financial Transactions (IOF) in the life, personal accident and workers’ compensation insurances. Scaled, this reduction was finally zeroed in August of 2006. In addition to this historical turning point in the tax policy for the insurance market, even in August, by Provisional Presidential Decree, it was defined an Income Tax basis more favorable to tax benefit plans that, added to the previous changes, became to encourage the more democratic access of the population to the protector network of insurance, also favoring the permanence of

investors in the products that would promote the formation of long-term domestic savings. We are currently engaged to reduce IOF in the Reinsurance operations. The search for tax basis more favorable to the base growth of insurance customers has led Fenaseg to retake an old flag, whose roots were planted in the Decree-Law 73: the Rural Insurance. Between 1999 and 2001, proposals for regulation of the rural insurance were presented, based in thesis beyond any doubt: the agribusiness sector already represented 21% of the Brazilian GDP, being responsible for 40% of the Country exports, and for generating 37% of the manpower occupied. With the enactment of the Law 10823/03, which created the Subsidy Program to the Premium of the Rural Insurance, intended for expanding coverages and protection to the farming, followed by the Decree 5121/04, which regulated it, the Rural Insurance, already in its definitive outlines, finally, begins to acquire the relevance long-desired by the market and required by the Country. In 2004, Fenaseg renews a declaration of principles and expectations in relation to the insurance activity, by launching the 2nd Sectorial Plan of Insurance Market, at a ceremony held in Brasilia, which was attended by a significant number of ministers, senators and deputies. Prepared by a technicians team from Fenaseg, the Plan has a retrospective view, with mapping of the various sectorial programs previously edited, and materializes in three other parts: analyzes the growth potentialities of the market, the relationships between economical agents and the government, aiming at modernizing the regulatory milestone, and sets goals and actions to be introduced in the operation of the insurance activity in Brazil. Another initiative of Fenaseg in benefit of the modernity of our institutions, was the effort to improve the relationships between companies and consumer, by editing the Code of Ethics of the Insurance Market, together with the

establishment of a Council and a Committee of Ethics, and the creation of ombudsman services. Understood as procedures reengineering tool for the companies, since they allow a permanent evaluation of a flow of accurate information on procedures which must be kept, changed or improved, for the assureds the ombudsman services have been understood as the voice and the ear sensitive to detect and to verbalize fair expectations of those who buy a product to make sure of their best use. In 1998, by Constitutional Amendment that changed the Article 201 of the Federal Constitution, finally the monopoly of the Workers’ Compensation Insurance was brought to an end, an old desire of the market, and subject matter of an institutional battle that had been dragging since the period of Vargas, even before the establishment of Fenaseg in 1951. In 1996, proposal of amendment was approved in the Senate, introducing in the Article 201 of the Federal Constitution, provision that provided for that the coverage for risk of workers’ compensation would be warranted concurrently, by the social security and the private sector. Finally, the monopoly was fully brought to an end in 1998, by the Constitutional Amendment No. 20, and the exclusive attribution for operation of such insurance by the Social Security was definitely over. The issue of social security in Brazil had reached dimensions hitherto unprecedented, especially from 1999 when initiated the prosecution of Complementary Bills which integrated the socalled Social Security Reform. Subject matter of the market interest, whose segment of Open Private Pension had counted on new regulatory structure, from the editing of the Complementary Law No. 109. The discussion and knowledge on this new regulatory model of the Social Security, encouraged and monitored by Fenaseg, in the scope of the insurance activity, more than relevant, was especially timely. Since 1994, the year Fenaseg had presented to the reflection by the government a proposal for reform of

the Social Security – the Proseg – had shown steady and vigorous growth. It started from an income level of R$ 670.38 million, to reach a total funding of pension plans in the amount of R$ 38.7 billion in 2009. In this segment, the performance of two pension products is to be highlighted: Free Benefit Generator Life (VGBL) and Free Benefit Generator Plan (PGBL). PGBL, regulated in 1997, by CNSP Resolution, accounted a growth in the volume of their mathematical reserves, of just over R$ 12 billion in 2003, to over R$ 48.46 billion in 2009. VGBL, whose regulation was enacted in 2001, by the Decree 3633 and CNSP Resolution No. 49, has shown growth even more vigorous in the recent years (328% between 2003 and 2009), it jumped from a sum of reserves of approximately R$ 9.75 billion in 2003, to reach a total above R$ 96.57 billion in 2009. This year, the amount of reserves for the private pension exceeded R$ 176 billion. President Lula himself, while still a candidate in 2002, considering the imbalance existing in the social security – 20 million of retirees against 28 million of taxpayers that year – admitted during interview that the open private pension must be understood as a powerful tool for strengthening of the internal market and source of long-term savings. Such relevance arouse the achievement, from 2002, of a National Forum of Life and Private Pension, whose fourth edition, in 2009, carried out by FenaPrevi, focused on the broad discussion of the private pension issue. The subject matter under discussion at the forums, of serious reflection, has its corollaries. As, for example, the discussion regarding the development of a Biometric Survival and Mortality Table, that the market submitted to SUSEP, already formatted, in the second half of 2009. It is unquestionable, today, the importance of Brazil in the context of a globalized economy. The Brazilian insurance market, now among the top 20 insurance producers over the world,

by premiums volume, did not have how to be aside of transnational discussions. Fenaseg, that since the 40s already participated in international conferences where were discussed directions and future of the insurance activity around the world, by conjuncture imposition, started participating with more actively of such forums promoted over the world. In FIDES, that was already governed by a Brazilian citizen, Clínio Silva, Fenaseg started acting with more emphasis since 1992. It also participates in discussions in the Mercosul, forum where is discussed an agenda of interest of the countries that form this international group.

In many opportunities, Fenaseg / CNSeg representatives accompanied the presidential entourages of Fernando Henrique Cardoso and Luiz Inácio Lula da Silva, on institutional visits to several countries from Europe and Asia, and Business Missions were held with the insurance market and SUSEP representatives with the purpose to better know the open markets of reinsurance and to tighten relationships with the most representative insurance institutions. Evidences regarding the increasing recognition about the relevance of the insurance market, expressed by notable signals of good policy of understanding with the Government.

In another program of globalized action, Fenaseg has also been active in the International Association of Insurance Supervisors (IAIS), an organization based in Switzerland, whose mission is to promote orderly development of the insurance markets and improvement of the market supervision, domestically and internationally. At the same time, since 1996, has worked the International Meeting of Insurance Association (IMIA), that meets international associations of insurance and promotes discussions about the excesses of regulation of the insurance activity in several countries. In 2009 CNSeg hosted the 14th meeting of IMIA, and since 2007 we are affiliated to the International Insurance Association (IIS), institution established in 1965, composed by more than 1000 members from 92 countries.

In March of 2006, President of Fenaseg was appointed by President Lula, to compose the Council of Economic and Social Development (CESD) of the Presidency of Brazil. That same year, President of Fenaseg handed to President Lula at the Palácio do Planalto, in Brasilia, a document-program The Country, the Society and the Brazilian Market of Insurance, Open Private Pension and Capitalization, containing a list of proposals of political and public actions, addressed to the social and economical development of the Country. In 2009, at the celebration of the first anniversary of the enactment of the Complementary Law No. 126, that opened the reinsurance market, CNSeg promoted in Brasilia, with attendance of the Federations and other market institutions representatives, an honor lunch in thanks to President Lula.

In the last two decades, Fenaseg noticeably extended its proximity and presence among policymakers of national interest, and acquired the acknowledgement on the significance of the insurance market in the economical policy. And it has been repeated the visible signals of this new relationship standard between market and Government. In 2001, at a ceremony commemorating the 50th anniversary of Fenaseg, President of Brazil, Fernando Henrique Cardoso honored the Federation with his presence, accompanied by ministers and representatives of the National Congress.

In events held by Fenaseg – as the four editions of the Brazilian Conference of Insurance (CONSEGURO), the institution could count on the attendance of ministers, governors and secretaries of State, in clear demonstration of proactive attendance, where and when the development of the insurance market is discussed. In 2007, was created the Central of Services, which now manages 24 databases, the own database and that from third parties, whose content is

made available to the accredited institutions. Such data are used by insurance companies to the risk acceptance and losses settlement procedures and in the reduction of torts against the insurance. The Central of Services was also a decisive factor for the financial–economic consolidation of representative entities of the sector. Simultaneously to the Central, was appointed its Board of Directors, composed by 11 members representing CNSeg and Federations. It must be mentioned, in 2008, the birth of CNSeg, as crowning of the new model of institutional representation of the insurance market. Besides the institutional representation of the market, were given to the Confederation the challenge of bringing together the major leadership of the marketing, strategic coordination and planning of political actions supra–entrepreneurials of the sector, and development of activities common to the interests of the four associated Federations, established in 2007. Finally, it is worth highlighting the most current focus of attention by the insurance market – the Microinsurance. Actions on the subject matter were marked by several meetings at countries that have successfully implemented this modality, and international partnerships, such as the recently established with the International Labour Organization (ILO) to develop project

on “change of perception on the insurance for the low-income population” and with CENFRI. We participated in the Advisory Committee on Microinsurance from SUSEP and created the Committee on Microinsurance with the Federations representatives, with the purpose to contribute for realizing this tool able to mitigate the poverty effects and to prevent the economical shocks that affect more than 100 million of Brazilian people of this group of the population and who are not reached by the traditional insurance market. As an introduction to the Insurance Market Report of 2009, this narrative aims at being only a summary of what has been the fulfillment of a promise and the acceptance of a commitment of work, on behalf of the development of the Brazilian insurance market, and could not have other ending than the presentation of the photograph, in facts and figures, of the present time of Fenaseg and our institutions. We present it as a review of the past, and as a certainty that the compliance with eighteen years-term as President of the Federation, were worth to all of us, Executive Officers, Board of Directors, and Technicians of Fenaseg, a full disclosure to the future.

João Elisio Ferraz de Campos President of Fenaseg

Annual Report

2009 10

Chapter I

Regulation and Supervision Agencies Institutional Representation

National System of Private Insurance It is private authority of the Federal Government to elaborate the policy of private insurance, to establish its standards and to supervise the operations in the Brazilian market. The DecreeLaw no. 10.190/2001 and the Complementary Law no. 126/07 dispose on the policy of reinsurance, retrocession and its intermediation, the operations of co-insurance, the contracting of insurance abroad and the operations in foreign currency of the insurance industry. They also amend the Decree-Law no. 73, dated November 21th, 1966, and the Law no. 8.031, dated April 12th, 1990; and set other arrangements.

•

• • •

• The National System is composed by the National Council of Private Insurance (CNSP), Superintendence of Private Insurance (SUSEP), companies authorized to operate with private insurance, reinsurance and capitalization, open private pension entities and qualified insurance and reinsurance Brokers.

National Council of Private Insurance (CNSP) CNSP is liable for determining the guidelines and standards of the private insurance policy in Brazil. Its composition was defined by the Decree-Law no. 73/66, being subsequently amended by the Law no. 10.190, dated February 14th, 2001. CNSP is composed by the Minister of Finance, the Superintendent of SUSEP and representatives of the Ministry of Justice, Ministry of Social Security, Brazilian Central Bank and Securities Commission. From the private authority of the CNSP, it may be highlighted the following activities: • To determine guidelines and standards for the policy of private insurance; • To regulate the constitution, organization, operation and supervision of those that carry out activities subordinate to the National System of Private Insurance, as well as the 12

application of the penalties as prescribed; To stipulate the general characteristics of the insurance, open private pension, capitalization and reinsurance agreements; To establish the general guidelines for the reinsurance operations; To be aware about appeals the decisions of SUSEP; To set forth the constitution criteria of the insurance companies, capitalization companies, open private pension entities and reinsurance companies, stipulating the legal and technical limits of their operations; To regulate the brokerage of the market and the Broker profession.

Council of Appeals of the National System of Private Insurance, Open Private Pension and Capitalization (CRSNSP) The Council of Appeals of the National System of Private Insurance, Open Private Pension and Capitalization, established by the Decree no. 2.824/98, is a collegiate body that forms part of the basic structure of the Ministry of Finance. Its purpose is to judge, in administrative court of last resort, appeals the decisions of SUSEP that apply penalties, in cases provided for in the Decree-Laws nos. 73/66 and 261/67 and in the Law no. 6.435/77, currently replaced by the Complementary Law no. 109/2001. CRSNSP is composed by six members, being a representative of the Ministry of Finance, as President, a representative of SUSEP, a representative of the Secretariat of Economic Law of the Ministry of Justice, a representative of FENASEG, a representative of ANAPP, currently FenaPrevi and a representative of FENACOR. A Counsel to the Federal Treasury acts at the CRSNSP in charge of the duly compliance with the laws, decrees, rules and other regulatory acts.

Superintendence of Private Insurance (SUSEP) Superintendent: Armando Vergilio dos Santos Junior SUSEP is a special Autarchy bound to the Ministry of Finance, whose function is to regulate and to supervise the markets of insurance, open private pension, capitalization, reinsurance and qualified Brokers. In the last years, SUSEP has been promoting important changes in its regulatory acting, seeking to be aligned with the best international practices of control and supervision of the insurance market, aiming at promoting transparency and creating mechanisms to improve the corporate governance of entities of the sector. Among these changes, it may be highlighted the implementation of a risk-based supervision and the introduction of new rules of solvency for the market. In 2009 the insurance Market grew around 13% over 2008, overcoming the expectations of the industry that kept unharmed before the global financial crisis. The main step that protected the insurance market was the implementation of the new rules of solvency, which precluded the enforcement of the collaterals of the technical reserves in the international market. In 2010, with the insurance companies sound and capitalized, the insurance industry expects to achieve a growth of up to 20%. In less than two years from the opening of the reinsurance market, in addition to the IRB, 72 Reinsurance Companies are already operating in Brazil, attracted by the need of guarantee for the macro-structural projects such as Accelerate Growth Program (PAC), My Home My Life, exploration of the pre-salt, World Cup and Olympic Games, among several others to come. The country is also getting prepared for the establishment of Microinsurance, products that aim at benefiting the low-income population. Microinsurance will be the major tool for the social and financial inclusion of about 100 million people, currently not covered by insurance. In March 2010 SUSEP created the Permanent Special Committee, bringing together the Board of the Autarchy and the main leaders of the industry, with the purpose to analyze the economical moment of the Insurance Market and to propose alternatives to increase the growth and development of the supervised markets.

SUSEP Restructuration With the publication of the Decree No.7.049/2009, the Superintendence of Private Insurance has initiated the process of organizational restructuration, so that to adjust the structure of positions and duties to their tasks. Besides the 34 new commission-paid positions, the measure will strengthen the performance of SUSEP between insurance consumers and general public, as statutory provision associated with the hiring of 250 new servants through competitive civil-service examination, of which 138 will take office in 2010. The major changes made include the extinction of the former Departments (DECON, DETEC, DEFIS and DEAFI) and the creation of eight Offices of General Coordination, streamlining, better structuring and distributing the technical and occupational activities carried so far. The four Directions, which in the previous model had no direct hierarchical relationship with the technical sectors, became legally liable for specific tasks and authorities, separated into Supervision, Technical, Authorization and Administrative areas, as follows: • In the Direction of Authorizations (DIRAT) are allocated the Offices of General Coordination for Registration and Authorizations (CGRAT) and for Products (CGPRO); • In the Technical Direction (DITEC) is the Office of General Coordination for Solvency Monitoring (CGSOA), in charge of monitoring liabilities and assets, property and risks inherent to the insurance transactions; • In the Direction of Supervision (DIFIS) are the Office of General Coordination for Direct Supervision (CGFIS) and the new Office of General Coordination for Trials (CGJUL), where will be administered and tried all the sanctioning administrative processes; • In the Direction of Administration (DIRAD), are the following Offices of General Coordination: Administration, (CGADM), Planning (CGPLA), and Information Technology (CGETI); • In its structure, reporting directly to the Superintendent, are Internal Audit, Internal Affairs, Federal Attorney-General at SUSEP and the General Secretariat, to which the Department of Customer Service, expanded in this new model with the purpose of providing better service to the insurance customer and the general public. 13

ASIMP

AUDIT

COAUD

ERGDF

Secretariat

Litigious Cases – Judicial

Litigious Cases – Administrative

COGER

Cases – Consults, Corporate Affairs And Special Regimes

ASTEC

DIRAT

COSEC

Cases – Administrative Affairs

ASTEC

DIRAD

PA Department Head (FG – 1)

MG Department Head (FG – 1)

DICAL

DIATE

CODIN

SP ADM. (101.1)

CODOC

RS ADM.(101.1)

COATE

SEGER

DIIRE

SECRETARIAT

Attorney General

TECHNICAL ASSISTANT

Execution Bodies – Counsel To The Federal Government

Coordination

COPAC

ASPAR

SECRETARIAT

ASTEC

GABIN

Superintendent

ASTEC

DIFIS

CRSNSP

CNSP ASSISTANT

COLEGIATE ASSISTANT

CORIN

ASTEC

DITEC

DIPAM

Collegiate

Supplementary Health System The Law no. 9.656/98 defines Health Care Plan Provider as being the Legal Entity constituted under the modality of civil association or business corporation, cooperative or self-management entity, that operates product, service or contract of continued rendering services or coverage of care costs at pre or post established price, for undetermined term. Its purpose is to ensure, without financial limit, the health care, according to faculty of access and serving by professionals or health services, freely chosen, that take part or not in the accredited, agreed or referenced network, aiming the medical, hospital and dental care, payable fully or partially to the expenses of the agreed operator, upon reimbursement or direct payment to the provider, on account and order of the consumer. The Supplementary Health segment includes the following operation modalities: • Benefits Administrator: legal entity that proposes the contracting of group plans as stipulator or that provides services to Legal Entities that contract private and group health care plans; • Self-management: entities that operate health care services or companies that through its human resources department are liable for the private health care plan of their acting and retired employees, pensioners and former employees and respective family groups, as well of the participants and dependents of associations of Natural Persons or Legal Entities, Foundations, Trade Unions, professional associations or similar;

• Medical Cooperative: non-profit association of people, constituted as set forth in the Law no. 5.764/71 (General Law of cooperativism), that operates private health care plans; • Dental Cooperative: non-profit association of people, constituted as set forth in the Law no. 5.764/71 (General Law of the cooperativism), that operates exclusively dental plans; • Philanthropy: non-profit entities that operate private health care plans and that obtained Certificate of Philanthropic Entity at the National Council of Social Care (CNAS) and Declaration of Federal, State or Municipal Utility issued by qualified agencies; • Group Medicine: companies or entities that operate private health care plans, unless those classified under the previous modalities; • Group Odontology: companies or entities that operate solely dental plan, unless those classified under the previous modalities; • Specialized Health Insurance Company: insurance companies authorized to operate health insurance, which their Articles of Incorporation shall prohibit to operate any other branches of insurance. In 2001, the Law no. 10.185 required that the insurance companies that already operated in the health insurance segment became to be specialized insurance companies, being subject to a new regulatory and supervisory structure bound to the Ministry of Health, jointly with other modalities of private health plans operators.

Ministry of Health (2)

(1) (3)

Suplementary Health Chamber

(4)

ANS

CONSU

(5)

Health Care Plans Operators

Administrator

Medical Cooperative

Dental Cooperative

Specialized Health Insurance Companies

Group Medicine

Group Odontology

Philanthropy

Self Management

Relationships: (1) Bound (2) Regimental (3) Consultative (4) Propositional (5) Regulation and Supervision

Council of Supplementary Health (CONSU) Established by the Law no. 9.656/98 and subsequently amended by the Decree no. 4.044, dated December 6th, 2001, CONSU is the collegiate body part of the regimental structure of the Ministry of Health, being composed by the Ministry of Justice – who chair it -, the Ministry of Health, the Ministry of Finance and the Ministry of Planning, Budget and Management, and also the President of ANS, who acts as Secretary of the meetings. The CONSU authority is to carry out the following activities: • To establish and to supervise the enforcement of policies and general guidelines of the supplementary health segment; • To approve the ANS management agreement; • To supervise and to monitor the ANS actions and operation; • To stipulate general guidelines for the constitution, organization, operation and supervision of the companies that operate products referred to in the Law no. 9.656/98; • To deliberate on the creation of consultative technical chambers, so that to subsidize the decisions.

National Agency of Supplementary Health (ANS) Established by the Law no. 9.961, dated January 28th, 2000, ANS is autarchy under special regime, bound to the Ministry of Health.

Its mission is to promote the defense of the public interest regarding the supplementary health care, regulating the operators from different segments, including in respect of their relationships with providers and consumers, contributing thereby for the development of the health actions in the country. Their authorities that may be highlighted are the following: • To propose policies and general guidelines to the National Council of Supplementary Health (CONSU) for regulation of supplementary health sector; • To establish parameters and indexes of quality and coverage in health care for the services provided by the operators themselves and those provided by third parties; • To establish standards for reimbursement to the Single Health System; • To regulate the concepts of pre-existent disease and injury; • To define, with purpose to apply the Law no. 9.656/1998, the segmentation of the operators and administrators of private health care plans, in pursuance with their peculiarities; • To decide on the establishment of the sub segmentations to the types of plans defined in the Items I to IV of the Article 12 of the Law no. 9.656/1998; • To authorize readjustments and reviews of the pecuniary considerations of the private health care plans, according to the general parameters and guidelines stipulated jointly by the Ministry of Finance and the Ministry of Health;

• To set rules and standards to send economicfinancial information by the operators, aiming the ratification of the readjustments and reviews; • To supervise activities of the operators of private health care plans and to see that the rules relevant to their operation are being complied with; • To become joined to the bodies of consumer defense, aiming the effectiveness of the protection and defense of the consumer of private health care services, in accordance with the set forth in the Law no. 8.078, dated September 11th, 1990.

Supplementary Health Chamber Consultative Chamber of the ANS structure, as per the Law no. 9.961/2000, whose main purpose is to promote the discussion of relevant themes for the supplementary health sector in Brazil, in addition to subsidize the ANS decisions. The Supplementary Health Chamber is composed by the following members: • by the CEO of ANS, or his/her deputy, as President; • by a Director of ANS, as Secretary; • by a representative of everyone of the following Ministries: Finance, Social Security, Work and Job, Justice, and Health;

• by a representative of each body and entity as following: National Council of Health; National Council of State Health Secretaries; National Council of Municipal Health Secretaries; Federal Medical Council; Federal Dental Council; Federal Council of Nursing; Brazilian Federation of Hospitals; National Confederation of Heath, Hospitals, Establishments and Services; Confederations of the Santas Casas de Misericórdia, Philanthropic Hospitals and Entities; National Confederation of Industry; National Confederation of Commerce; Workers’ Central Labor Union; Trade Union Council; Social Democracy Trade Union; National Federation of Private Insurance and Capitalization Companies (FENASEG), succeeded by FenaSaúde; Brazilian Medical Association; • by a representative from every of the following entities: self-management segment of health care; companies of group medicine; cooperatives of medical services that act in supplementary health; companies of group odontology; cooperatives of dental services that act in the supplementary sector; • by two representatives of following entities : consumer defense, associations of consumers of private health care plans, entities of people with special needs and pathologies.

Insurance Market - Institutional Representation The creation of CNSeg by the Associative Federations, in August 2008, was another step towards implementation of the Confederation Project which started in 2005 from the proposal prepared by the consulting firm Booz Allen Hamilton and counted on Specialized Legal Advice.

decentralize the management of the various economic categories.

The change in the institutional representation model was guided by the pursuit of confirmation on the representative autonomy of the sector, holder of exclusive and unique characteristics that mark an economical modality distinct from all the others. Moreover, the growth of the sector and the complexity of the operations of the insurance industry pointed to the need to

The Associative Federations were created in 2007, by direct vote of its respective associated, and perform functions and develop actions in the specific interest of its represented areas.

CNSeg is associative organization, while Fenaseg remains as the trade union higher level representation entity, associated to CONSIF – National Council of Financial System.

In November 2009 were held Board elections for 2010/2013 term.

National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg)* President: João Elisio Ferraz de Campos

The Purposes of CNSeg are the following: • To promote and to defend the institutions of private insurance, capitalization, supplementary health plan and private pension; • To represent, before the public authorities, the interests of the economic categories of the federate institutions; • To collaborate with the government in the study, on the preparation of laws and solutions related to their economic categories; • To indicate the representatives of the economic categories of its affiliates to

participate in events that deal with subject matters relevant to their activity; • To keep consulting and advice services to its affiliates and to develop technical studies and to prepare proposals concerning to the interest of the market, especially with regard to deregulation and to make flexible the monopolies; • To promote harmony among its operating affiliates, settling differences when eventually arisen. * Full Report on Chapter III

National Federation of General Insurance (FenSeg)* President: Jayme Brasil Garfinkel

FenSeg is focused on the development of specific activities of the branches of insurance whose segment is referred to as “general insurance”. Its purpose is to bring together and to represent its members even before the Government, seeking to strengthen the economic sectors and its relationships with society, so that to contribute to the economical and social development of the Country, and its purposes are the following: • To exercise the political and institutional representation of the insurance segments; • To promote the permanent defense of the interests of the segment represented at the market, government, institutions of the civil society and further entities; • To represent its affiliates judicial or extrajudicially; • To act in the creation and improvement of laws, rules and regulations that increase the efficiency of the economic sector represented, upon interaction and cooperation with authorities and institutions of the civil society, in the scope of its operations; • To establish and to implement policies aimed at market development, in the scope of its operations; • To support and to develop actions for implementation of public and private policies of interest by the represented sector;

• To promote the integration amongst the members; • To indicate or to nominate representatives at the public and private agencies, in the scope of its operations; • To develop research and projects, in the scope of its operations; • To develop program for training, qualification and professional certification; • To disseminate relevant information for its members on topics about its operations; • To promote the dissemination of the sector activities and to produce material for diffusion and enhancement of the institutional image; • To promote and to hold events; • To form and to coordinate Technical Committees and Working Groups; • To comply with the Code of Ethics and to implement self-regulation actions; • To answer the requests made by its members to guide initiatives or arrangements related to the exercise of their own activities; • To create and to keep the structures necessary to achieve their goals and to meet the needs of the members. * Full Report on Chapter IV

National Federation of Supplementary Health (FenaSaúde)* President: Geraldo Rocha Mello

President Geraldo Rocha Mello resigned the presidency of FenaSaúde in December 9, and the Vice-President, Mr. Heráclito de Brito Gomes Júnior assumed ad interim. The National Federation of Supplementary Health (FenaSaúde), representation entity of the operators of supplementary health plans, congregates business groups that act in this segment. Among other duties, FenaSaúde is liable for defending the stabilization of the regulatory milestone of the supplementary health, diagnosing problems, encouraging discussions on business challenges and identifying effective solutions for the market expansion. The entity shoulders the responsibility to make the society conscious on the importance of the supplementary health for Brazil. This is the summary of the goals of FenaSaúde, entity established in February 2007, with registered office in Rio de Janeiro. The supplementary health market is changing, with a strong regulatory influence, greater social control and new patterns of competition and integration of the production chain. This brings opportunities for the private operators to share experiences, to promote the organized discussion about the main challenges for the sector and to strengthen its institutional representation before the society and the Government. Within this context, the mission of FenaSaúde is to contribute to the consolidation of the health care’s private market, sharing experiences and

evaluations of common interest issues, elaborating proposals for growth and development of the market and its strengthening as institutional representation of the private operators of supplementary health. FenaSaúde has as values the following: • To be an important representation channel of the members, through common ideas, proposals and tools for the valorization and sustainability of the private activity of health care and best practices to serve the population beneficiary; • To appreciate its members, respecting and embracing their diversity and freedom of opinion; • To provide the best conditions within its reach to keep the members informed on common interest key issues; • To keep permanent forums of discussions, exchange of experiences, knowledge production and development of proposals on care, economic and financial, legal, technical and operating aspects of the supplementary health care sector; • To seek permanently teamwork, encouraging the participation of all the members; • To maintain agility in the development of works with well-scaled operational structures to meet the needs of the members; • To aim constantly the transparent communication with the society; • To encourage citizenship and social responsibility practices. * Full Report on Chapter V

National Federation of Open Private Pension and Life (FenaPrevi)* President: Antonio Cássio dos Santos

FenaPrevi aims to bring together and to represent active companies and entities in the country, that operate in the open private pension and personal insurance, and its purpose is to strengthen the economic sectors where operate their members, contributing to the economical and social development of the Country. FenaPrevi counts on institutional members and effective members, the second ones necessarily Open Private Pension Entities, profit and non-profit, operating in the sectors of personal insurance and/or open private pension. For analysis of related issues, and also relevant functional framework, it counts on the collaboration of several thematic Technical Committees, specialized by interest areas. The mission of FenaPrevi is to contribute to the development of the segments of personal insurance and open private pension, representing institutionally its members, at the regulatory agencies, market and community. The values of FenaPrevi are the following:

• Continuous Excellence: To work focused on strategic goals, creating alternatives that bring tangible results and benefits to the members; • Transparent Communication: To make available information that add value by working seamlessly with the members and the community; • Teamwork: To develop actions together with the members, respecting differences and interests of the sector; • Respect for Diversity: To develop and to sponsor actions that respect and valorize the individual and cultural differences; • Ethics: To preserve our values, through rectitude as independent institution, aiming interests of the members and community; • Commitment to Community: To build credibility through responsible action and aligned to the values of FenaPrevi; • Innovation and Creativity: To develop innovative and creative solutions to the challenges of the sector. * Full Report on Chapter VI

• Focus on the Members: To perform actions aligned to strategic interests, listening to and respecting their needs and assessing the impacts on business;

National Federation of Capitalization (FenaCap)* President: Ricardo José da Costa Flores

FenaCap is entity of institutional representation of the capitalization companies, recognized by the society and its members, with capacity to promote the capitalization bonds as economical and social development tool. Among other objectives, FenaCap promotes the permanent defense of interests of the segment; represents the members, judicial or extra-judicially; acts in the creation and improvement of laws, standards and rules that

increase the efficiency of this economic sector. It is also in charge of conduct research and projects, promote the dissemination of actions of the sector and care the improvement of the institutional image of the market, in addition to contribute to the training, qualification and to provide professional certification. *Full Report on Chapter VII

State Trade Unions The trade unions remain affiliates with Fenaseg, that even with the creation of the new Confederation (CNSeg), continues to exist as trade union representation entity and take part of its Board of Directors. The non-profit Open Private Pension Entities have been congregated into a single National Trade Union, which is affiliate to FenaPrevi. In October 2009 the Articles of Incorporation of Fenaseg and CNSeg were amended. They now predict the presence of State Trade Unions at the Board meetings of CNSeg every three months.

Trade Union of Private Insurance, Reinsurance, Open Private Pension and Life, Supplementary Health and Capitalization Companies of the States of Bahia, Sergipe and Tocantins President: Antonio Tavares Câmara Trade Union of Private Insurance, Reinsurance, Open Private Pension and Capitalization Companies of the States of Paraná and Mato Grosso do Sul President: João Gilberto Possiede

List of the Trade Unions:

Trade Union of Private Insurance, Capitalization, Reinsurance and Open Private Pension Companies of the State of Rio Grande do Sul President: Miguel Junqueira Pereira

Trade Union of Private Insurance, Reinsurance, Open Private Pension and Capitalization Companies of the State of Santa Catarina President: Paulo Lückmann

Trade Union of Private Insurance, Open Private Pension and Capitalization of the State of São Paulo President: Mauro César Batista

Trade Union of Private Insurance, Reinsurance, Open Private Pension and Capitalization Companies of the States of Rio de Janeiro and Espírito Santo President: Luiz Tavares Pereira Filho

Trade Union of Private Insurance Companies, Reinsurance, Open Private Pension and Capitalization Companies of the State of North and Northeast President: Múcio Novaes de Albuquerque Cavalcanti

Trade Union of Private Insurance, Reinsurance, Open Private Pension and Capitalization Companies of the States of Minas Gerais, Goiás, Mato Grosso and Distrito Federal President: Luciano Macedo Lima

National Trade Union of Open Private Pension Entities President: Francisco Alves de Souza

National Federation of the Insurance Brokers (FENACOR)

Representatives Committee Audit Committee Presidency 5 Vice Presidencies for Statutory Affairs 5 Vice Presidencies for State Affairs

Committee for Fund Management

Representative to CNC Political Committee

Board Secretariat

Board of Benefits and Second Secretary

Fenacor, the National Federation of Private Insurance and Reinsurance Brokers, Capitalization, Open Private Pension and Insurance and Reinsurance Brokerage Companies, is a higher level trade union entity, which was officially established on March 21th, 1975, when the Ministry of Labor and Employment issued the State Trade Union Letter. It represents judicial and extra-judicially 26 Affiliate Trade Unions, in the Federation Units and aims at protecting and defending the basic interests of the economic class it represents, before the private entities and public authorities. Affiliate with the National Confederation of Goods, Services and Tourism Business (CNC), the Federation also has the duty of supporting the public authorities in the studies and attempting to solve the problems related to the category and the insurance market; and providing technical and legal assistance to the affiliate Trade Unions, including technical and operational advice to policyholders and beneficiaries of DPVAT Insurance, through its network of affiliate Trade Unions and its state offices. Further, by duties delegation of SUSEP, FENACOR is in charge of the examination of applica22

Board of Treasury

Board of Equity and Second Treasurer

tions for professional registration of insurance brokers for General Insurance, Life, Capitalization and Open Private Pension, changes in registrations and also the re-registration of Natural Persons and Legal Entities, held every three years since 2002.

State Vice Presidents In order to expedite the compliance with a request made by Trade Unions and professionals from all over the Country and thus to increase the reach of the performance of the entity, FENACOR created five State Vice-Presidencies. Currently, the states Vice-Presidents are Fábio Lúcio de Souza Costa (North), Carlos Alberto Valle (Northeast); Jair Gonçalves da Cunha (Midwest), João Leopoldo Bracco de Lima (Southeast), and Arthur Oscar Nogueira Hoff (South).

Political Committee Composed by 5 (five) Trade Unions Representatives, Presidents of the following Trade Unions: Rio Grande do Sul Celso Marini; Goiás Joaquim Mendanha; Distrito Federal Dorival Alves, and the Vice-President of Fenacor, Roberto Barbosa and the Vice-President on South Area, Arthur Hoff.

Full Board The Full Board for 2007 - 2010 term is formed by the following members: President

Robert Bittar

Vice-President

Sérgio Alfredo Petzhold

Vice-President

Nelson Peixoto Feijó Filho

Vice-President

Lúcio Araújo da Cunha

Vice-President

Roberto Silva Barbosa

Chief Secretary

Paulo Thomaz

Director of Benefits

Bertier Cândido de Oliveira

Treasurer Director

Cláudio Simão

Equity Director

José Rômulo da Silva

Code of Ethics The Code of Ethics aims at disseminating amongst Brazilian population the Ethical Principles that guide the professional behavior of the Brokers and Brokerage Companies when conducting business. It is an important step towards the self-regulation, since State Committees of Ethics were also created to be in charge of judge, at first instance, complaints of irregularities committed by insurance Brokers within their jurisdiction. In second instance, the trial shall be in charge of the National Committee of Ethics established by Fenacor that shall forward the result to the Superintendence of Private Insurance (SUSEP) in order to be taken the steps provided for in law.

Management Tools The defense of the interests of the represented class goes through technical, administrative and people management training. With this goal in mind Fenacor developed, directly or through partnerships, some management tools whose goals mixed larger visibility for Brokers and Brokerage Companies when doing business, communication channels, security and agility of the information and system of management expertise, being the later, specific to the Trade Unions represented.

Portal of the Insurance Brokers - Visibility It is a dynamic portal of information and development of personalized home page, exclusive for Brokers and Brokerage Companies on the internet. Broker Responds – Communication Channels Communication channel between market and Federation very much used for clarify doubts and formulate suggestions. Digital Certification – Security and Agility of the Information Since 2005 Fenacor, in partnership with SERASA according to the ICP-Brasil standard, is confirmed as Certification Agency, and can issue Digital Certificates – Fenacor. This important management tool allows the Broker or the Brokerage Company to get agility, security and economy of fixed costs when doing business. SEGS – System of Trade Union Management Expertise – Administrative Management, Processes and People Project implemented in partnership with Federal Confederation of Goods Commerce, Services and Tourism (CNC), is a program that encourages the development of the management expertise of the Federations and Trade Unions affiliated with the Sicomercio, by criteria based on fundamentals of National Premium of Quality (PNQ). The main goals are: • To allow identification by the entities of the development level (maturity) of the trade unions entities in the following aspects: associativism, representativeness, directive structure, financial management and products and services offered; • To qualify leaders at management practices of recognized expertise that enable to improve the action of Trade Unions and Federations of goods commerce, services and tourism; • To enable the sharing of management practices of successful (benchmarking); • To provide the individual growth of leaders and trade unions officers and, therefore, of entities and companies represented.

The Brazilian Association of Reinsurance Companies (ABER) The Brazilian Association of Reinsurance Companies (ABER) was established in July 2007 with the goal of representing the institutions that operate in this segment in the country. Amongst the duties of the entity are actions of great importance, such as to work in the establishment and improvement of laws, standards and rules that increase the efficiency of this market, through the work of interaction and cooperation with authorities and institutions of the civil society. ABER counts on a staff of 21 reinsurance companies as members. The recent opening of the Brazilian reinsurance market has brought to the country some companies with extensive international expertise and gave opportunity for groups of national insurance companies to extend their operations for this segment. The role played by ABER as development agent of programs for training, qualification and professional certification shall be crucial to enable professionals to work in this newly opened market. Allied to this, another important pillar of the work of ABER is the creation and sponsorship of social projects. President: Paulo Pereira - Transatlantic Reinsurance Company - Escritório de Representação no Brasil Ltda. Vice-President: Henrique de Faria Abreu de Oliveira - Swiss Re - Escritório de Representação no Brasil Ltda. Directors: 1. José Carlos Cardoso (SCOR Reinsurance - Escritório de Representação no Brasil Ltda.) 2. Kurt Ernst Müller (Münchener Rück do Brasil Resseguradora S/A) 3. Juan Bosco Fancoly (Mapfre Re do Brasil) 4. Ronald Kaufmann (Scor Global Life U.S. Re Insurance Company - Escritório de Representação no Brasil Ltda.)

5. Túlio Hernan Moreno Torres (XL Re Latin America - Escritório de Representação no Brasil Ltda.) 6. Cid Carlos Andrade Junior (Catlin Brasil Serviços Técnicos Ltda.) 7. Guillermo León (American Home Assurance Company - Escritório de Representação no Brasil Ltda.) 8. David Preti (PartnerRe - Escritório de Representação no Brasil Ltda.) 9. Ivan G. Passos (Hannover Re - Escritório de Representação no Brasil Ltda.) 10. Marco Antonio de Simas Castro (Lloyd’s - Escritório de Representação no Brasil Ltda.) 11. Bruno Motta (Everest Reinsurance Company - Escritório de Representação no Brasil Ltda.) Members: 1. Alvaro Madroñero (PartnerRe - Escritório de Representação no Brasil Ltda.) 2. Luiz Alberto Pestana (J. Malucelli Resseguradora S/A) 3. Carlos Roberto Vairo Filho (Gen Re Kölnische Rückversicherungs-Gesellschaft AG) 4. Elizabeth Vieira Valente Bartolo (Transamerica International RE - Escritório de Representação no Brasil Ltda.) 5. Reinaldo Antunes de César (Mitsui Sumitomo Insurance Company Limited - Escritório de Representação no Brasil Ltda.) 6. Paul Conolly (Liberty Mutual Insurance Company - Escritório de Representação no Brasil Ltda.) 7. Elizabeth Kavanagh Alves (Federal Insurance Company) 8. Thomas Kelly Batt (Royal & Sun Alliance Insurance PLC - Escritório de Representação no Brasil Ltda.

Brazilian Association of the Reinsurance Brokerage Companies (ABECOR-RE) ABECOR-RE was founded on March 29th, 2005. It is a non-profit civil association. The registered office and jurisdiction of the Association is located in the city of Rio de Janeiro, at Rua da Candelaria, 9 - grupo 407 – telephone number (55-21) 2223-0742. ABECOR-RE congregates most of the reinsurance brokers so far authorized to operate in Brazil, by SUSEP. The major goal of ABECOR-RE is to promote the development, enhancement and diffusion of reinsurance brokerage, as well as to represent all of its members in subject matters of collective interest between public organisms and professional associations. The directors and counselors elect for 2009/2011 term are the following: Directors Chief Executive Officer – Carlos Alberto Lenz Cesar Protasio Chief Administrative and Financial Officer – Roberto da Rocha Azevedo President of the Deliberative Board – Jorge Luiz Dias Caminha President of the Audit Committee – Jose Mauricio Pereira

Counselors: Francisco Pinho de Barros Alison Jane Spooner Correa do Lago Marco Aurelio Badaro Braga Antonio Henrique B. Cunha Bueno Marcio Correa Carlito Pereira Fabio Basilone Paulo Leão de Moura Jr. Claudio Albano Araújo Rodrigo de Oliveira Franco Protasio Antonio Carlos Claro Rodrigo Londres Victor Maia Renata Lima ABECOR-RE has participated in several seminars in Brazil and internationally along with CNSeg divulging the opening of the reinsurance at the Lloyd’s, Amcham / Nova Iorque, IUA, IIS, AIDA, FIDES. In partnership with Euromoney Seminars and Reactions Magazine held the 1st and 2nd Brazilian Conference of Reinsurance.

National School of Insurance (FUNENSEG) President: Robert Bittar Vice-President: Mauro César Batista Director of Education and Products: Nelson Victor Le Cocq Director of Research and Development: Claudio Roberto Contador State Director of São Paulo: João Leopoldo Bracco de Lima Administrative and Financial Superintendent: Paola Casado Commercial Superintendent: Henrique Berardinelli Executive Director: Renato Campos Martins Filho In 2009, National School of Insurance – Funenseg concentrated great part of the investments to

expand its activities all over the national territory, providing the professional qualification of the sector to a even higher number of cities. The institution has succeeded in its strategy to overcome more than 6% the number of entries made in the previous year. It accounted, in general, more than 44,000 attendances in courses, events and other educational programs developed by the School in all the regions of the country. This large reach was only possible thanks to the work of 14 regional units of the entity, which once again received infrastructure improvements, and also through partnerships with Trade Unions and education institutions.

One of the most important products of the School, the Course for Insurance Brokers Qualification, is the example that better illustrates the growing reach the institution is achieving, year after year. In 2009, 42 cities received qualifying classes of Brokers, five more compared to 2008.

of professionals who live in places where the school does not count on regional unity. With support of new tools and a methodology that prioritize the personalized service, 2,085 students participated in the activities of the EAD.

At the end of the year, taking into account courses and examinations, were issued 8,921 new certificates at the three phases of the course – Capitalization, Life and Pension, and Other Branches.

Another activity that has shown growth every year is that of events. The free lectures that occur not only in big capitals, but also in many small cities, and the technical seminars, were attended by over 21,000 participants in 49 different cities.

Released in Rio de Janeiro in 2006, the Graduation in Administration with Emphasis in Insurance and Pension began in 2009, its seventh class in Rio, and reached another milestone the beginning of activities in Sao Paulo, with the formation of the first class in the second half, ending the year with 205 graduates, considering the two cities. The Executive MBA in Insurance and Reinsurance, created in 2008, established itself as the best option for professionals who seek expertise in the industry. In Rio, three classes are ongoing and, with the implementation of other two in São Paulo, 170 postgraduate students are being qualified. Also in the Education area, the distance learning modality (EAD) made possible the qualification

In the editorial area, the School is the absolute reference in the publication of titles relating to insurance, capitalization, open private pension, reinsurance and risk. Throughout the year, 25 new works were launched. Also were issued six editions of the “Cadernos de Seguro”, the main technical magazine of the market, which circulates continuously for more than 28 years. The last great news came at the end of the year, with the first version of the “Tudo sobre Seguros”, portal directed to the society in general that aims at clarifying questions on the several insurance modalities. The idea is to make the website a reference for the market and also for all the public that is not directly related to the insurance industry.

Chapter II

Data from Brazilian Insurance Market Operational Performance

Market Operation by Segments and Groups Classification by Branches The Brazilian insurance market is composed by 92 branches, separated into 16 groups within four major segments: general insurance, health insurance, personal and capitalization. The general insurance segment is formed by 12 groups, comprising 77 branches. Within this segment are classified the risks insurance coverage, involving goods and property, and their related responsibilities. The health insurance segment, which guarantees to people the access to private medicine – hospitals, clinics and skilled professionals – is composed by two branches: individual health- insurance and group health-insurance. Within the segment, group health-insurance has been gradually assuming greater relative

General Insurance Segment Motor Group 0520 – Personal Accidents Coverage for Passengers of Land Motor Vehicles 0523 – Liability – Interstate and International Land Transit Carrier 0524 – Extended Guarantee/Mechanical 0525 – Green Card 0526 – Popular Motor Insurance 0531 – Vehicles 0544 – Liability – International Transit Carrier (Cargo) 0553 – Facultative Motor Liability Property Group 0111 – Traditional Fire Policy 0113 – Glasses 0114 – Homeowners 0115 – Theft/Robbery 0116 – Comprehensive Condominium Coverage 28

importance, surpassing in production volume, the individual health-insurance. In the personal segment, and within the Life and Personal Accident, which is composed by 12 branches, VGBL is the highlight; in Pension are included two types of plans, the PGBL and those traditional. The segment encompasses all the operations related to life insurance in general, annuity constitution and supplementary retirement. The last segment, capitalization, is the segment that seeks to provide a tool to assist the population in the effort to accumulate short and long term financial reserves in order to form savings, combined to the playful aspect of the drawings.

0118 – Comprehensive Business Coverage 0141 – Loss of Profits 0143 – Fidelity Bond 0167 – Engineering Risks 0171 – Miscellaneous Risks 0173 – Bankers Blanket Bond 0176 – Miscellaneous Risks – Combined Plans 0195 – Extension of Property Guarantee 0196 – Named and Operational Risks DPVAT Group 0588 – DPVAT Convention 1 (Categories 1, 2, 9 and 10) 0589 – DPVAT Convention 2 (Categories 3 and 4) Home/Housing Group 1066 – Home – SFH 1068 – Home – Outside SFH Cargo (Goods in Transit) Group 0621 – National Cargo 0622 – International Cargo

0627 – Liability – Interstate and International Land Transit Carrier 0632 – Liability – International Transit Carrier (Cargo) 0638 – Liability – Railways Transit Carrier (Cargo) 0652 – Liability – Air Transit Carrier (Cargo) 0654 – Liability – Land Transit Carrier (Cargo) 0655 – Liability – Cargo Diversion 0656 – Ship Owner’s Liability 0658 – Liability – Multimodal Transit Operator Financial Risks Group 0739 – Financial Guarantee 0740 – Private Obligations Guarantee 0745 – Public Obligations Guarantee 0746 – Rental Guarantee 0747 – Public Concessions Guarantee 0750 – Legal Guarantee 0775 – Guarantee Credit Group 0819 – Export Credit – Commercial Risk 0848 – Internal Credit 0849 – Export Credit 0859 – Export Credit – Political Risk 0860 – Domestic Credit – Commercial Risk 0870 – Domestic Credit – Personal Risk Liability Group 0310 – Directors and Officers Liability (D&O) 0351 – General Liability 0378 – Professional Liability Hull Group 0433 – Marine 0435 – Aviation 0437 – Hangarkeepers Liability 0457 – DPEM (Compulsory “no-fault” bodily injury insurance for boats’ owners) Rural Group 1101 – Agricultural Insurance without FESR Coverage 1102 – Agricultural Insurance with FESR Coverage 1103 – Farming Insurance without FESR Coverage 1104 – Livestock Insurance with FESR Coverage 1105 – Aquiculture Insurance without FESR Coverage 1106 – Aquiculture Insurance with FESR Coverage

1107 – Forest Insurance without FESR Coverage 1108 – Forest Insurance with FESR Coverage 1109 – Insurance in respect of the Rural Product Coverage 1130 – Farming Building and Products 1161 – Agricultural 1162 – Rural Property and Goods on Lien – Private Financial Institutions 1163 – Rural Property and Goods on Lien – Public Financial Institutions 1164 – Bloodstock and Livestock 1165 – Comprehensive Forest 1198 – Life Insurance of the Rural Producer Special Risks Group 0234 – Oil & Gas Risks 0272 – Nuclear Risks 0274 – Satellites Other Insurances Group 1279 – Insurances Abroad 1299 – Branch Offices Abroad

Personal Segment (Life+PA+Pension) Life Group 0977 – Credit Life Insurance 0980 – Educational Insurance 0990 – Random Events 0991 – Individual Life 0992 – Individual VGBL 0993 – Group Life 0994 – Collective VGBL 0997 – Group Life/Collective Personal Accident Personal Accident Group 0936 – PCHV (loss of flight license due to disability) 0969 – Tourism 0981 – Personal Accident – Individual 0982 – Personal Accident – Collective Pension Group PGBL – Traditional Plans

Health Segment Health Group Individual Health – Group Health

Data from the Market Operations In 2009, the Brazilian insurance market ended the year of 2009 with196 companies in operation. From this number, there are 115 insurance companies operating in the general insurance segment, 28 in the personal segment, 24 open private pension entities (EAPCs), 16 insurers with expertise in health and 13 capitalization companies. During the year, the market accounted a total of R$109.25 billion in premiums, contributions and capitalization bonds representing a 14.91% growth compared to R$ 95.07 billion accounted in the previous year. The most significant growth (19.35%) was recorded in the Personal, Life and Pension segment, which got global revenue of R$ 52.39 billion, against R$ 43.90 billion of the previous year. But this good performance, with up or down slight indexes fluctuations, also repeated in the other segments of the market: 10.13% in the general insurance; 12.75% in the supplementary health; 12.10% in the capitalization. The major highlights by branches in the year of 2009 are the very high growth of the VGBL in 28.07%, because of its relative weight in total income of the market, besides the motor insurance with a 12.98% growth, and also the meaningful individual growth well above the average of following branches: financial risk (32.15%), rural insurance (30.02%) and home/ housing insurance (26.36%). DPVAT Insurance, with total premiums exceeding R$ 2.68 billion, accounted good performance with a 16.44% growth in the year of 2009.

Income Between 2004 and 2009 the production of the market recorded accumulated growth of

82.98%, as a result of the global growth of the personal segment (104.06%), for which VGBL competed significantly (185.18% growth in the period), whose production jumped from R$ 10.56 billion in 2004 to R$ 30.13 billion in 2009, keeping a steady trajectory of growth in the period. Even on personal segment, deserves to be highlighted the personal accident insurance, that accumulated a growth of 133.24% from 2004 to 2009, but the income went from R$ 1.09 billion to R$ 2.54 billion. At this same period, the general insurance segment registered a 66.24% accumulated growth, when going from a production of R$ 19.81 billion in 2004 to R$ 32.94 billion in 2009, highlighting the accented growth of 268.89% in the branch of financial risks, with production of R$ 235 million gone to R$869 million and also the rural insurance, that accumulated growth of 268.89%, with production going from R$ 278 million to R$ 1.028 billion last year. Even on general insurance segment, by the total volume of business, the motor branch keeps leading the production since 2004, registering a premiums income of R$ 7.39 billion in 2009, against R$ 10.53 billion in 2004, with growth of 65.19% in the period, followed by the property branch that went from a production of R$ 3.56 billion to R$ 6.50 billion in 2009, with a 82.45% accumulated growth in the period. The health segment jumped from a production of R$ 7.61 billion to R$ 13.80 billion, representing an accumulated growth of 81.45% between 2004 and 2009. The production of the capitalization segment went from R$ 6.60 billion in 2004 to over R$10 billion in 2009, which represented a 53.05% accumulated growth in this period.

Premiums and Contributions Income - 2004 - 2008 - 2009 Segments / Groups Motor Hull Credit DPVAT * Home/Housing Property

Values in R$ thousand

%Variation 2009/2004

%Variation 2009/2008

2004

2008

2009

10.530.406.912

15.396.269.655

17.394.942.260

65.19%

12.98%

465.535.496

502.558.297

553.143.439

18.82%

10.07%

387.458.632

502.776.657

426.764.842

10.14%

-15.12%

1.590.932.088

2.305.016.554 *

2.683.868.577

68.70%

16.44%

758.536.343

717.666.802

906.815.631

19.55%

26.36%

3.562.963.699

6.357.310.975

6.500.774.329

82.45%

2.26%

Liabilities

403.742.513

611.414.136

658.404.484

63.08%

7.69%

Special Risks

161.541.153

208.527.399

236.782.709

46.58%

13.55%

Financial Risks

235.643.875

657.764.523

869.260.693

268.89%

32.15%

Rural

278.802.814

791.022.573

1.028.471.608

268.89%

30.02%

1.441.227.694

1.863.150.813

1.685.169.380

16.93%

-9.55%

Cargo (Goods in Transit) Other

982.183

19.817.773.402

29.913.478.383

32.944.397.952

66.24%

10.13%

Individual Life/ Group/ CPA/ Others

6.012.946.067

9.878.142.727

11.159.185.745

85.59%

12.97%

Personal Accident

1.092.612.126

2.200.753.030

2.548.432.878

133.24%

15.80%

VGBL

10.566.277.611

23.527.886.505

30.132.802.441

185.18%

28.07%

PGBL

4.450.596.662

5.059.209.779

5.201.848.375

16.88%

2.82%

Traditional Plans

3.553.324.784

3.234.729.003

3.352.286.148

-5.66%

3.63%

25.675.757.250

43.900.721.045

52.394.555.587

104.06%

19.35%

Health

7.610.909.336

12.248.011.606

13.809.638.775

81.45%

12.75%

Health Segment

7.610.909.336

12.248.011.606

13.809.638.775

81.45%

12.75%

Capitalization Segment

6.601.776.193

9.013.898.082

10.104.142.922

53.05%

12.10%

59.706.216.181

95.076.109.116

109.252.735.236

82.98%

14.91%

General Insurance Segment

Personal Segment

Insurance Market / Private Pension/ Capitalization and Supplementary Health Source: SUSEP, ANS and BCB-DEPEC

* DPVAT: From the year of 2009, there was a change in the accounting criteria, and the premiums have been reporting net of transfer to the SUS and DENATRAN

(50% of the premiums). Thus, for purposes of comparison, it was made this adjustment in the 2008 numbers. This same adjustment however was not made in the 2004 numbers.

9.2% Income by Segment (% Share) 12.6%

30.2%

General Insurance Personal (Life + AP and Open Private Pension) Health Capitalization

48.0%

Income of the Insurance Market in Relation to GDP In 2009, with a global production of R$111.97 billion, the Brazilian insurance market confirmed on its sound trajectory of growth of participation in the composition of the national GDP, that reached the sum of R$ 3.143 trillion in the year, representing 3.56% against 3.25% in 2008.

Year

* Income

From 2004 to 2009, there was an accumulated growth of 15.58% of market share in relation to GDP, going from 3.08% to 3.56%.

* Income (in R$ million)

GDP (in R$ million)

Participation - % GDP

2004

59.706.216.181

59.706

1.941.498

3.08%

2005

65.631.650.089

65.632

2.147.239

3.06%

2006

73.694.804.145

73.695

2.369.484

3.11%

2007

84.334.269.738

84.334

2.661.344

3.17%

2008

97.556.884.797

97.557

3.004.881

3.25%

111.978.984.832**

111.979

3.143.015

3.56%

2009**

Source: SUSEP, ANS and IPEADATA

* Insurance Premiums, Retained Contributions, and Retained Income and Capitalization ** DPVAT: For purposes of comparison with the historical series of GDP, it was made an adjustment in the premiums of 2008, adding the values transferred to the SUS and DENATRAN (50% of the premiums).

3.56% 3.08%

3.06%

3.11%

3.17%

2004

2005

2006

2007

3.25%

2008

2009

Income in Relation to Inflation Between 2004 and 2009, the Brazilian Insurance market registered global growth of 83.0%, but the inflation in Brazil, measured by IGPM-FGV, accumulated growth of 22.20%. Regarding the year of 2009, there was a deflation of 1.72%, while the insurance market accumulated a growth of 14.91%.

From 2004 to 2009, the highlights to the good performance of the insurance market are due to the personal segments that increased 104.1%, and the general insurance, with accumulated growth of 66.2%, in the period, following the health segment, that registered accumulated growth of 81.4% in the period and the capitalization segment with 53.1%.

Income x Inflation Values in R$ thousand

Income Growth

2004

Insurance Market Accumulated Growth - %

59.706.216.181

General Insurance Segment Accumulated Growth - %

19.817.773.402

Cumulative Growth Personal Segment Accumulated Growth - %

25.675.757.250

95.076.109.116

109.252.735.236 83.0%

29.913.478.383 * 50.9%

7.610.909.336

Capitalization Segment Accumulated Growth - %

6.601.776.193

32.944.397.952 66.2%

43.900.721.045 71.0%

Health Segment Accumulated Growth - %

Annual Growth - %

2009

59.2%

IGPM â&#x20AC;&#x201C; Accumulated Index

2008 *

52.394.555.587 104.1%

12.248.011.606 60.9%

13.809.638.775 81.4%

9.013.898.082

10.104.142.922

36.5%

53.1%

100

124.34

122.20

12.42%

9.81%

-1.72%

24.34%

22.20%

Accumulated Growth - % Source: SUSEP, ANS and IGP-M/FGV (Suma EconĂ´mica)

* DPVAT: From the year of 2009, there was a change in the accounting criteria, and the premiums have been reporting net of transfer to the SUS and DENATRAN

(50% of the premiums). Thus, for purposes of comparison, it was made this adjustment in the 2008 numbers. This same adjustment however was not made in the 2004 numbers.

Claims, Benefits and Surrenders Measured in percentage, the loss ratio of the market in 2009 (60.9%) was below the rate reported in the previous year (61.43%), while, in values, with a sum of R$ 39.797 billion paid

in claims, benefits and surrenders, accounted a growth of 11.41% over the sum paid in 2008 (R$ 35.721 billion).

Claims, Benefits and Surrenders

Values in R$ thousand

2008

2009

%Variation 2009/2008

Earned Income (*)

Claims Benefits Surrenders

Loss Ratio

Earned Income (*)

Claims Benefits Surrenders

Loss Ratio

Earned Income (*)

Claims Benefits Surrenders

General Insurance

24.301.048

14.480.559

59.59%

27.250.630

16.405.318

60.20%

12.14%

13.29%

Personal Insurance

13.760.015

4.816.131

35.00%

15.894.079

4.918.495

30.95%

15.51%

2.13%

Life+PA

10.929.973

4.223.747

38.64%

12.838.915

4.556.304

35.49%

17.47%

7.87%

2.830.042

592.384

20.93%

3.055.164

362.191

11.86%

7.95%

-38.86%

11.119.080

9.007.356

81.01%

12.466.014

10.373.132

83.21%

12.11%

15.16%

Segments

Open Private Pension Health Capitalization

8.972.271

7.417.172

82.67%

9.737.078

8.100.281

83.19%

8.52%

9.21%

Total Market

58.152.414

35.721.218

61.43%

65.347.801

39.797.227

60.90%

12.37%

11.41%

* Earned Income = Earned Premium + Earned Income from Pension + Earned Income from Capitalization ** DPVAT: From the year of 2009, there was a change in the accounting criteria, and the premiums have been reporting net of transfer to the SUS and DENATRAN (50% of the premiums). Thus, for purposes of comparison, it was made this adjustment in the numbers of 2008.

14.9% Earned Income in 2009 19.1%

41.7%

General Insurance Personal ( Life+PA and Open Private Pension) Health

24.3%

Capitalization

Claims, Benefits, Surrenders and Drawings in 2009

20.3% 41.2%

General Insurance Personal ( Life+PA and Open Private Pension) Health

26.1%

Capitalization

12.4%

Technical Reserves Traditionally, the segments of insurance, open private pension and capitalization play a crucial role in the constitution and administration of long term domestic savings, important and needful element to the economic and social development of the Country. When administrating this increasing domestic savings, reflected in the balance of technical reserves, highlights another relevant role played by the sector: the prudent investment of these funds into assets that offer safety and liquidity, so as to be able to comply full and timely with the contractual commitments with customers. In 2009, the technical reserves of the Brazilian insurance market accumulated the amount of

R$ 237.1 billion, value above 25.36% compared to the value of R$ 189.2 billion in 2008. In the segment of insurance and pension, it may be highlighted the increase of the technical provisions in the amount of R$ 46.1 billion only in 2009, representing a growth of 26.93% over the balance of 2008. Just to illustrate, we mention some examples of technical provisions that the companies should constitute monthly, according to the market segment, from regulations enacted by SUSEP and ANS: â&#x20AC;˘ Unearned Premiums; Complementary Premiums; Insufficiency of Premium; Mathematic for Accrued Benefits; Losses Payable; Loss-

es Incurred But Not Reported (IBNR); Mathematic for Benefits Granted; • Mathematic for Benefits to be Regularized, Surrenders and/or Other Values to be Regularized, Events Incurred Events But Not Reported, Accrued Benefits, Benefits Granted, Administrative Expenses, Risks Fluctuation, Contributions Insufficiency, Unexpired Risks, Complementary Premiums, Technical Surplus, Financial Surplus, Financial Fluctuation; • Mathematic for Surrender; Administrative; Drawings to be Effected; Profit Commission

of Active Bonds; Contingencies; Bonds Surrender; Drawings Payable; Profit Commission of Inactive Bonds; • Other Such as the collaterals of the technical reserves as the equity of the companies have their investment regulated by the National Monetary Council (CMN Resolutions 3.308/2005, 3.358/2006 and 3.557/2008), upon prudential rules that consider the diversification and the risks involved. Values in R$ thousand

Segments Insurance and Pension Capitalization Health Total - Market

2008

% Variation 2009/2008

2009

171.331.362

217.477.058

26.93%

13.445.478

14.937.575

11.10%

4.417.698

4.767.122

7.91%

189.194.538

237.181.755

25.36% Source: SUSEP and ANS

The Collateral Investments We mention as example, that: • In the fixed-income segment, the funds should be invested individually or cumulatively, up to 100% in government bonds and investments funds whose portfolios are represented exclusively by such bonds. • Up to 80% of the funds may be invested in private bond as Bank Deposit Certificate (CDB) and Bank Deposit Receipt (RDB); • Up to 10% in investment funds classified as external debt funds, constituted as open condominium; • In the variable income segment, the investment of funds are limited from 3% to 49% of all the investments, individually or cumulatively, depending on the nature and characteristics of the shares issued by companies, subscription bonus, subscription receipts and deposits certificates from first-line companies and investment funds quotas in shares of the mentioned companies; • In the real estate segment the funds should be invested in urban real estate up to 8%. Despite of the international financial crisis, which began on the second semester of 2008 and continued in 2009, there were not major turbulences in the companies that compose the Bra-

zilian insurance market, due to these technical reserves and equity are invested, mostly, in government bonds, as showed in the chart below: Investments of Technical Provisions from the Insurance Companies – 2009

28.2%

0.1% 1.4%

70.3%

Source: SUSEP

Fixed-Income Government Bonds Real Estate Variable Income

Equity In 2009, the consolidated equity of the market presented a growth of 32.59%, expanding in R$ 16.9 billion. Within this context, it can be positively highlighted the insurance and pension seg-

ment, that presented an equity growth of almost R$ 13.6 billion, representing a 32.42% growth. Regarding capitalization, its equity also grew significantly, 48.32% against the year of 2008. Values in R$ thousand

2008

2009

%Variation 2009/2008

41.826.847

55.388.318

32.42%

Capitalization

3.835.985

5.689.539

48.32%

Health

6.294.550

7.810.137

24.08%

51.957.382

68.887.994

32.59%

Segments Insurance and Pension

Total - Market

Source: SUSEP and ANS

Total of Investments In 2009, the total of investments in the insurance market reached R$ 306.1 billion, a sum equivalent to 9.7% of GDP. This representativeness highlights the relevance of the insurance market for the economy, as

well as its 26.92% growth, against the year of 2008, reveals its great potential to promote the economical and social development of the Country.

Values in R$ million

Accounts

2004

Variation 2009/2004

Variation 2009/2008

2008

2009

115.389

241.152

306.070

165.25%

26.92%

Technical Provisions

86.744

189.195

237.182

173.43%

25.36%

Equity

28.645

51.957

68.888

140.49%

32.59%

1.941.498

3.004.881

3.143.015

61.89%

4.60%

5.94%

8.03%

9.74%

3.79 pp

1.71 pp

Investments

Nominal GDP GDP Participation

Source: SUSEP, ANS and IPEADATA

Insurance Market Investments (Technical Provisions + Equity) x GDP 9.74%

10.00% 8.03% 8.00%

5.94%

6.00% 4.00% 2.00% 0.00%

2004

2008

2009

Market Mix Major Numbers of Insurance, Pension and Capitalization - 2009 Companies

Equity

Reserves

Investments

Insurance Premium Written

Values in R$ thousand

Growth

Losses

Revenues from Pension or Capitalization

Net Earnings

% over Equity

21.273

11%

3.216

11%

INSURANCE COMPANIES Ace Seguradora S/A

191.253

343.322

334.420

617.744

228.695

Alfa Previdência e Vida S/A

29.731

260.451

284.757

44.187

40%

7.607

Alfa Seguradora S/A

71.580

167.625

179.872

218.473

111.501

4.091

Allianz Seguros S/A

537.936

1.812.792

1.142.068

1.889.275

23%

799.528

80.002

15%

Alvorada Vida S/A

119.760

American Life Companhia de Seguros

9.382

115.160

6.971

2.800

12% 14%

23.867

24.989

38.349

78.277

16%

36.183

5.110

-66%

7.237

109.512

202.001

166.865

229.709

28%

9.357

14.991

48.416

44.730

88.731

166.104

-90%

246.676

11.397

24%

214.627

519.234

485.162

757.639

26%

472.509

52.692

25%

Banestes Seguros S/A

68.586

65.849

115.782

102.884

64.294

13.262

19%

Bcs Seguros S/A

37.477

7.555

42.435

22.994

27%

20.119

1.979

Berkley International do Brasil Seguros S/A

22.686

64.289

46.459

42.741

-23%

1.603

606

Aps Seguradora S/A Assurant Seguradora S/A Atlântica Companhia de Seguros Azul Companhia de Seguros Gerais

Bradesco Auto/Re Companhia de Seguros

1.268.985

3.158.955

2.381.355

3.112.193

124%

1.875.949

147.677

12%

10.368.382

95.250

887.274

687

-26%

6.864

2.478.470

24%

2.950.962

65.692.143

68.616.543

12.781.671

18%

1.089.726

2.182.599

1.408.886

48%

Brasilprev Seguros e Previdência S/A

359.524

26.527.718

26.954.324

4.207.547

85%

28.419

1.947.887

257.921

72%

Brasilveículos Companhia de Seguros

332.870

960.956

692.327

1.326.914

27%

743.264

53.456

16%

4.197

6.782

10.444

20.422

-41%

16.923

366

Bradesco Seguros S/A Bradesco Vida e Previdência S/A

Bva Seguros S/A Caixa Seguradora S/A

2.228.194

1.725.047

3.386.795

1.537.276

23%

739.789

656.494

29%

Caixa Vida e Previdência S/A

330.098

10.535.252

10.900.778

2.646.581

19%

111

375.187

108.944

33%

Capemisa Seguradora de Vida e Previdencia S/A

671.237

748.601

761.238

6.490

380%

278

212.116

32.147

64.502

79.979

47.187

96.529

162%

3.022

-4.212

-7%

151.120

184.220

177.366

325.240

40%

48.502

7.565

9.176

10.852

26.763

23%

21.094

20.892

16.276

13.910

8.834

-5%

-257

Cardif do Brasil Seguros E Garantias S/A Cardif do Brasil Vida e Previdência S/A Centauro Vida e Previdência S/A Cesce Brasil Seguros de Crédito S/A Cesce Brasil Seguros de Garantias e Crédito S/A

8.540

1.564

21%

-793

-4% 12%

24.464

120.350

49.690

77.609

-22%

20.683

3.001

ChartIs Seguros Brasil S/A

127.929

173.911

187.757

146.447

368%

43.022

-9.490

-7%

Chubb do Brasil Cia De Seguros

306.685

424.046

488.924

697.378

290.268

37.467

12% 25%

Coface do Brasil Seguros de Crédito Interno S/A

31.142

70.325

69.567

57.638

10%

20.740

7.934

Companhia de Seguros Aliança da Bahia

184.318

191.020

166.740

71.226

11%

28.008

17.231

Companhia de Seguros Aliança do Brasil

519.891

1.574.169

1.480.105

2.243.918

26%

571.281

316.013

61%

Companhia de Seguros Gralha Azul

795.521

44.780

132.503

39.993

26%

36.818

35.896

Companhia de Seguros Minas-Brasil

128.620

290.790

263.502

312.454

206.487

-21.851

-17%

Companhia de Seguros Previdencia do Sul

43.106

46.541

41.556

125.581

-3%

64.731

184

Companhia Excelsior de Seguros

31.933

125.368

74.015

111.614

20%

63.143

9.044

28%

Companhia Mutual de Seguros

34.301

32.521

38.260

115.388

69%

42.909

1.122

Conapp Cia Nacional de Seguros

72.699

18.558

78.922

38.286

-16%

25.319

8.881

12%

Confiança Cia de Seguros

67.593

139.418

77.980

226.130

20%

107.391

1.027

Cosesp - Cia de Seguros do Estado de São Paulo

208.158

179.013

358.297

5.183

-80%

13.726

7.202

Credito y Caucion Seguradora de Credito à Exportação S/A

20.622

2.748

20.481

148

-87%

-329

-681

-3%

Credito y Caucion Seguradora de Credito e Garantias S/A

17.270

11.661

19.791

7.873

355%

309

-577

-3%

Dayprev Vida e Previdência S/A

18.282

5.698

23.416

21.545

-6%

19.983

1.383

Source: SISCORP

Market Mix Major Numbers of Insurance, Pension and Capitalization - 2009 Companies

Equity

Reserves

Investments

Insurance Premium Written

Values in R$ thousand

Growth

Losses

Revenues from Pension or Capitalization

Net Earnings

% over Equity

-36

-1%

INSURANCE COMPANIES Ecc do Brasil Cia de Seguros

4.120

3.941

Euler Hermes Seguros de Crédito à Exportação S/A

18.835

7.702

19.475

5.665

-5%

406

851

Euler Hermes Seguros de Crédito S/A

17.482

31.094

22.291

16.781

2.214

119

Fator Seguradora S/A

49.023

33.386

34.968

46.741

128%

18.464

585

Federal de Seguros S/A

30.714

38.353

37.105

62.120

29.391

-2.060

-7%

4.590

6.756

7.051

20.287

26%

17.751

1.031

22%

Generali do Brasil Cia Nacional de Seguros

64.483

283.101

124.780

306.164

135.838

-10.349

-16%

Gente Seguradora S/A

10.197

20.066

19.076

26.262

28%

20.851

408

478.726

976.526

803.906

1.224.780

19%

747.387

48.981

10%

1.462.050

313.005

840.815

571.652

196.801

260.525

18%

Hsbc Vida e Previdência (Brasil) S/A

428.035

6.535.345

6.900.861

1.421.166

50%

3.764

389.076

4.317

Icatu Hartford Seguros S/A

648.753

3.163.133

3.399.736

633.865

12%

184.945

174.618

105.971

16%

10.367

14.067

22.077

20.832

27%

19.762

934

284.331

251.873

218.841

325.342

-7%

208.726

16.865

77.176

90.188

1.606

-10%

143

Itaú Seguros S/A

7.800.867

5.099.285

2.946.692

4.380.971

114%

1.750.120

Itaú Vida e Previdência S/A

Federal Vida e Previdência S/A

Hdi Seguros S/A Hsbc Seguros (Brasil) S/A

Ih Cia ee Seguros e Previdência Indiana Seguros S/A Investprev Seguros e Previdência S/A

14.133

1.787

11%

593.078

5.301.112

43.434.950

44.082.110

7.549.110

10%

233.757

509.769

10%

Itaú Xl Seguros Corporativos S/A

246.529

747.238

394.212

621.934

136.901

43.783

18%

J. Malucelli Seguradora S/A

112.058

298.989

202.560

251.381

27.281

29.249

26%

19.043

2.985

21.879

21.333

18.666

1.476

4.904

7.164

11.510

20.291

12%

17.763

634

13%

J. Malucelli Vida e Previdência S/A Java Nordeste Seguros S/A Kyoei do Brasil Companhia de Seguros Liberty Seguros S/A Luizaseg Seguros Mapfre Nossa Caixa Vida e Previdência S/A Mapfre Seguradora de Crédito Exportação S/A Mapfre Seguradora de Garantias e Crédito S/A Mapfre Vera Cruz Seguradora S/A Mapfre Vera Cruz Vida e Previdência S/A

1.443.323

4.199

17.417

5.123

20.045

882

-55%

1.963

-499

-3%

306.383

789.598

576.283

1.147.156

25%

689.484

12.738

78.938

162.063

126.359

124.088

28%

5.946

100.954

825.483

953.614

511.950

23%

95.135

17.554

6.636

15.864

1.198

-62%

100

41.335

10.277

13%

114.565

113%

1.425

35.820

50.553

30.067

41.815

-8%

19.219

1.067.758

1.860.857

1.126.579

2.518.884

24%

1.192.177

58.784

477.530

1.414.005

1.541.243

986.753

11%

341.829

41.684

9% 30%

59.040

Mares-Mapfre Riscos Especiais Seguradora S/A

105.091

66.149

86.657

194.244

11%

76.782

31.471

Marítima Seguros S/A

343.708

538.023

532.278

760.024

-3%

404.153

5.066

Mbm Seguradora S/A

10.898

11.154

9.740

35.560

19%

22.263

1.217

11%

280.378

1.419.064

1.628.940

938.992

36%

229.906

46.875

-327.002

-117%

18.511

183.884

203.161

-35.004

-136%

18.716

-2.296

2.334

13%

162.694

314.303

223.345

290.714

42%

153.082

-24.661

-15%

70.397

182.585

183.009

107.993

43.721

1.224

Metropolitan Life Seguros e Previdência S/A Minas Brasil Seguradora Vida e Previdência S/A Mitsui Sumitomo Seguros S/A Mongeral S/A Seguros e Previdência

211.587

Nobre Seguradora do Brasil S/A

44.028

254.910

75.617

304.610

32%

82.795

3.992

Panamericana de Seguros S/A

122.194

103.842

180.873

109.324

-19%

38.216

25.861

21%

Parana Cia de Seguros

2.482.132

93.350

198.866

91.352

37%

80.876

146.262

Porto Seguro Cia de Seguros Gerais

1.341.769

2.206.043

1.869.324

3.740.782

1.793.660

226.310

17%

Porto Seguro Vida e Previdência S/A

146.435

1.317.006

1.445.543

131.980

32%

23.273

17.374

22.394

30.406

21.669

24%

18.094

Pq Seguros S/A

125.090

13.750

823

Source: SISCORP

Market Mix Major Numbers of Insurance, Pension and Capitalization - 2009 Companies

Equity

Reserves

Investments

Insurance Premium Written

Values in R$ thousand

Growth

Losses

Revenues from Pension or Capitalization

Net Earnings

% over Equity

INSURANCE COMPANIES Previmax Previdência Privada e Seguradora S/A

12.844

6.993

19.879

21.033

26%

18.403

1.176

128.590

408.893

426.759

184.328

22%

13.542

4.002

50.607

24.274

13.856

63.152

53%

7.256

1.973

1.055.002

-23%

42.225

136.282

276.583

221.517

331.771

110.122

6.652

Rural Seguradora S/A

27.680

11.263

32.752

6.000

-8%

5.022

1.937

Sabemi Seguradora S/A

33.928

17.301

18.402

43.994

95%

21.885

5.020

15%

Safra Seguros Gerais S/A

60.577

33.954

87.928

41.562

58%

20.552

3.106

255.857

1.272.707

1.562.100

300.945

36.709

9.735

5.692

12.477

24.954

-11%

11.350

Prudential do Br Seguros de Vida S/A Qbe Brasil Seguros S/A Real Tokio Marine Vida e Previdência S/A Royal & Sunalliance Seguros (Brasil) S/A

Safra Vida e Previdência S/A Santa Catarina Seguros e Previdência S/A Santander Brasil Seguros S/A Santander Seguros S/A Seguradora Brasileira de Crédito à Exportação S/A

148.163

82.770

184.151

142.739

-5%

23.786

2.360.554

15.842.882

16.864.279

3.796.357

93%

318.713

19.541

32.076

20.313

16.351

-9%

3.534

3.125 25.391

412.270

19.968

905

14.859

10%

263.700

11%

1.803

Seguradora Líder dos Consórcios do Seguro DPVAT S/A

17.912

5.804

84.328

21.517

-99%

16.769

1.465

Sinaf Previdencial Cia de Seguros

14.353

20.860

32.763

54.433

28%

26.980

1.392

10%

1.814.899

2.084.046

1.190.495

2.259.781

12%

1.096.116

241.904

13%

Sul América Cia Nacional de Seguros Sul América Companhia de Seguros Gerais

20.924

39.434

37.787

22.046

-42%

19.188

Sul América Seguros de VidA e Previdência S/A

266.830

2.661.670

2.740.725

489.993

200.519

Tokio Marine Brasil Seguradora S/A

138.194

513.917

302.238

579.729

4% 8%

Tokio Marine Seguradora S/A

674.392

863.306

1.048.197

1.135.019

Uaseg Seguros S/A

976.313

1.323.763

1.751.992

430.099

Ubf Garantias & Seguros S/A Ubf Seguros S/A

Usebens Seguros S/A Vanguarda Companhia de Seguros Gerais

3% 32%

309.233

2.273

690.217

234.020

35%

268.282

30.797

9.323

34%

37.019

17%

506

101.627

25%

16.027

53.071

3.358

27.815

320.267

87.664

336.974

-91%

92.266

212.649

405.486

528.192

229.861

14%

106.204

20.606

4.771

22.614

3.911

259%

331

Unibanco Aig Seguros S/A Unimed Seguradora S/A

593 84.291

202.107

755

5.793

5.542

10.922

20.439

26%

17.869

642

11%

Vida Seguradora S/A

51.275

38.882

79.959

70.016

-9%

36.544

6.313

12%

Virginia Surety Companhia de Seguros do Brasil

60.391

271.383

145.893

182.817

23%

17.880

231

Votorantim Seguros e Previdência S/A

890

Yasuda Seguros S/A

536.717

227.897

284.955

246.551

15%

119.686

11.686

Zurich Brasil Seguros S/A

106.679

325.808

164.897

427.588

86%

55.249

9.790

55.336.170

217.001.550

220.710.887

76.817.606

13%

20.961.622

8.715.661

16%

SUM OF INSURANCE COMPANIES

18.530

19.007

7.873.664

Source: SISCORP

Market Mix Major Numbers of Insurance, Pension and Capitalization - 2009 Companies

Equity

Reserves

Investments

Insurance Premium Written

Values in R$ thousand

Growth

Losses

Revenues from Pension or Capitalization

Net Earnings

% over Equity

PRIVATE PENSION ENTITIES Acvat- Previdência Privada

4.202

339

656

1.026

-37

-1%

Aplub - Previdência Privada

67.015

279.416

164.547

130.040

13.492

20%

7.056

1.073

4.536

1.455

21%

Arc Previdência Privada Arcesp Previdência Privada

1.585

-41

-3%

24.518

823

4.288

3.145

3.954

16%

Auxiliadora Previdência

4.143

1.159

1.987

-750

-18%

Bamércio S/A Previdência Privada

8.470

167

8.631

984

362

Bmc Previdência Privada S/A

8.949

8.218

400

310

Bp Previdência Privada S/A

8.046

101

1.488

14%

Aspecir Previdência

Equatorial Previdência Complementar Familia Bandeirante Previdência Privada Gboex - Gremio Beneficente Luterprev- Entidade Luterana de Previdência Matone Previdência Privada S/A Mbm Previdência Privada Newprev Previdência Privada S/A

10.969

7.780 464

1.302

1.945

22.250

968

22.170

7.311

3.705

17%

100.981

59.877

59.106

131.669

-22.854

-23%

455

51.600

50.576

5.428

18%

423

35.679

38.528

18.310

4.860

16%

-105

81%

8.226 31.027

8.278

-129

Peculio Abraham Lincoln - Amal

27.892

11.008

11.409

32.405

-10.377

-37%

Pecúlio União Previdência Privada

1.109

378

874

79%

Previcorp Previdência Privada

1.053

205

589

286

-17

-2% 13%

Previmil Previdência Privada Recíproca Assistência

8.657

5.456

6.706

4.881

1.120

15.958

7.859

17.146

5.511

1.159

712

35% 7%

RS Previdência

2.010

5.088

Sabemi Previdência Privada

6.895

1.861

12.644 2.050

4.373

2.297

481

1.316

7.763

2.835

1.419

11%

540

2.466

810

-406

-20%

57.891

11.719

57.405

8.527

9.412

16%

Uniprev União Previdenciária

2.235

3.667

6.655

2.890

-4.179

-187%

Upofa União Previdencial

8.362

258

1.598

624

-447

-5%

454.520

475.508

502.244

361.499

6.198

Sociedade Caxiense de Mútuo Socorro Sucv União de Previdência União Previdenciária Cometa do Brasil

SUM OF THE PRIVATE PENSION ENTITIES

Source: SISCORP

Market Mix Major Numbers of Insurance, Pension and Capitalization - 2009 Companies

Equity

Reserves

Investments

Insurance Premium Written

Values in R$ thousand

Growth

Losses

Revenues from Pension or Capitalization

Net Earnings

% over Equity

3.196

18%

CAPITALIZATION ENTITIES Aplub Capitalização S/A

17.631

10.733

10.738

Atlântica Capitalização S/A

65.213

66.014

Bradesco Capitalização S/A

626.486

3.023.628

3.601.332

1.991.358

Brasilcap Capitalização S/A

142.512

3.620.161

3.807.120

Caixa Capitalização S/A

313.136

1.888.300

2.276.105

3.112.429

2.277.466

3.282.786

23.547

206

9.444

Hsbc Empresa de Capitalização (Brasil) S/A

276.060

750.630

1.119.314

Icatu Hartford Capitalização S/A

244.128

1.318.089

Liderança Capitalização S/A

399.955 16.027

Companhia Itaú de Capitalização Horizonte Capitalização S/A Hsbc Capitalização (Brasil) S/A

Mapfre Capitalização S.A. Nossa Caixa Capitalização S/A

196.572

3.870

270.532

43%

2.257.058

85.076

60%

926.031

114.965

37%

1.716.915

174.908

-6

-2%

286

386.555

72.444

26%

1.439.306

808.042

58.651

24%

378.927

451.555

284.744

37.235

7.715

21.242

16.646

3.013

19%

185

5.476

5.604

Santander Capitalização S/A

419.698

1.384.327

1.723.724

663.029

138.222

33%

Sul América Capitalização S/A - Sulacap

212.608

277.362

321.921

559.381

68.251

32%

5.875.192

14.937.575

18.136.203

9.806.330

1.030.551

18%

61.665.883

232.414.634

239.349.333

18.041.493

9.752.409

16%

SUM OF THE CAPITALIZATION ENTITIES TOTAL SUM

76.817.606

13%

20.961.622

Source: SISCORP

Chapter III

CNSeg and the Institutional Representation of the Market

National Confederation of the General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg) With registered office in the City of Rio de Janeiro, the National Confederation of the General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg) was formed on August 20th, 2008, by vote of the 4 Federations: FenSeg, FenaPrevi, FenaSaĂşde and FenaCap.

CNSeg was established to act as the utmost entity of representation of the Brazilian insurance market, comprised by the segments of General Insurance, Private Pension and Life, Supplementary Health and Capitalization.

Institutional Representation of the Insurance Market

In the fulfillment of the institutional mission, CNSeg is liable for congregating the major leaderships of the sector, coordinating their supra business political actions, representing the market at the national and international entities, preparing the strategic planning of collective action, and developing federatively common activities. And, considered the operation specificity of the various segments represented in a confederative way, CNSeg counts on four Federations aligned to its performance: National Federation of Capitalization (FenaCap), National Federation of Private Pension and Life (FenaPrevi), National Federation of General Insurance (FenSeg) and National Federation of Supplementary Health (FenaSaúde). On October 21st, 2009 it was held the General Meeting of CNSeg and Fenaseg having as agenda the Reform of the Bylaws and the anticipation for the term end of the current Board of Directors, from October 20th to April 30th, 2010. At this date there will be however elections for the Board of Directors of Fenaseg and CNSeg, for the 2010/2013

triennium. The license numbers of the both Board of Directors will be composed by the same members, as the model “reflector”. About the reform of the Bylaws, the main changes were: • Each three months the meeting of the Board of Directors will count on the attendance of Presidents of the State Trade Unions; • The President of the Board of the Seguradora Líder will attend the meetings of Board of Directors, as non-voting (same condition of Funenseg that attends the meetings currently as non-voting, and thus is remained); • At the General Meetings, including in the Election Meeting of the Board of Directors of CNSeg, in case of draw, the President will have deciding vote; • To transfer to the Board of Directors the several authorities of the General Meeting, in compliance with the legal requirements; • A same economic group may chair two Federations.

Superior Board of Director of Fenaseg/CNSeg President João Elisio Ferraz de Campos

Centauro Vida e Previdência S/A

Permanent Members Acacio Rosa de Queiroz Filho

Chubb do Brasil Cia. de Seguros

Antonio Cássio dos Santos

Mapfre Vera Cruz Seguradora S/A

Carlos dos Santos

Alfa Seguradora S/A

Federico Baroglio

Generali Brasil Seguros S/A

Francisco Caiuby Vidigal

Marítima Seguros S/A

Geraldo Rocha Mello

Medial Saúde S/A **

Jayme Brasil Garfinkel

Porto Seguro Cia. de Seguros Gerais

Jorge Estácio da Silva

Prudential do Brasil Seguros de Vida S/A

José Castro Araújo Rudge

Itaú Seguros, Vida e Previdência S/A

José Roberto Marmo Loureiro

Metropolitan Life Seguros e Previdência Privada S/A

Luis Emilio Maurette

Liberty Seguros S/A

Mário José Gonzaga Petrelli

Icatu Hartford Seguros S/A

Nilton Molina

Mongeral Aegon Seguros e Previdência S/A

Osvaldo do Nascimento

Itaú Vida e Previdência S/A

Patrick Antônio Claude de Larragoiti Lucas

Sul América Companhia Nacional de Seguros

Pedro Pereira de Freitas

American Life Companhia de Seguros

Pedro Purm Junior

Zurich Brasil Seguros S/A

Ricardo José da Costa Flores

Brasilcap Capitalização S/A

Thierry Marc Claude Claudon

Caixa Seguradora S/A

Superior Board of Directors – Remarkable People Alberto Oswaldo Continentino de Araújo Eduardo Baptista Vianna Jorge Hilário Gouvêa Vieira José Américo Peón de Sá Manuel Sebastião Soares Póvoas* Representative of the State Trade Unions João Gilberto Possiede

Sindicato das Empresas de Seguros Privados, de Resseguros, de Previdência Complementar e de Capitalização nos Estados do Paraná e do Mato Grosso do Sul

Miguel Junqueira Pereira

Sindicato das Empresas de Seguros Privados, de Capitalização, de Resseguros e de Previdência Complementar no Estado do Rio Grande do Sul

Audit Committee – Permanent Members Haydewaldo Roberto Chamberlain da Costa

Bradesco Seguros S/A

Laênio Pereira dos Santos

Sul América Companhia Nacional de Seguros

Lúcio Antonio Marques

Companhia de Seguros Previdência do Sul

Audit Committee - Deputies José Romano Furné

Brasilcap Capitalização S/A

José Maria Souza Teixeira Costa

Companhia de Seguros Aliança da Bahia

Luiz Sadao Shibutani

Allianz Seguros S/A

* Up to November 11th, 2009

Board of Director of Fenaseg/CNSeg President João Elisio Ferraz de Campos

Centauro Vida e Previdência S/A

1st Vice-President Patrick Antônio Claude de Larragoiti Lucas

Sul América Companhia Nacional de Seguros

Vice-President – Permanent Members Antonio Cássio dos Santos

Mapfre Vera Cruz Seguradora S/A

Jayme Brasil Garfinkel

Porto Seguro Cia. de Seguros Gerais

Geraldo Rocha Mello

Medial Saúde S/A *

Ricardo José da Costa Flores

Brasilcap Capitalização S/A

Vice-Presidents Nilton Molina

Mongeral Aegon Seguros e Previdência S/A

Osvaldo do Nascimento

Itaú Vida e Previdência S/A

Direction Antonio Eduardo M. de Figueiredo Trindade

Unibanco AIG Vida e Previdência *

Federico Baroglio

Generali Brasil Seguros S/A

João Franscisco Borges da Costa

HDI Seguros S/A

Mário José Gonzaga Petrelli

Icatu Hartford Seguros S/A

Múcio Novaes de Albuquerque Cavalcanti

Companhia Excelsior de Seguros

Paulo Miguel Marraccini

Allianz Seguros S/A

Pedro Pereira de Freitas

American Life Companhia de Seguros

Samuel Monteiro dos Santos Júnior

Bradesco Seguros S/A **

Renato Campos Martins Filho

Funenseg - Escola Nacional de Seguros **

* **

Up to September 3rd, 2009 Guests

Audit Committee Permanent Members Haydewaldo Roberto Chamberlain da Costa

Bradesco Seguros S/A

Laênio Pereira dos Santos

Sul América Companhia Nacional de Seguros

Lúcio Antonio Marques

Companhia de Seguros Previdência do Sul

Deputy Members José Fernando Romano Furné

Brasilcap Capitalização S/A

José Maria Souza Teixeira Costa

Companhia de Seguros Aliança da Bahia

Luiz Sadao Shibutani

Allianz Seguros S/A

Insurance Companies, Capitalization Companies and Open Private Pension Entities The operation of the insurance market is through insurers formed as incorporated companies, with nominative shares (Laws no. 6.404/1976 and no. 10.303/2001). The insurance companies are authorized to operate in General Insurance (NonLife), in Life Insurance, or in both. The insurance companies authorized to operate solely in Life Insurance may also to commercialize pension plans, as set forth the Complementary Law no. 1089/2001. To operate Health Insurance, the insurance companies should be specialized, as set forth the Law no. 9.656/98. The authorization to operate is granted by the Minister of Finance, after the analysis of the Superintendence of Private Insurance (SUSEP), or by the National Agency of Supplementary Health (ANS), as regards the insurance companies specialized in health The companies are affiliated to the 4 Federations, according to their operations. Insurance Companies: 115 Insurance Companies specialized in Health Insurance: 13 Open Private Pension Entities: 28 Non-profit Open Private Pension Entities: 24 Capitalization Companies: 13

DPVAT Insurance DPVAT insurance (Bodily Injury Caused by Automotive Land-Road Vehicles or by its Cargo to Persons Transported or Not) was created in 1974 to protect victims of traffic accidents all over national territory. Since then, this social protection sustained a series of changes aiming at improving the service to population. The administration of this insurance is made by Seguradora Lider DPVAT, since January 1st, 2008. Seguradora Líder DPVAT is an insurance company with expertise in DPVAT Insurance and was created to hold the administration of Pools of several Insurance Companies acting in the

country interested to operate DPVAT insurance. The joint operation of all 65 Insurance Companies that currently compose the pool guarantees more strength to the operations, ensuring the service to victims and beneficiaries through the extensive network distributed around the national territory. The Insurance Companies that integrate the pool remain liable for the guarantee of the indemnities, also providing service to eventual doubts and complaints of the citizen. Seguradora Líder DPVAT however started to represent them at the administrative and legal sector of the insurance operations, resulting in more wholeness and responsibility in the actions centralization. In addition, it facilitates the access by the Superintendence of Private Insurance (SUSEP) in the supervision of Pools operations, through the records made by Seguradora Líder DPVAT. This new management model is aligned with the most modern mechanisms of corporate governance and administrative techniques used by the Insurance Market. In 2009, aiming at extending the population knowledge about DPVAT insurance, Seguradora Líder DPVAT started a national campaign of disclosure and clarification on this insurance. Movies and posters were diffused on TV, magazines, radio, internet, outdoors and exterior media of several Brazilian cities. In a simple and didactic way, the campaign provided guidance about the channels to be used to claim indemnities, seeking, thus, discourage the use of intermediaries. The campaign was based on research results made by Seguradora Lider DPVAT in several Brazilian cities and had the following slogan: DPVAT: The only insurance that protects all the Brazilians. Through the DPVAT Insurance Call Center, it was possible to have a perception on the effects of the publicity campaign: a growth of almost 200% in the volume of calls. Only in the last year, DPVAT Insurance the Call Center received calls that surpassed the barrier of 400 thousand, arising from all over the country. Another important step given by Seguradora Líder DPVAT, initiated in the year of 2009, was the implementation of the DPVAT Partner

program. That is a partnership with insurance brokers around the country, named by the Insurance Companies that integrate the pool. In addition to extend the Service Stations to the citizen, the purpose of the program is to inhibit the action of intermediaries in the process, besides to implement a policy to fight against fraud and to reduce the legal actions. With the DPVAT Partner program, the citizen may receive orientation, file indemnity request and follow the process progressing. This way, DPVAT Partner acts also as a social agent within its community, disseminating and presenting to people the insurance concept, what may serve to extend its image and, as a rule, to reinforce the possibility to become the DPVAT Partner of its entire community, including other insurance modalities. Thus, Seguradora Líder DPVAT seeks to accomplish the mission to serve all the population victim of traffic accidents with transparency, as

widely as possible, as can be proved by the number and values of indemnity payments in the year of 2009: more than 256 thousand indemnities paid to traffic victims or to their beneficiaries. From this total, 53,052 indemnities were by death, 118,021 by permanent disability and more than 85 thousand reimbursements of medical-hospital expenses proved. The sum of all the payments achieved R$ 1.8 billion. It is always good to remember another important social function of DPVAT insurance: to contribute with the maintenance of the public health and the national policy of traffic. From the total accounted by the DPVAT Insurance, according to the legislation in force, 45% are intended for the Health Single System (SUS), for costing the medical-hospital care of traffic accidents victims all over the Country and 5% for the National Department of Traffic (DENATRAN), to apply in programs addressed to prevent traffic accidents. In 2009 the value directed to both bodies was more than R$ 2.7 billion.

46%

DPVAT – 2009 Indemnities - Number

By Permanent Disability By Medical-Hospital Expenses By Death

21%

33%

Council of Ethics The Council of Ethics is bound to the Superior Board of Directors of CNSeg. On July 3rd, 2008 in Rio de Janeiro city, with the attendance of representatives of the companies that committed to the Code of Ethics, was held the meeting of the Council of Ethics of the insurance market, where it was elected the first Board of Directors, composed by: President, Jayme Brasil Garfinkel; Vice-President, José Américo Peón de Sá. For an initial two-

year term, jointly with the President and VicePresident, were elected the following members: Márcio Serôa de Araújo Coriolano, Mário Teixeira de Almeida Rossi and Marivaldo Medeiros. For one-year term, were elected the members: Antônio Eduardo M.F. Trindade, Carlos André Guerra Barreiros, José Fernando Romano Furnê, Maria Helena Darcy de Oliveira, Oswaldo Mário Pego de Amorim Azevedo and Therezinha de Jesus Corrêa.

At the same meeting, it was presented to voting and approved, the final wording of the Internal Regulation of the Council, with increases and amendments indicated by the members in attendance to the meeting. Regarding the composition of the Board of Directors, the operation beginning of the Council and approval of the Regulation wording, a letter was sent to the Superintendent of SUSEP with request for sending to CNSP.

International Meeting of Insurance Association (IMIA) Business Action - Executive Committee: João Elisio Ferraz de Campos

The Council of Ethics already analyzed some cases in 2009, demonstrating the need of the Council. Suggestions and updating request for the Guide of Good Practices of Vehicles and the Guide of Good Practices for Fraud Reduction and Prevention, respectively, were also sent to FenSeg and to Direction of Protection to Insurance of CNSeg. Also in 2009, the Council of Ethics suggested amendments in Code of Ethics of the Market, based on the needs identified and there was the reelection of the members whose term would end in 2009.

Brazilian Association of Financial and Capitals Market Entities (ANBIMA) Council of Regulation and Best Practices for the Investment Funds Industry: Paulo Marraccini Council of Certification: Oswaldo do Nascimento

Councils, Commissions, Chambers, Committees Fenaseg/CNSeg has institutional representation, by their higher chief or representatives in the following bodies: Council for Economic and Social Development (CDES) Member: João Elísio Ferraz de Campos. Re elected in August 26th, 2009. Advisor: Suzana Munhoz National Confederation of the Financial System (CONSIF) Permanent Director: João Elísio Ferraz de Campos Commissaries: Marco Antonio Rossi and Patrick Claude de Larragoiti Lucas Inter-American Federation of Insurance (FIDES) Associated Member: CNSeg International Insurance Society (IIS) Corporate Member: CNSeg International Association of Insurance Supervisors (IAIS) Observer Member: CNSeg

National Association of Credit, Financing and Investment Institutions (ACREFI) Member: João Elisio Ferraz de Campos Directive Plan of the Capital Market Representative: Nilton Molina

Group of Business Leaders (LIDE) João Elisio Ferraz de Campos e Patrick Larragoiti Lucas Brazilian Center of International Relationships (CEBRI) Trustee Council: João Elisio Ferraz de Campos Brazilian Center of Intermediation and Arbitration (CBMA) Members: João Elisio Ferraz de Campos e José Américo Péon de Sá Directors: Horácio Cata Preta e Salvador Cícero V. Pinto SUSEP - Accounting Special Commission Holder: Haydevaldo Roberto Chamberlain da Costa Deputies: Laênio Pereira dos Santos e Dênis dos Santos Morais SUSEP – Actuarial Technical Chamber Almir Ribeiro e Jair Lacerda SUSEP – Working Group on Circular 380/08 – Money Laundering 10 representatives of the insurance market Council of Appeals of the National System of Private Insurance (CRSNSP) Holder: Glória Faria Deputy: Salvador Cícero Brazilian Committee on MercoSeguros Representative: José Carlos de Almeida

Consultative Committee on Microinsurance Composition: SUSEP; CNSeg; Fenacor; Funenseg. Holders: Antonio Cássio dos Santos and Jayme Brasil Garfinkel. Deputies: Solange Beatriz Palheiro Mendes (FenaSaúde) and Hélio Oliveira Portocarrero de Castro (FenaCap). Deliberative Council of the Workers’ Support Fund (CODEFAT) Member: João Elisio Ferraz de Campos Deputy: Ricardo José Flores

Group of Technical Support of CODEFAT Holder: Nilton Molina Deputy: Suzana Munhoz Consortium for Insurance Market Regulation (CRMS) Executive Commission: Horácio Cata Preta Insurers and Bankers Club Vice-President: Horácio Cata Preta National School of Insurance (Funenseg) – Board of Directors Members: Miguel Junqueira e Mauro Batista

Executive Direction of CNSeg / Consultancies and Advisories Council of Representatives

Superior Board of Directors

Council of Ethics

President João Elisio Ferraz de Campos

Direction of Institutional Affairs and Reinsurance Maria Elena Bidino

Permanent Committee on Institutional Affairs (CEPAI)

Direction of Government Relations

Legal Consultancy Consultant Salvador C. V. Pinto Advisory Gloria Faria

Technical Consultancy

Audit Committee

CRMS

FUNENSEG

José Ismar Alves Torres

Antonio Mazurek Advisory Fabiano Campelo

Press Relations and Communications

Imobiliária Seguradoras Reunidas

Geraldo Bolda

Board of Directors of the Central of Services

Central of Services Dir. Horácio Cata Preta

Advisory for Special Projects Suzana Munhoz da Rocha

Council of Protection to the Insurance

Direction of Protection to the Insurance Sérgio Duque Estrada

Direction of Management and Finances

Luiz Mendonça Library

Events and Publications

Juscenira Oliveira

Leila Pontes

Ronaldo Youle

CRMS – Consortium for Insurance Market Regulation Consortium for Insurance Market Regulation (CRMS) was instituted by the Protocol signed in December 6th, 1974, subscribed by the Superintendence of Private Insurance (SUSEP) Brazilian Reinsurance Institute, currently IRB – Brasil Resseguros S/A and National Federation of Private Insurance and Capitalization Companies – Fenaseg. Since its constitution and until July 6th, 2000 CRMS was managed by IRB – Brasil Re. The Executive Commission (COMEC) is the managing body of CRMS and is composed by representatives of Fenaseg, IRB – Brasil Re and SUSEP.

While the Technical Committees are constituted for indefinite term and deal with a varied list of topics, the Working Groups are formed to make progress on specific and punctual themes, and may work in partnership with other entities and count on advisors; they may work for a long time or may terminate with the completion of the work. The Committees follow the rules of the new Internal Regulations approved on September 2009 Technical Committees and Working Groups bound to CNSeg: Actuarial Committee (CAT) Committee on Management and Finances (CAF) Committee on Arbitration (CARB) Committee on Legal Affairs (CAJ)

According to the CNSP Resolution no. 26, dated February 17th, 2000 and the Meeting Minute of the Executive Commission dated March 31st, 2000, Fenaseg was elected as the new manager of CRMS and the funds arising from FGGO, provided in the Article 5 of the said Resolution. Such funds are addressed to attend eventual expenses of the financing and maintenance of the Seguradora Minera, whose controlling interest belongs to CRMS.

Committee on Internal Controls (CCI)

The financial funds received were duly invested in the financial market, in several Banks, attenuating eventual risks.

Working Group on Money Laundering (with SUSEP)

The lawsuit (no.96.02.34742-2), in which Brasillider, former stockholder of the Seguradora Mineira, questions the transfer of controlling interest to CRMS, was denied by the 3rd Panel of the Regional Federal Appellate Court (TRF) – 2nd Region, and the plaintiff appealed a decision. The plaintiff appeals judgment at the Superior Court of Justice (STJ) and the Federal Supreme Court (STF).

Committee on Consumption Relation

Committee on Human Resources (CRH) Committee on Reinsurance (CRE) Committee on Processes and Information Technology (CPTI) Committee on Ombudsman Service (COUV) Committee on Microinsurance (with SUSEP) Working Group on Workers’ Compensation Insurance Working Group on Climate Changes

Working Group on Intermediation (with Fenacor) Working Group on Small and Medium Size Companies

Working Group on Article192 of the Federal Constitution Working Group on Code of Insurance (Bill 3555) Working Group on Education of the Microinsurance Consumer Committee of Executive Directors (CNSeg and Federations)

Technical Committees

Committee of Executive Directors

Technical Committees are provided for in the Bylaws of CNSeg and are in charge of study technical subject matters, upon analysis, discussion and proposition on subjects of general interest of the insurance market, on which they issue decisions, prepare working plans and suggest acting standards aiming at solving dilemmas and standardizing procedures, making regulatory or general recommendations.

The Committee of Executive Directors, created by recommendation of the Board of Directors of CNSeg (meeting held on May 13th), is composed by executives of the CNSeg and 4 Federations. The Committee has the purpose to discuss policies and joint actions and to share information, avoiding the dispersion and duplication of efforts. In 2009, were held 5 monthly meetings.

Direction of Institutional Affairs and Reinsurance (DIRER) Director: Maria Elena Bidino In 2009, amongst the different activities developed by DIRER, it should be highlighted the investigation activities and studies intended for the insurance market characteristics to the lowincome population, as much considering the demand as the offer: Microinsurance. In March, under motivation and orientation of World Bank, CNSeg competed to the third round of donations offered through Microinsurance Innovation Facility of the International Labor Organization (ILO), sending the project about “Changing Perception of the Insurance to Low-Income Population”. 150 projects competed. CNSeg Project on microinsurance consumer education was one of the three selected and will receive funds from OIT in the amount of US$ 350 thousand. The project received the name “Estou Seguro”, developed at Santa Marta Slum, in Botafogo, Rio de Janeiro. During the period from March 22nd to 27th , the holder of the Board of Directors, Maria Elena Bidino, integrated the microinsurance mission in South Africa, promoted by World Bank, and organized by the Center for Financial and Regulation Inclusion (CENFRI), which program included meetings and visits to: regulation bodies, insurance companies, several microinsurance delivery channels, low-income communities, insurers and administrators associations established in Pretoria, Johannesburg and Cape Town. The Brazilian commission was also integrated by: Aparício Bento Zanzini (MAPFRE), Pedro Bulcão (SINAF), Christine Zettel (SUSEP), Paulo Antonio Costa de Almeida Penido (SUSEP), Claudio Contador (Funenseg), José Luiz Valente da Motta (Funenseg). Rodolfo Wehrhahn and Ramanathan Coimbatore Subramanian, representatives of the World Bank and two representatives of the insurance supervisory agency from Mexico also integrated this delegation. On July 28th/29th, President of CNSeg, the holder of DIRER and the Advisor for Special Projects, Suzana Munhoz, attended the meeting with Executives from International Labor Or-

ganization (ILO/OIT) in Switzerland, for planning of the Project of Insurance Education for lowincome population. From August 17th to 20th, at CNSeg, representatives from ILO/OIT, Craig Churchill and his Advisor Sarah Bel, coordinated the works on education for microinsurance consumers with the representatives and donors from the USA and the countries that had their projects selected by ILO: Kenya, Colombia and Brazil, with the goal to harmonize the information according to the ILO’s management and control standards. CNSeg staff counted on the participation of the holder of DIRER, of Leonardo Laginestra and of Alexandre Neto and the advisory of the Institute of Studies of Work and Society (IETS). The expert Craig Churchill granted a press an interview and gave lecture about the challenges for development of the microinsurance, at the Funenseg Auditorium. The holder of DIRER, Maria Elena Bidino, represented CNSeg at the Consultative Committee on Microinsurance of SUSEP together with the Executive Director of SINAF, Pedro Bulcão and the President of MAPFRE and the Committee on Microinsurance of CNSeg, Antonio Cássio dos Santos, to report the experience of the mission in South Africa, and to propose contracting CENFRI, through Funenseg, in order to evaluate the Microinsuance Brazilian market and to elaborate a report focused on the strategy of its regulation. After the proposal approved, from September 6th to 18th, representatives of CENFRI, Hennie Bester, Doubell Chamberlain and Chistine Hougaard accomplished the meetings agenda with 28 public and private institutions and realized qualitative research in Rio de Janeiro and São Paulo. In September 19th, CENFRI presented the preliminary result of the meetings held in seminar offered to the insurance market. On September 10th and 11th was performed the I Workshop on Microinsurance (CNSeg/ Funenseg/SUSEP), when, amongst other

subject matters, SUSEP presented the result of the work performed by the Consultative Committee. From December 2nd to 4th, were held meetings with the private sector, at CNSeg and with SUSEP, when the expert Hennie Bester presented the conclusions of the study made at the Microinsurance Brazilian market, subject of the report delivered in January 2010. On December 21st it was entered into the agreement with ILO, for the implementation of the Project “Estou Seguro”, with duration of 16 months. This project, coordinated by the holder of DIRER, aims at becoming aware and arising in the population of C and D classes the interest on insurance, as an efficient tool to avoid and to mitigate risks. Its implementation will be made in partnership with the IETS. The President of CNSeg sent the Circular to the Insurance Companies, inviting them to be partners of the project, which counts on the participation of Fenacor and Funenseg.

Committee on Consumption Relationships The consumer protection is an imperative of our time, and is in the agenda of the challenges of all industries, all over the world. CNSeg constitutes the Committee, coordinated by Maria Elena Bidino, to elaborate an action plan addressed to the consumer relation. This need was motivated by the work performed under coordination of the Technical Consultant, Ismar Torres, of the WG on Consumer Service (SAC), on the effects of the Decree 6523/208 and Ordinance 2014/2008. On October 13th, the holder of DIRER and Cláudia Wharton, Superintendent of Mapfre, participated of the meeting held at the Department of Consumer Defense and Protection (DPDC), about the regulation proposal of the Virtual SAC, presented by the Brazilian Institute of Customer Relation (IBRC). The Director of DPDC, Dr. Ricardo Morishita informed that DPDC does not identify the need to regulate the Virtual SAC, clarifying that the intervention of the State implies onus, and that the sectors should prefer self regulation as a way to improve their

customer relation, without the need the presence of the State. In December, the President of CNSeg, João Elísio Ferraz de Campos, accompanied by the holder of DIRER, Maria Elena Bidino, the Executive Director of the National School of Insurance, Renato Campos, and the President of ARBECOR-RE, Carlos Alberto Protásio, participated of the event organized by the Federation of Insurers and Reinsurers of the European Union, CEA: Consumer Protection Conference, in Brussels. At this meeting of regulators, insurers, academics, politicians and consumer defense entities, it was possible to conclude that the European insurance industry’s challenge is to identify how to inform in a more objective and concise way what is really essential, so that the consumer may decide as regards the appropriate coverage to their expectations and needs. The Presidents of Insurance Companies appointed their representatives to compose the referred Committee, and the Board of Directors of CNSeg approved the work agenda proposal focused on several activities for 2010, celebrating the 20 years of the Consumer Defense Code’s validity (Federal Law 8.078/90). March 3rd of 2010 was the day chosen to begin the agenda, with the I Interactive Conference of Insurance Consumer Protection, also celebrating the international day of the consumers rights commemorated on March 15th.

Foreign Missions at CNSeg CNSeg hosted executives of foreign insurance and reinsurance companies that seek information about the Brazilian market to include them to their strategies as regards to Brazil. • Lloyd’s – April 16th. Entourage composed by more than 30 executives of the English market, by the Director of International Markets, José Ribeiro and by the President of Council of Lloyd’s, Lord Levene. The President of CNSeg hosted a lunch in honor to the largest Lloyd’s entourage visiting a foreign country. The entourage attended lectures given by the holder of DIRER and by the President of ABECOR-RE, Carlos Alberto Lenz César Protásio. Both executives had focused the expansion of the insurance

market from 90s and on the regulation of the sector with emphasis on the first anniversary of opening of the reinsurance operations, celebrated on April 17th. • Genebra Association - April 29th. Meeting held with the Executive Director and General Secretary of the Association, Patrick M. Liedtke, aiming at agreeing the modus operandis of CNSeg for collaboration of the preparatives of the General Meeting of the Genebra Association to be held in Rio de Janeiro. The event will take place from May 25th to 28th, 2011. The 1st Vice-President of CNSeg and President of Sul América, Patrick Larragoiti, welcomed the executive of Genebra Association. This meeting counted on the attendance of representatives of SUSEP, IRB-Brazil Re, ABECOR-RE and the holder of DIRER, Maria Elena Bidino. • Lord Mayor of London City – May 7th. The entourage, composed by 11 integrants, with the presence of the Britain General Council, Tim Flear, was hosted by the President of Generali, Frederico Baroglio, the Director of CNSeg, representing the President of CNSeg. The holder of DIRER made a presentation of the new model of institutional representation of Brazilian insurance market, explained about the main characteristics of the market and made positive projections of growth for the market. Following, the Executive Director of Insurance National School, Renato Campos, and the Coordinator, Maria Luiza Martins, presented the several activities of the School. • World Bank – May 28th. CNSeg and the Committee on Home/Housing Insurance of Fenseg hosted the Entourage of the World Bank, interested in subjects related to Mortgage Insurance and Home/Housing Insurance. The President of FenSeg, Jayme Garfinkel, attended the meeting.

hostess of the 14th meeting of international insurance associations that is held before the Annual Conference of the IAIS. That year, 28 representatives of the most important insurance associations of the world attended the Conference. • World Bank – October 26th. Meeting with the expert in insurance of the World Bank, Mr. Rodolfo Wehrhahn, about Consumer Protection Insurance, object of his lecture at IAIS Conference. It was approved the translation into Portuguese of the Primer Series on Insurance, elaborated and edited by World Bank, which is available at CNSeg website.

Lectures in National Events • August 13th – The holder of DIRER, Maria Elena Bidino, was discussant at the I National Meeting of Actuaries, held in São Paulo and organized by CNSeg and Funenseg. • August 20th – Opening class given at the MBA in Insurance and Reinsurance on “New Challenges of the insurance Brazilian market – Reinsurance, Microinsurance and Rural Insurance”, held in Rio de Janeiro and organized by Funenseg. • September 22nd – Lecture about the Microinsurance and Reinsurance Market, given during the II Actuary Week of Federal University of Rio de Janeiro (UFRJ). • October 1st – Training about operational questions of the reinsurance, given at KPMG, held in São Paulo. • October 13th and 15th – Class given at the MBA in Insurance and Reinsurance, held in Rio de Janeiro and organized by Funenseg. • November 30th – II Seminar on Ombudsman Service held in Rio de Janeiro and organized by CNSeg.

Financial Education

• Financial Services Authority (FSA) – August 5th. Meeting with Mrs. Olivia Davids, from the Consumer Education Department of the regulator agency of the financial system from South Africa, and representatives of SUSEP.

On November 25th, 2009, Mr. Waldemir Bargieri and Mrs. Simone Knust Thuler Cândido presented at CNSeg the National Strategy for Financial Education (ENEF) to the Board of Directors of the Confederation.

• International Meeting of Insurance Association (IMIA) – October 29th. CNSeg was the

During the presentation it was explained that the goal is the development of a national project

for Financial Education, initiative of entities and integrating bodies of the Committee on Regulation and Supervision of the Financial, Capital, Insurance, Pension and Capitalization Markets (COREMEC), and that serves to a current need of the society. The presentation demonstrated that the economic, social and technological changes of the recent years have been appointing to the urgency in implementation of actions with the purpose to educate financially the population, and not only in Brazil. All over the world, the financial market is even more sophisticated. Through the Financial Education, consumers and investors would improve the comprehension on financial products and also would develop abilities and safety to know the risks and opportunities, in order they may make their choices consciously and know where to search for help, then improving the relationship with their finances. Thus, Brazilian government constituted in November, 2007 a working group with representatives of the Brazilian Central Bank, Securities Commission (CVM), coordinator of the WG, Secretariat of Open Private Pension (SPC) and Superintendence of Private Insurance (SUSEP), to develop a proposition of National Strategy for Financial Education, providing for the performance of a national inventory of actions and projects for Financial Education in the Country. This WG will also organize a research that will map the level of financial knowledge of the Brazilian Population.

The strategy has as main objectives: • To promote and to foment the culture of Financial Education in the Country; • To extend the comprehension level of the citizen to make conscious choices related to the administration of their funds; • To contribute for the efficiency and strength of financial, capital, insurance, open private pension and capitalization markets. The guidelines that direct the actions of the Strategy are the following: • • • •

Permanent State Program; Actions of public interest; National scope; Centralized management and decentralized performance; • Three levels of acting (information, formation and orientation); • Permanent and periodic evaluation and review; • Participation of public entities (MEC, MJ, MD) and private (ABRAPP, ANBIMA, BM&F and BOVESPA, CNSeg and FEBRABAN).

Technical Committees The Direction of Institutional Affairs coordinates the works of the Technical Committees of CNSeg: Reinsurance, Ombudsman Service, Arbitration and Human Resources.

Committee on Reinsurance President: Marcus Viana Clementino Number of Meetings: 5 Number of Members: 21 Major Subjects Matters Discussed:

The ENEF’s success will contribute to create a more conscious financial consumption by the population, to ensure the knowledge of accepted risks by the consumers and to reinforce the stability and trust in the National Financial System. In addition to actions intended for the adult target public, ENEF provides for actions specifically addressed to the Financial Education at the Schools, following a world trend. The effects of theses actions will only be noted at medium and long term, but they are essential for the sustainability of this government effort and the civil society, by partner entities in such project.

SISCOR – Reinsurance Offer Control System SISCOR, that shall be made available for tests and approval on July 2010, will permit to control the reinsurance offers to the local reinsurance companies – CNSP Resolution no. 168/2007 (40% of the risks) and will support the insurance companies when supervised by SUSEP. Moreover, the system will make possible the offer of excess not accepted by the local reinsurance companies to the admitted and eventual reinsurance companies, and the performance and organization of statistics related to the offers.

Tax on Financial Transactions (IOF) in Reinsurance operations Meetings were held with representatives of the Secretariat of Economic Policy, Brazilian Central Bank, Federal Internal Revenue aiming at reducing to zero the percentage of the IOF on the foreign currency entry in Brazil resulting from payments made by foreign reinsurers. The reasons and justifications were consolidated in Official Letters signed by the Presidents of CNSeg, ABER and ABECOR-RE. On November 24th, it was held meeting for elaboration of wording proposal of the DecreeLaw that would reduce to zero the IOF percentage in reinsurance operations. Accounting of the Committee on Reinsurance CNSeg, ABER and ABERCOR-RE did not agree with the accounting classification of the committee on reinsurance paid by the reinsurer to the cedent, as Earned Premium of the Cedent, according to understanding of the DECON of SUSEP. A letter was sent to SUSEP with technical justifications, when were held several meetings. The holder of DIRER, Maria Elena Bidino, was invited to participate of the meeting at the Committee on Accounting Pronouncements to defend the standpoint of CNSeg, together with representatives of IBRACON and ABER.

Committee on Ombudsman Service President: Mário Rossi, Mapfre Vera Cruz Seguradora S/A Number of Meetings: 5 Number of Members: 36 Major Activities: Event – November 30th – II Seminar on Ombudsman Service of the Insurance Market, at the Funenseg auditorium. More than one hundred practitioners attended the meeting, whose theme was “Transparency in the Customers Relation”. Relevant participations: DPDC, SUSEP, PROCON-SP. DPDC – Approach with the DPDC, of the Secretariat of Economic Law of the Ministry of Justice. Contact with Dr. Ricardo Morishita, to propose the retake of the ombudsman service joint committee/DPDC and the pilot project with PROCON of Bahia or other state with

larger number of complaints, in order to know the actual situation of the consumer service. Based on this meeting, was created, at CNSeg website, a space for the Insurance Companies’ ombudsman services, with links for the Insurance Companies’ Ombudsman websites. It was also created an e-mail: (comissao.ouvidoria@cnseg. org.br) to centralize eventual complaints by the assureds. Bill no. 342/2007 – Monitoring and sending of revise suggestions of the Bill no. 342/2007 which disposes on the activities of Ombudsman Services in Private and Public Companies and set other arrangements.

Committee on Human Resources President: Maria Helena Monteiro Number of Meetings: 6 Number of Members: 29 Major Activities: Lectures and presentations held at the Committee on Human Resources: Thematic Lecture with Trade Unions of the Insurance Companies’ Employees, about the following subjects: • Trade Union Contribution. • Rest Paid • Institution of the insurance technician position. • Reduction of the working journey. • Complaint agenda of the Joint Convention of Work of the Insurance Companies’ Employees in 2010. Diversity Valorization – Presentation of the FEBRABAN Program for Professional Qualification – Inclusion of Disabled People at the Bank Sector Training Focused on Development Improvement - Lecture held by Franquality Consultoria de RH Identification Tools and Talents Management – Lecture held by RH Capital Consultores Associados Technical Certification In 2009 were issued 233 technical certificates: Public Service – Insurance: 94 Public Service – Capitalization:15 Public Service – Pension: 5 56

Internal Controls: 31 Losses Adjustment – Motor: 37 Losses Adjustment– Insurance: 40 Losses Adjustment – Pension: 2 Direct Sale – Insurance: 6 Direct Sale – Pension: 3 From 2006 to 2009 we had a total of 7.282 certificates issued.

International Institutional Relationships Participation in international forums of insurance.

Mercosul CNSeg is represented in the negotiations of the Mercosul by the Brazilian Committee on Microinsurance. Attending to various meetings held by the official organisms in charge of the negotiations in the Mercosul, the Committee has been contributing to base the elaboration of projects that aim at setting up the single market of insurance of the constituent countries. The Committee on Insurance (CS), organizational element of the Mercosul, continued to handle with the changes, proposed by its Brazilian section, for the Milestone Agreement on Access Conditions and the Agreement Project on Essential Conditions of Working. Regarding to the Conditions of Working, after the analysis of the fulfillment level of the Core Principles of Insurance emanated from IAIS, continues the discussion aiming at creating flexible rules to ensure the adoption of international practices of supervision and control in the Mercosul countries. CNSeg attendance to SWG-5, through the work carried out by its consultant, José Carlos de Almeida, in the Mercosul forum, to handle with subject matters of cargo insurance. As well as attendance to negotiations amongst Brazil and further Latin American countries at other specific forums of the Southern Cone, Bilateral Agreements, or private representative entities, due to the intensification of the meetings to seek eliminating quickly the asymmetries, offering technical support to the government and private entities. This occurred in several actions to accelerate the integration process that shall result in increase of the premiums volume of the cargo portfolios: (i) improvement of the supervi-

sion system of the frontiers; (ii) increasing of the minimum values of sum insured of the Liability - International Transit Carrier-Cargo insurance (RCTR-VI); (iii) implementation of the Contractual Liability for carriage of bus passengers, enhanced in relation to that available in Brazil; (iv) negotiations for the acceptance of additional coverage for Suspended Taxes as guarantee provided for in the Clause 16 of the International Land Transit Carrier Agreement (ATIT). Such actions should represent an increase of the premiums volume in 2009, after making available the Customs Guarantee coverage through fronting operation for Brazilian carriers, a need especially for exports. With respect to bilateral agreements, were concluded agreements with Guyana and Suriname at the same terms of the agreements entered into in the Mercosul.

Inter-American Federation of Insurance (FIDES) FIDES congregates representative entities of the private insurance companies of the Americas and Iberian Peninsula, as well as reinsurance companies and institutions committed to promotion, professional qualification and insurance and research, situated in 22 countries. Since it was formed, in 1948, during the II Hemispheric Insurance Conference held in Mexico City, CNSeg is its affiliated and has been contributing for the development and strengthening for the representativeness of the FIDES. In the 32nd Hemispheric Insurance Conference, held in Las Vegas, Nevada – USA, from November 1st to 4th, 2009, the FIDES General Meeting accepted proposal to issue a Las Vegas Declaration with the intents of the insurance markets, in its representativeness scope. Such proposal was expressed in two declarations: “Balance in the Regulation” and “Insurance for a Better Life”, aiming at creating by the authorities, conditions that encourage the insurance sectors development and increasing the insurance penetration as a way of economic development and support to the population welfare. At the same occasion, were elected for the Board of FIDES, 2009 – 2011 biennium: President: Enrique Rodriguez (Guatemala)

General Secretary: Recaredo Arias (Mexico) 1st Vice-President and President of the Center and Caribbean Regional Commission: Ricardo Cohen (El Salvador) 2nd President and President of the Andina Regional Commission: Renzo Calda Giurato (Peru) 3rd Vice-President and President North Regional Commission: Pilar Gonzalez de Frutos (Spain). President João Elisio Ferraz de Campo gave lecture about “Perspectives of the Brazilian Insurance Market” at Las Vegas Conference. The speakers in the FIDES were the following Brazilian Executives: President of Mapfre, Antonio Cássio dos Santos, and Director of Bradesco Vida e Previdência, Eugenio Liberatori Velasques. Upon convention with the Inter-American Development Bank (BID) /Multilateral Investments Fund (FUMIN), FIDES will participate of projects development addressed to the microinsurance implementation in Latin America. This initiative is part of program to promote the economic, social and institutional sustainable growth of the region, through investments and operations of technical cooperation.

International Association of Insurance Supervisors (IAIS) Formed in 1994, based on the expertise of the National Association of Insurance Commissioners (NAIC), IAIS is composed by around 200 supervisory authorities of insurance of more than 190 countries, as members, and also counts on the participation of more than 120 institutions/companies related to the insurance activity of countless countries, as observers. SUSEP became to take part of the composition of its members in 1996 and CNSeg, as observer, in 2002. One of the major duties of IAIS is to establish core international principles and standards to be reference to the insurance supervisors from all the jurisdictions for development of the systems and practices to control the world insurance activity. The 16th Annual Conference of IAIS was held from October 21st to 24th, 2009, in Rio de

Janeiro, under coordination of SUSEP and support by insurance sector entities, national and international, public and private, from 85 countries all over the continents. About 500 participants from hundreds of countries discussed the theme “The Insurance as Means for Socioeconomic Development”.

International Meeting of Insurance Associations (IMIA) Institutions that monitor and take part in the IAIS annual conferences have been promoting, simultaneously to those conferences, annual meetings of the associations of insurance companies, referred to IMIA, to handle with themes relative to the standards under discussion in the IAIS, as well as themes of common interest by its members. The following institutions attended the IMIA: ABI, ABIR, ACLI, ACLI, All Russia Insurance Association Moscow, American Insurance Association, ÁSISA, Association of Life Insurance Companies, Association of Spanish Insurers – UNESPA, Canadian Life & Health Insurance Association, CEA, CLHIA, CNSeg, FIDES, Gesamtverband der Deutschen Versicherungswirtschaft, GIAJ, Group of North American Insurance Enterprises, IIS, Insurance Council of Australia Limited, IUA, Korea Insurance Research Institute, LIAJ, Loyd’s, PCIAA, Piob and Toronto Centre, Polish Chamber of Insurance, RIA, Russian Association of Motor Insurers, SAIA, The Geneva Association. On July 18th, it was held an extraordinary meeting, in Brussels coordinated by Insurers and Reinsurers Federations of European Union (CEA) that preceded the 1st International Conference on insurance promoted by CEA. The theme was “Global Lessons of a Global Crisis”. In 2009, as the IAIS was held in Brazil, it was the opportunity of CNSeg hostess the representatives of the insurance international federations and to coordinate the 14th meeting of IMIA, on October 20th, which agreed themes were the following: “Third Country Regulatory Equivalency in Conjuction with EU Solvency II”; “Microinsurance – International Overview”; “Conduct of business”; “Network of Insurance Associations”.

International Insurance Association (IIS) Instituted in 1965, it is a non-profit institution, composed by more than 1,000 members from 92 countries. CNSeg is its affiliated since 2007. The 45th IIS Seminar was held in Amman, Jordan, from July 7th to 10th, 2009: Attended the Seminar: President of CNSeg, João Elisio Ferraz de Campos, Maria Elena Bidino (CNSeg), Salvador Cícero Velloso (CNSeg) and Renato Campos (Funenseg). The seminar counted on the attendance of 500 insurance practitioners of more than 50 countries. The theme of the Seminar was the global demand of insurance, when were discussed subject matters of the market interest, as the consequences of the international financial crisis; the reform of the international financial system and its implications for the world insurance and reinsurance industry; the image of the insurance market; the creation of new products; and the probable sceneries for the world insurance and reinsurance industry.

At the opportunity, the President of CNSeg met the President of Samsung Fire Marine DaeSub-Chi, and the new President and CEO of IIS, Michael J. Morrissey, with whom, amongst other subjects, discussed the preparations for the seminar, which will be held in 2012. Related LINKS: OIT: http://www.oitbrasil.org.br ILO: http://www.ilo.org/global/lang--en/index.htm WORLD BANK: Primer Series on Insuran¬ce: www.worldbank.org./hbfi CENFRI: http://www.cenfri.org CEA: http://www.cea.eu LLOYD’S: http://www.lloyds.com IIS: http://www.iisonline.org IAIS: http://www.iaisweb.org FIDES: http://www.fides.org.br GENEVA ASSOCIATION: http://www.genevaassociation.org IETS: http://www.iets.org.br DPDC: http://portal.mj.gov.br/DPDC/data/Pages/ MJ5E813CF3PTBRIE.htm

Technical Consultancy (COTEC) Consultant: José Ismar Alves Tôrres

Mixed Actions 1. The holder of COTEC, José Ismar Alves Tôrres, coordinated the work of three Technical Committees of CNSeg, Management and Finances (CAF), Actuarial (CAT) and Internal Controls (CCI). He also participated and monitored two Working Groups, one composed by Small and Medium size Insurance Companies and the other, for Intermediation, the later counting on the attendance of representatives of Fenacor. 2. At the beginning of 2009, he acted jointly with the representatives of 20 companies of the insurance market that were convened by the DPDC, for the Public Hearing 03/2009, to report the measures that were being adopted to comply with the set forth in the Decree 6523/2008. The WG that José Ismar Alves Tôrres was coordinating and that dealt with Customer Service (SAC), due to the need indentified to build an en-

vironment for permanent discussions about insurance company/assured relationship, evolved to the creation of the Committee on Consumption Relation, approved by the Board of Directors of CNSeg and started, since then, to be coordinated by Maria Elena Bidino of DIRER. 3. During 2009, the holder of COTEC coordinated and forwarded a manifestation of the insurance market to the Public Hearing 02/2009 — circular that establishes the new codification of insurance branches and disposes on the classification of insurance coverages contained in insurance plans, for accounting purposes. Such manifestation resulted in the SUSEP Circular 395/09, dated December 3rd, 2009 and Public Hearing 03/2009 – circular that disposes on the Public System of Digital Entries (SPED), which culminated with the disclosure of the SUSEP Circular 397/09, dated December 14th, 2009.

4. He also coordinated the work that resulted in the PRESI Official Letter 163/09 dated November 11th, 2009, sent to SUSEP, by which it was proposed the creation of an agenda of prioritized subject matters for the insurance market, about themes such as: • Solvency: it was requested the schedule change, so that the complete implementation happens only in December, 2013. The proposal based on the effects of the international financial crisis, which reduced a lot the funds available for capitalization of the companies. There was also a suggestion that SUSEP would elaborate a schedule for implementation of the underwriting risk for the other branches and the other risks; • IFRS: the request was made in order to adopt the publication requirements according to the international standards, in 2010, only in respect of the consolidated financial statements of public-traded companies or that are required to establish Audit Committee. The request was guided by the observation that in many countries around the world the adoption of this accounting standard was being postponed and that even the IASB, the entity in charge for preparing the IFRS, recommended that insurance companies would not invest funds to meet the Phase I of the IFRS in 2010, since there is an agenda created for adoption by the U.S. of this standard only from 2014;

• High Level Forum: without prejudicing the continuity of the discussion within the technical committees, it was suggested the creation of a high level permanent forum, with representatives of the insurance market and SUSEP, where they would discuss the most impressive normative regulations proposed, evaluate costs and benefits of their implementations, as well as the opportunity and deadline for implementation; • Microinsurance: it was requested the removal of obstacles and the creation of incentives for development of this segment in Brazil. 5. The holder of COTEC, José Ismar Alves Tôrres, as one of the representatives of CNSeg, attended the meeting with appraisers of the Group of International Finance Action (GAFI), in the scope of the Council for Control of International Activities (COAF), where it was discussed subject matters related to the money laundering prevention, fight against terrorism and business with Politically Exposed People (PEP’s) under the Brazilian Insurance Market. The said GAFI (or Financial Action Task Force on Money Laundering (FATP), with its registered office in Paris, was created in 1989 by G-7, under the Organization for Cooperation and Economic Development (OCDE), with the goal to analyze measures, to develop policies and to promote actions to fight against money laundering.

• SUSEP Circular 380/2008: it was requested the creation of mixed Working Group, composed by representatives of the insurance market and SUSEP, in order to identify and to review some regulatory provisions of this Circular;

In 1990, GAFI published a paper entitled “Forty Recommendations”, whose main objectives are the development of a complete action plan to fight against the money laundering and the discussion of actions related to the international cooperation intended for this purpose.

• Proportionality Principle: the proposal consisted that the small and medium size Insurance Companies should have different criteria with regard to regulation. This request is echoed in the Directive of Solvency approved by the European Parliament on April, 2009. In this document, it is clear the legislator’s concern about protection of smaller size companies. One of the aspects addressed is that very strict rules of solvency and capital requirements may lead to an increasing concentration of the insurance market;

In1999, Brazil was invited to assume the commitment to follow those “Forty Recommendations”, as well as to play a role of leadership in Latin America, and to be subject to a process of mutual evaluation. On February 2000, Brazil was evaluated by the first time about its policies and measures against money laundering, effectively implemented. On June 2000, it was presented the final report on the evaluation of Brazil and published the approval of the Country to compose the GAFI,

demonstrating the agreement and knowledge of that organism with the progresses reached, certifying the good image of our Country before the international community regarding this theme. Since then, Brazil has been participating actively of these works. In 2004, further special “Nine Recommendations” were included and, since then, that paper started being referred to “forty plus nine recommendations” of GAFI. Recently, Brazil was subject to a new evaluation process by the appraisers of GAFI, for the purpose of verifying its progresses with respect to the compliance with the recommendations of best international practices. In this evaluation process, were interviewed the representatives of SUSEP and CNSeg, besides three insurers groups selected by the appraisers (Grupo Bradesco Seguros, Grupo Mapfre and J. Malucelli). Due to the concerns showed by the appraisers of GFI, the Board of Directors of CNSeg decided, by meeting held in November 25th, 2009, to divulge and to share with others insurance market leaders a summary report of this meeting with appraisers of GAFI. 6. With the purpose to meet the requests sent through the PRESI Official Letters 149/2009 and 163/2009, SUSEP created the mixed Working Group, with representatives of that autarchy and the insurance market, to deal with some issues of the Circular 380/2008. The holder of COTEC, José Ismar Alves Tôrres, was responsible for the arguments and coordination of the work, in the insurance market, and the first meeting of this Group was held in November 2009, when were addressed subjects that the insurance market presented difficulties to comply with, arising from the requirements set forth in the referred Circular. 7. COTEC coordinated the creation project of a statistic database of the Brazilian insurance market, in the internal scope of CNSeg, for diffusion at the Portal “Living Safe”, with information on the four Sectorial Federations. This work started to be developed in the last quarter of 2009 and once concluded, will enable

that people interested in obtaining information friendly about the development of the insurance market. 8. The holder of COTEC participated of the working coordination to create the Internal Regulation of the Technical Committees of CNSeg, resulting in such working approval by the Board of Directors, with the purpose to make changes arising of the new institutional representation of the insurance market, from the creation of new four Sectorial Federations (FenSeg, FenaPrevi, FenaCap and FenaSaúde), as well as to regulate and to improve its way of action. A deadline was given to the current technical committees are adjusted to the new regulation.

Technical Committees The discussed and addressed matters in the meetings of the technical committees are presented in minutes, prepared by practitioners of CNSeg, and approved by the attendants of the meeting. The meetings are held by video conference, enabling the participation of the representatives of members located in Sao Paulo city of and neighboring municipalities, without needing to travel to Rio de Janeiro, saving time and money of the companies.

Committee on Management and Finances (CAF) President: Haydewaldo Roberto Chamberlain da Costa, Bradesco Seguros S/A Coordinator: José Ismar Alves Tôrres Total Meetings Held: 8, with average of 24 attendants Number of Members Enrolled: 95 Permanent: 49 Deputies: 46 Number of companies represented: 51 Major Activities: Meetings, Working Groups and Actions: • Representatives of CAF participated actively of the accounting committee of SUSEP that had as major themes the chart of accounts for Insurance and Reinsurance Companies, entries of the reinsurance operations and

commissions in the Insurance Companies and convergence to the international standards (IFRS). • Representatives of CAF also attended the meetings of the Committee on Accounting Pronouncements – Working Group on Insurance - IFRS 4, where it was discussed with the representatives of the regulatory agency (SUSEP), representatives of the Brazilian Institute of Independent Auditors (IBRACON) and representatives of external audit, the convergence to the IFRS, in respect of the insurance accounting. • Participation of the representatives of CAF in several mixed working groups, with representatives of Brazilian Association of Reinsurance Companies (ABER) and advisory companies, to deal with entries of reinsurance operations, especially the reinsurance commission, with the purpose to found positioning which was sent to Committee on Accounting Pronouncements (CPC) and SUSEP regarding this theme. • Participation of the representatives of CAF in meetings that dealt with the shield of pension plans. • Periodic meetings with associated members of CAF, where are reported the subjects discussed at the Accounting Committee of SUSEP, as well as are dealt with subjects regarding to the amendments in the corporate and tax legislation, at the General Chart of Accounts, discussions around the Law 12.007/2009, and the new regulations on the SPED. • The fiscal subjects are dealt with the subcommittee (SCAF), coordinated by Antonio Carlos Nogueira Pedrosa, from Sul América Seguros.

Actuarial Committee (CAT) President: Almir Martins Ribeiro, Marítima Seguros Coordinator: José Ismar Alves Tôrres Total Meetings Held: 12, with average of 23 attendants Number of Members Enrolled: 84 Permanents: 42 Deputies: 42 Number of companies represented: 48

Event Held: I National Meeting of Actuaries (ENA) Themes: IFRS/Liability Adequacy Test (LAT), reinsurance, retention limit, audit and actuarial evaluation, technical provisions, biometric table, solvency, health insurance and actuarial indicators. Lecture: Evolution on the Sophistication of the Predictive Models in the Price of Personal and Business Lines Speakers: Andrew Cooper and Cristina Mano (Towers Perrin) Major Subjects Matters Discussed at the meetings: • Intensive work was carried out by the representatives of CAT jointly with other technical committees, to offer suggestions for the phase of the public hearing that resulted in the SUSEP Circular 395/09, which deals with the new branches coding. This normative will provide great changes in the operating systems of the companies, reason why it has been subject of ongoing concerns by the members of CAT. • Works produced by representatives of CAT to subsidize understandings and requests formulated to SUSEP, related to the calculation of UPR for the life and cargo segment. • Representatives of CAT participated actively in the discussions of the Technical and Actuarial Chamber, created by SUSEP and composed by representatives of the insurance market and SUSEP, which had as main themes the adoption of Liability LAT/IFRS, and have been produced several minutes about these meetings. In summary, the new rules will consist to bring to present value all the technical provisions, with the use of different premises in the model, as well as the constitution of a new provision called PLAT. These changes will cause major impacts to the insurance market, what demanded countless internal works to support the discussion with SUSEP and Board of the companies. • Regular meetings with associated members of CAT, where are reported the subjects discussed at the Technical and Actuarial Chamber of SUSEP, as well as referral of other issues that are part of the permanent agenda of

the committee, as the creation of a line course to the actuarial area at Funenseg, besides the discussion of all programming to hold the first national meeting of actuaries (I ENA).

Committee of Internal Controls (CCI) President: Assizio Aparecido de Oliveira, Mapfre Vera Cruz Seguradora S.A. Coordinator: José Ismar Alves Tôrres Total of Meetings Held: 10, with average of 32 attendants Number of Members Enrolled: 114 Permanent: 63 Deputies: 51 Number of companies represented: 52 Event Held: IV Seminar on Internal Controls, Audit and Risk Management Themes: Internal Controls - view of the regulator, solvency II, computerized management, risk mitigation, prevention and business continuity. Lecture: Worldcompliance System - Record Database and PEP’s Speaker: Carlos Loureiro (Tech Supply) Major Subjects Matters Discussed at the meetings: • The members of the CCI accompanied and participated actively of all matters related to implementation of the SUSEP Circular 380, as regards the actions to fight against terrorism, money laundering and politically exposed people (PEPs). • Working Groups were created, composed by representatives of CCI, to prepare the Guide of Good Practices in Insurance about insurance investigation, audit of the system of internal controls and losses audit. • Studies were conducted which resulted in proposal to SUSEP in order to permit to make flexible the review criteria of the specific internal controls to prevent frauds, regulated in SUSEP Circular 344 (PRESI Official Letter 156/09 dated June 30th, 2009). The resulting proposal aims at transferring from the external audit to the internal audit the responsibility for that review, so that to reduce costs for the companies and to increase the scope of works.

• It was created a Working Group, with representatives of CCI, to examine and to propose the development of the course of Internal Controls, in partnership with Funenseg, so that the interested professional may have a comprehensive view of this area. • Participation of the representatives of CCI in meetings with the appraisers of GAFI, culminating in the paper sent to the insurance market, in which are highlighted the main concerns in relation to the international recommendations to fight against terrorism and money laundering. • Creation of Working Group that dealt with the feasibility of the fourth consecutive annual seminar of CCI, involving an intense negotiation with external sponsors to enable the entire agenda and logistics of the event. Working Groups Small and Medium Size Insurance Companies Coordinator: Pedro Pereira de Freitas, American Life Companhia de Seguros Total of Meetings Held: 6, with average of 13 attendants Number of Members Enrolled: 26 Number of companies represented: 19 Lectures: Solvency II and Small and Medium Size Insurance Companies Speaker: Ricardo Pacheco (Ernst & Young) Major Subjects Matters Discussed at the Meetings: • Discussion that resulted in proposal to SUSEP to establish different rules for smaller size insurance companies (Proportionality Principle) and the creation of the High Level Forum. • Discussion on the impacts on smaller size insurance companies of the new rules under discussion that will result in convergence to the IFRS, in particular the proposals for the LAT. • Discussion on the current rules of solvency and minimum capital and theirs impacts on the smaller size insurance companies. • Monitoring difficulty and competition in regulatory environment in which does not differentiate the company size.

• Deepening of studies on proposals for joint solutions intended for the costs reduction, as in centralized negotiations on bank tariffs charging and possible viability of common Back Office for the smaller size insurance companies. Working Group of Intermediation Joint Coordination: João Elísio Ferraz de Campos, by CNSeg, and Robert Bittar, by Fenacor Total of Meetings Held: 2, with average of 18 attendants Major subjects Matters Discussed at the meetings: • Database of insurance brokers, established under the Central of Services of CNSeg;

• Self insurance – irregular performance of the insurance activity by associations and cooperatives; • Discussions within the Mixed Working Group for increased use of the Digital Certification in the insurance market; • Monitoring of the Bills at the Chamber/Senate of common interest of insurance companies and brokers; • Monitoring of the discussions involving the Bill 3.555/04; • Analysis and manifestation of CNSeg about 49 points of the Brokers Congress (FlorianópolisSC).

Direction of Protection to Insurance (DISEG) Director: Sergio Duque Estrada

Council of Protection to Insurance (CONSEG) President: Paulo Miguel Marraccini Integrated by 15 Executives representatives of the Associated Insurance Companies, CONSEG met in February, April, June, August and October 2009, alternately, in São Paulo and Rio de Janeiro cities. These meetings had the purpose to monitor the implementation of several actions contained in the Integrated Plan for the Prevention and Reduction of Insurance Fraud, as well as to control the amounts allocated for development of the program actions and activities. Among the issues analyzed at the meetings, deserved highlight the analysis and monitoring of covenants that meet the services of Denouncement Hot-Line against Insurance Fraud, technical and educational services, development of computerized systems to support the implementation of actions and annual survey of fraud quantification.

Integrated Plan for the Prevention and Reduction of Insurance Fraud After six years from the implementation of the actions provided for in the Integrated Plan, CNSeg consolidated several institutional initiatives to assist Insurance Companies to

compliance with the provisions contained in SUSEP Circular no. 344, of June 21st, 2007, which established the requirement for internal controls specific to the prevention of fraud in insurance operations. The program premise is the focus on prevention of fraud incidents to mitigate its practice, even before contracting the insurance or the occurrence of the losses events. This work is directed not only to the professional environment of the insurance, but it also reaches the insured public, which generally ignores the criminal and civil effects applicable to crimes against insurance, as revealed survey conducted in 2004. Encouraging the exchange of technical knowledge between Interlocutors named by the Insurance Companies at CNSeg and stimulating the improvement and specialization of the areas of analysis of the insured risk and losses in all branches, CNSeg provides access to information systems to identify possible signals of irregularities, develops a methodology to quantify the fraud to translate into numbers the fraud behavior within the insurance sector. It also conducts specific lectures on the theme fraud prevention, makes

partnerships in specialization courses and is even dedicated to the preparation of technical manuals related to the subject matter. All this effort represents the engagement of the insurance market to strengthen the system, also working in collaboration with public authorities to reduce the practice of irregularities against the insurance. Following are the major achievements of DISEG in 2009, with the most relevant information about the implementation of the actions that integrate this Plan.

Denouncement Hot-Line against Insurance Fraud Under covenants with the operators of the State Denouncement Hot-Lines, the service of Denouncement Hot-Line against Insurance Fraud aims at increasing the identification of fraud cases. Operating in the states of São Paulo, Rio de Janeiro, Pernambuco, Rio Grande do Sul and Espírito Santo, the society is guaranteed by the anonymity and receives a protocol for monitoring the process of denouncement. Assisting the police authorities to elucidate the frauds committed, these services contribute to strength the insurance market and to protect the good assureds from the adverse effects of the fraud.

In Rio de Janeiro, the channel that receives the denouncements is the telephone number (21) 2253-1177. The states of São Paulo, Pernambuco, Rio Grande do Sul and Espírito Santo the service works through national call by the number 181.

In 2009, 8,000 new posters were produced as part of a publicity campaign for these services, with the purpose to increase the participation of the society and the general public in the prevention of irregularities and criminal acts against the insurance.

Relationship with the Public Power, Technical Organizations and Representative Entities CNSeg, through several covenants with Governmental Bodies, Technical Organizations and Representative Entities, collaborates with the Public Power, by request and demand, in the cases it is called to provide relevant information for clarifying the fraud cases and other felonies. CNSeg, as Permanent Member, takes part at the Thematic Chamber of Legal Effort of the National Traffic Council (CONTRAN), in Brasília. 65

Information Intelligence Systems

ally since 2004, are generated the indicators of fraud against insurance, composed, thus unpublished historical series of such occurrences.

DISEG is in charge of development and management, institutionally, computerized systems based on information intelligence, sharing and crossing data, aiming at offering elements to the Insurance Companies that may contribute with their initiatives of prevention and repression to the deviations of insurance business.

The consolidated results of the 6th Cycle of the SQF show that in 2008 there was R$ 1.91 billion of claims in questionable losses, corresponding to 10.8% of the total value of the losses. The value of the frauds that could be confirmed amounted to R$ 214 million, 1.2% lower than the sum assessed in the previous year, and represented 11.2% of the value of questionable losses, while in 2007 reached 14%. The commitment of the Insurance Companies to this edition of the survey reached 91% in participation and 82% in considered answers.

Fraud Quantification System (SQF) Through the SQF, fed by the Insurance Companies in all the branches of insurance, except Health and Open Pension Funds, annuFraud Indicators - All Branches* - 2008

Values in R$

Loss

1.91 bi 17.8 bi

➡

Confirmed Fraud

➡

10.8%

Investigated Fraud

➡

Questionable Fraud

1.9%

Questionable Loss Loss

1.2%

Loss with Identified Fraud Loss

0.34 bi 17.8 bi

Questionable Loss

0.21 bi 17.8 bi

Loss with Confirmed Fraud Loss

Investigated Loss Investigated Fraud

Confirmed Fraud

18%

11.2%

19.9%

12.4%

0.21 bi 1.91 bi

➡

Loss with Identified Fraud Questionable Loss

0.34 bi 1.91 bi

➡

Confirmed Fraud

➡

Investigated Fraud

Loss with Confirmed Fraud Questionable Loss

0.34 bi 1.73 bi

Loss with Identified Fraud Investigated Loss

0.21 bi 1.73 bi

Loss with Confirmed Fraud Investigated Loss

Earned Premiium

➡

6.6% 1.91 bi 28.9 bi

Confirmed Fraud

➡

Investigated Fraud

➡

Questionable Fraud

1.2%

Questionable Loss Earned Premium

0.34 bi 28.9 bi

Loss with Identified Fraud Earned Premium

0.7% 0.21 bi 28.9 bi

Loss with Confirmed Fraud Earned Premium

➡

* Excepting Health and Open Pension Funds Variation in relation to 2007: largest smaller

The full results of this 6th cycle, detailed by branches of insurance, in values and numbers, was divulged to the insurance market and related entities as a Guide for Quick Reference and as a Full Report, with printing edition of 8,000 and 2,500 copies, respectively, the latest being bilingual, in Portuguese and English. These publications are also available at the CNSeg website.

Guide for Quick Reference

Rio Preto, Santos, Ribeirão Preto, Araçatuba, Belo Horizonte, Juiz de Fora, Uberlândia, Ipatinga, Varginha, Brasília, Goiânia, Cuiabá, Palmas, Rondonópolis, Salvador, Porto Alegre, Maringá, Curitiba, Blumenau, Florianópolis, Joinville, Recife, Natal, Fortaleza, Maceió, João Pessoa, Aracaju and Manaus. DISEG conducted specialized training with a total of 90 participants, offered to the integrants of the call-center team and other technicians of NGOs of the associated Denouncement HotLines in the cities of Rio de Janeiro/RJ and Vitória/ES. Also in partnership with the National School of Insurance, was created the Course on Insurance Investigation - Basic Module, available to the market since 2006, to meet the demand in Sao Paulo, Brasília and Rio de Janeiro, with 268 graduated students. In 2009, the Course graduated 51 students in RJ and SP.

Full Report

Public Access to Web Information The access to the information on the actions of prevention of insurance fraud is also available at the portal of the Insurance Market www. viverseguro.org.br, in the area reserved to CNSeg, in the menu Services, under the title Protection to Insurance. Among the options offered are the numbers of fraud quantification, the content of awareness lecture on the theme fraud, the covenants of the Denouncement Hot-Line against Insurance Fraud, among other information. This content is also addressed to the consumer public and the society in general, in order to inform the population about the consequences illicit acts like that may cause.

Lectures, Courses and Seminars in 2009 The partnership between DISEG and Funenseg provided the achievement of 60 lectures on Prevention of Insurance Fraud, of mandatory attendance for students of the Insurance Broker License Course as part of the curriculum. These lectures counted on attendance of 2,163 students in the cities of São Paulo, São José do

Educational action in the year of 2009 reached an audience of 2,274 people, distributed by percentage in the different formats of educational events, as represented in the chart below:

Lectures, Courses and Seminars 2.2%

3.9%

93.9%

Lectures, Trainings and Courses Trainings Qualification Courses

In 2009, were commercialized 400 units of the training of Prevention to Frauds in DVD format, produced in partnership between DISEG and Funenseg, by request of the Committee on Internal Controls of CNSeg.

In the chart below it is possible to see the evolution of the public in different educational actions on prevention to insurance fraud, performed from 2004 to 2009.

Lectures, Courses and Seminars 4000

3000

2000

1000

2004 Lectures

2005

2006

Qualification Courses

The insurance fraud has as result the raising of prices of the coverage commercialized by Insurance Companies, since the loss ratio is the main factor in determining their prices. The distortion of random effect caused by the fraud in the losses occurrences reflects directly in the warranty costs, reason why the prevention and repression are obligations of the State,

2007

2008

External Seminars

2009 Trainings

Authorities, professionals who are activists in the segment, society and consumers. In this respect is engaged the program of the Integrated Plan under the management of the Direction of Protection to Insurance of CNSeg, operating since February 2003, whose results will be collected over time upon indicators and metrics of the actions taken.

Central of Services (CESER) Director: Horácio Cata Preta

Central of Services The Central of Services of Fenaseg administrates 24 databases, from itself and from third parties, whose content is made available for the insurance mark and entities under convention. The Insurance Companies use the information to underwrite risks and to adjust losses, with the purpose to add value to the products and services made available to their clients, and always aiming at preventing fraudulent acts against the Insurance, improvements of the risks under-

writing in all the branches of insurance and the enhancement of the losses adjustment procedures.

Board of Directors of the Central of Services The Board is composed by 11 members representing the Confederation and the Federations, and is chaired by the President of Fenaseg/ CNSeg.

Board of Directors Full Name

Company

Representation

João Elisio Ferraz de Campos (Presidente) Fenaseg/CNSeg

CNSeg

Assizio Aparecido de Oliveira

Mapfre Vera Cruz Seguradora

FenSeg

Casimiro Blanco Gomez

Porto Seguro Cia. de Seguros Gerais

CNSeg

Eduardo Sérgio de S. G. Nunes

Generali do Brasil

FenSeg

Fabio Lins de Castro

Prudential do Brasil

Fernando Rodrigues Mota

Mongeral Aegon S/A Seguros e Previdência

Francisco Alves de Souza

União Previdenciária Cometa do Brasil - COMPREV

Marcio Serôa de A.Coriolano

Bradesco Saúde S/A

Natanael Aparecido de Castro

Brasilcap Capitalização S/A

FenaCap

Oswaldo Mário P.A. Azevedo

Sul América Seguros

FenSeg

Reinaldo D’Errico (*)

Grupo Liberty Seguros

FenSeg

FenaPrevi CNSeg FenaPrevi FenaSaúde

(*) Mr. Reinaldo D’Errico, of Grupo Liberty Seguros substituted Mr. Emílio Vian Vieira, of Allianz Seguros S/A, who left the company in May/2009.

Meetings During the year 2009, the Board held 10 meetings to address issues related to services rendering to the insurance market and administrative matters of the Central of Services.

Subject Matters Approved • List of Service Prices of the Central of services - 2009; • Budget of the Central of Services; • Approval of monthly accounts of the Central of Services;

• Covenants with DETRANS for operation of the Vehicles Contracts Record System (SISCORF) and Leasing Purchase Option Electronic Information System (SIVEL); • Amendment of the Contract with GRV Solutions S/A for the operation of the SISCORF and SIVEL; • Use of BDCor to meet SUSEP Circular no. 380; • Support to the V Insurance IT Meeting, held on November 13th, 2009.

Projects Approved or Analyzed • National Record of Losses - Cargo; • Weather Forecast Monitoring System CLIMATEMPO; • Central of Insurance Policies and Contracts Securitization (CESAC/CELISEG); • Electronic Document Exchanging System (SIDE); • Employees Record Data Verification System at the FGTS base (SIVCAD); • Politically Exposed People Identification System (SIPEP); • Reinsurance Offers Control System (SISCOR); • Liens Automatic Settlement System (SILAG).

Services Introduced

Meetings During 2009, CPTI held 12 meetings to deal with themes related to infrastructure of IT, adoption of standard by the insurance market, and compliance with the SUSEP regulations. Projects Approved or Analyzed • VI Insurance IT Meetting; • Acord; • Digital Certification; • IT Metrics of the market

Working Groups and Services Monitoring Groups Monitoring Group on RNS – Motor Risks Coordinator: Gilvan Alves, Sul América.

• Leasing Purchase Option Electronic Information System (SIVEL); • Vehicles Financing Contracts Record System (SIRCOF); • Improvements and introduction of charging by the access – SCA – Motor – Reimbursement; • Introduction of charging by the access to the systems on October 2009 – SCA – Legal Patio; • Development of Vehicle Safety Certificate Issue (ECV) additional module to support the certified survey companies – National System of Control and Vehicle Safety Certificate Issue (SISCSV); • Funds for research and technical studies – Vehicle Experiment and Safety Center (CESVI); • National Record of Losses (RNS) – Personal Risks; • National Record of Losses (RNS) – Property Risks.

Monitoring Group on RNS – Personal Risks Coordinator: Acácio Fernandes, Sul América Seguros

Committee on Processes and Information Technology (CPTI)

The following services are available for use by the Insurance Companies and associated entities: • Insurance Companies that are clients of the Central of Services (see table 1); • Systems of the Central of Services (see table 2);

President: Maria da Glória Guimarães, Companhia de Seguros Aliança do Brasil Coordinator: Horácio L.N. Cata Preta, Fenaseg/ CNSeg

Monitoring Group on RNS – Property Risks Coordinator: Marco Bittencourt, Porto Seguro Monitoring Group on RNS – Cargo Risks Coordinator: Rose Matos – Porto Seguro Subcomittee on Central of Bonus Coordinator: Marcelo Ordonez – Allianz Seguros Monitoring Group on RNS – Frontiers Project/ National System for Identification of Vehicles in Transit (SINIVEM) Coordinator: Abelardo Guimarães – Bradesco Auto e RE

Available Services

Minas Brasil / Zurich

Sul América Seguros

Brasilveículos

Alfa Seguradora

Porto Seguro

Bradesco Seguros

Mapfre

Hdi Seguros

Unibanco / Itau Seguros

Maritima Seguros

Caixa Seguradora

Azul Seguros

Generali Seguros

Liberty / Indiana Seguros

Tokio Marine Seguradora

Mitsui Sumitomo Seguros S/A

Yasuda Seguros S/A

Royal e Sunalliance Seguros (Brasil) S/A

Banestes Seguros S/A

Confiança Cia de Seguros

Conapp Cia Nacional de Seguros

Hsbc Seguros (Brasil) S/A

Aliança do Brasil

Capemisa Vida e Previdência

Seguradora Líder DPVAT

American Life

● Do not access the service

●

service

●

Central of Bonus

RNS Motor

● Access the

Chubb Seguros

Total of Insurance Companies

Allianz Seguros

Insurance Companies

Number of Services Used

●

DPVAT Tickets Paid

●

RENAVAM RENAVAM BIN - Robbery/ - BIN Theft Industrial

●

RENAVAMBIN - State

CESER – Insurance Companies that Used the Services in 2009

●

RENACH

●

SICON SNG

●

SNVA

●

Project Frontier SINIVEM

●

SCA Legal Patio

●

SCA Motor

●

Vehicles being Analyzed

●

RNS Personal Risks

●

RNS Property Risks

●

BDCOR

●

SINOB

●

ASCP

●

BDV

●

BDRF

Table 1

Central of Services – Services Available Services

Table 2

Available for Insurance Companies

Other Institutions

BDCOR

BDV

BDRF

BVS

BDSII

RENAVAM- BIN - State

RENAVAM - BIN - Industrial

RENAVAM - BIN - Robbery/ Theft

Central of Bonus

Services Developed Services Developed in 2009 in 2009

BIV

CESAC/CELISEG

DENATRAN DPVAT Tickets Paid

DPVAT Losses

Project Frontier - SINIVEM

RENACH

RNS Motor Risks

RNS Personal Risks

RNS Property Risks

SNVA

SCA Motor – Reimbursements

X X

SCA Legal Patio

SCPC /ACSP

SIAC

SICON

SINOB

BDCSV

SNG Consults

RNS Credit and Guarantee RNS Cargo Risks

X X

SIBLOQ

SIGIP

SILAG

SIPEP

SISCOR

Credit Analysis (SPC) – Commercial Association of São Paulo (ACSP) The agreement celebrated with ACSP allows Insurance Companies to consult the various databases of ACSP that provide record and credit information, especially: SPC - Individuals and Legal Entities; Use Check; Record Summary of Individuals and Legal Entities; Use Seg; Use Score; Use Phone and other for credit analysis of their potential clients. In 2009 the service was used regularly by three Insurance Companies. Number of Consultations made by the Insurance Companies in 2009: 107,259

Database of Insurance Brokers (BDCOR) Fenaseg celebrated agreement with Fenacor to make available the Brokers Database, aiming at satisfying SUSEP requirements, which determine the requirements for previous consultation to the brokers records for proposals acceptance and commissions payments. The system allows insurance companies to verify if the Insurance Brokers are regularly recorded and active, to obtain record information and copies of the record papers, with significant costs reduction in the documents management of brokers that operate with the Insurance Companies, through the following types of consults: • Consults for validating the broker record; • Consult for checking the broker papers (image of the papers): • Download of record data and papers existent in the database; • Consults of Acting, Suspended, Cancelled Brokers, or all the three options; • Consults of Brokers – Individuals or Legal Entity, or both; • Consults by Individual Taxpayer Identity Card (CPF) / National Register of Corporate Taxpayers (CNPJ); • Consults by key Word (part of name of the person or of the corporate name); • Consults by Federation Units (UF). 41,216 consults were made to BDCOR in 2009.

Database of Vehicles Insured that Suffered Losses of Unrecoverable Full Indemnity (BDSII) The Database of Vehicles Insured that Suffered Losses of Unrecoverable Full Indemnity contains the chassis and/or license numbers of vehicles insured and fully indemnified and unrecoverable, such data sent by the insurance companies to the RNS Motor Risks. The BDSII was created in fulfillment to a Conduct Adjustment Term celebrated on October 6th, 2003 with the Prosecution Office of the Distrito Federal and Territories, and with the Prosecution of Justice and Defense of the Customer Rights of the Distrito Federal. 413,575 consults were made to the BDSII in 2009

Central of Bonus Operating since July 2001, the Central of Bonus enables the automatic confirmation of bonus among the Insurance Companies and the improvement of the underwriting process of motor insurance proposals.The system acts quickly and safely, via internet and totally automated, exempting the use of documents in paper, and with effective protection mechanisms. The Central of Bonus carries out severe control of answers to the consults, with permanent exchange of information to solve the doubts of every situation. Twenty-five Insurance Companies that operate in the Motor Insurance are committed to the Central of Bonus, representing more than 98% of the amount of premiums of motor insurance, e by being highly reliable, some Insurance Companies make the bonus consultation prior to the policy issue. Central of Bonus also allows that the insurance company, through the consultations received, analyzes and monitors the locals or regions where it is getting or losing insurances, and for what other companies it is losing. Thus, it is possible to make an efficient management of its portfolio, new business and renewals.

In 2009 it were recorded 2,8 million of consults to the Central of Bonus, with a monthly average of 240,9 thousand consultations. Total of Consultations in 2009

2.891.386

Average Timing for Answering (hours)

Difference of Bonus (monthly average)

12,2%

Organisms of relevant strategic importance committed to the SINIVEM, amongst them: Ministry of Justice, represented by SENASP; Ministry of Cities, by DENATRAN; Federal Internal Revenue; Federal Highway Police; Federal Police; Highroad Department of Paraná.

DPVAT - Tickets Paid

Due to these conventions, the information of the SINIVEM are sent online to the INFOSEG database, managed by SENASP, enabling, together with bidirectional monitoring, to create a series of research filters and reports with the information existent within that database.

The insurance companies may access the DPVAT Insurance database – Tickets Paid through three ways: via GR4, via Quality and via Central of Services of Fenaseg.

SINIVEM, besides to identify digitally the vehicles license number, also identifies its model and color through the System of Identification of Vehicles Models (SIMOV).

It is possible to get information about payments of this insurance, identification of the vehicle (chassis and license number) and the owner (name and CPF/CNPJ).

SENASP may issue, upon request of the Insurance Company, “Certificate of Vehicle Transit”, that certifies the transit of the vehicle by one of the stations, indicating the direction, date and license number, with official signature. Such paper increases the rejections to pay the loss of robbery/theft.

Economy in 2009 (R$ thousand)

1.768,63

RNS Motor also makes automatic consults to DPVAT – Tickets Paid to validate the chassis of the vehicles. In 2009 were recorded 2,588,099 consultations.

Frontiers Project / SINIVEM The Frontiers Project is one of the most successful projects introduced by the Central of Services that enabled large integration of the Motor Insurance Companies with the authorities of Public Safety, especially with the Federal Highway Police. SINIVEM, an integrated system, is the operating tool of the Frontiers Project and is highly established in nine supervision locations, controlling the flow of the vehicles going to the international frontiers and also between the states of Rio de Janeiro and São Paulo, in the Presidente Dutra Highway. The system storages in the database of INFOSEG, located in the National Secretariat of Public Safety (SENASP), of the Ministry of Justice, the photos and data of the vehicle in transit, totalizing, in 2009, more than 31 million of records, and provides reports to the Insurance Companies.

In 2009 the Insurance Companies requested 262 Certificates of Vehicles in Transit, provided by SENASP. In 2009, the Insurance Companies obtained global savings in the amount of R$ 19.8 million.

System of Policies Consultation for Motor for Loss Recovery (SCA Motor Insurance Recovery) The system enables the registered companies to identify the motor Insurance Companies for the purposes to recover losses caused by third parties. SCA Motor Insurance Recovery aims at reducing the expenses of the Insurance Companies and making agile the processes of recovery of accidents involving third parties, in cases such third parties are insured of other Insurance Company. 33,971 consultations were made in 2009.

SCA – Legal Patio – Recovered Vehicles When adhering to the SCA system – Legal Patio, the Insurance Company authorizes the access, by the company operator of the Legal Patio Rio de Janeiro, and of other that may be established, to the database of Motor insurance policies. The purpose is to make agile the identification procedure of the vehicles taken to the Legal Patio, enabling the operator company to obtain the information of the vehicle and the Insurance Company, and send automatic notices on the vehicles taken to the Legal Patio. At the moment of the consultation, the Insurance Company is noticed by email about the vehicle taken to the Legal Patio and that this vehicle is available for it. Total of 11,609 consultations in 2009.

National Record of Drivers Licensed (RENACH) DENATRAN database that enables to check the status of the National Drivers License, complementing the risk evaluation of the assured and the information provided in the Risk Evaluation Questionnaire (QAR). Total of 118,346 consultations in 2009.

National Record of Motor Vehicles (RENAVAM) The following basis form part of the RENAVAM database, administrated by DENATRAN: National Index Base (BIN) – State: It presents all features of vehicle and information of the owner, and debts of fines and Vehicle Tax (IPVA) default. National Index Base (BIN) – Industrial: It presents all industrial features of the national and imported vehicles informed by the factories. National Index Base (BIN) - Robbery/Theft: It presents all Criminal Complaints of Robbery/ Theft, the notices of localization, recovery and return to the owner.

RENAVAM Consultations BIN State

1.114.664

BIN Industrial

4.079.825

BIN

1.347.812

RNS Motor makes automatic consultations to BIN – Industrial to validate the chassis of losses of full indemnity and to BIN Robbery/ Theft to validate the losses of robbery and theft and recoveries. DENATRAN databases are stored in the Federal Data Processing Service (SERPRO).

National Record of Losses (RNS) The National Record of Losses is currently composed by the following database: • RNS Motor Risks • RNS Personal Risks (life, personal accident and pension) • RNS Property Risks • RNS Cargo Risks • RNS Credit and Guarantees Risks RNS Motor counts on the commitment of 98% of the Insurance Companies that operate in the Motor branch. Their database in December 31st, 2008 accumulated 6.7 million of motor losses occurred in the last 7 years. Some Insurance Companies record the losses in real time, that is, at the moment they receive the Notice of Loss in the Call Center. Such procedure represents important benefits to the market, since it enables checking the coincidences of losses more promptly, as well as the frauds identification. The consultation to RNS Motor by CPF or CNPJ prior to the acceptance of the risk, enables assessing the number of losses of the prospective client, evaluating the risk. Similarly, the consultation is important for the purposes of losses adjustment and payment, and the verification of the losses coincidences in other Insurance Companies and in other branches of insurance.

RNS Motor / Number of Losses in 2009 Partial Loss

2.011.959

Full Indemnity Unrecoverable

88.237

Full Indemnity Recoverable

261.971

Robbery/Theft

648.251

No Indemnity

2.197.406

Third Parties

1.463.283

Legacy Total

106.885 6.777.992

RNS Personal aims at sharing the life, personal accident and private pension information sent by the Insurance Companies within the periodicity agreed of up to five days from the date of the notice of loss record. The information contained in the RNS database are crossed and arise coincidences that are informed to the Insurance Companies for checking. Monthly are sent to the Insurance Companies around 8,700 thousand automatic warnings of motor and life losses coincidences. This system enables also to access information in external database (as SICON and SINOB), making possible the consults, according pre established rules. In December 31st, 2009 RNS Personal counted on more than 128 thousand records enrolled by the Insurance Companies that are committed to the system. RNS Personal - Number of losses in 2009 Total Assureds

128.268

Beneficiaries

246.352

Brokers

714.438

RNS Property Risks was created to store the information about the property risks losses, aiming at enhancing the processes of prevention and identification of irregularities in the operations and includes the following branches of insurance: 111 – Traditional Fire; 112 – Fire – Simple Coverage (Cover Note Form); 113 – Glasses; 114 – Homeowners; 115 – Theft / Robbery; 116 – Comprehensive Condominium Coverage; 117 – Riots; 118 – Comprehensive

Business Coverage; 141 – Loss of Profits; 142 – Loss of Profits – Simple Coverage; 143 – Fidelity Bond; 167 – Engineering Risks; 171 – Miscellaneous Risks; 173 – Bankers Blanket Bond; 176 – Miscellaneous Risks – Combined Plans.

Automatic System of Circularization (SIAC) SIAC was created to complement the RNS, enabling consultation amongst Insurance Companies, promptly and without bureaucracy, about questionable losses and other information about insurance. SIAC does not require IT software or investment and its use is immediate, through internet and the access to the Fenaseg website. The Insurance Company makes the consultation on a certain subject matter, for one or more Insurance Companies, for a specific or for all branches of insurance. The system send the consultations automatically to the addressees that are registered, ask for the answers in the terms previously determined and, while there is no answer, it makes automatically the follow-up. Similarly, the system asks for the questioner, automatically, the result of the consultation.

Data Confirmation System (SICON) – CPF/CNPJ Fenaseg executed convention with the Federal Internal Revenue to confirm the CPF and CNPJ data, being possible to consult: • CPF – enrollment status, number confirmation, name related to the number, if resident in the country or abroad. • CNPJ – enrollment status, number confirmation, business name related to the number, fantasy name. SICON enables the insurance companies, 24 hours a day, to consult and to confirm through internet, at the time of contracting the insurance, the CNPJ or CPF data informed. The consultation to the system is elemental for the enrollment process of assureds, reducing the chances of fraud or inclusion of incorrect data. In 2009 were made 1,414,140 consultation to SICON.

National System of Deaths (SINOB)

the lien of the vehicle in DETRAN, simplifying and making agile all the process, besides to reduce operational costs.

SINOB, under management of the DATAPREV, aims at recording, processing and centralizing the national database of deaths, whose information are arising from the Registry Offices existing nationwide and that are obliged to communicate the deaths occurrence, in compliance with the Article 228 of the Law no. 8.213, dated July 4th, 1991. DATAPREV, upon agreement with Fenaseg, provides services of deaths identification related to the electronic files sent by the Insurance Companies and directed through the Compuletra. The deaths validated are those contained in the DATAPREV database upon processing and whose service is performed after sending the files by Fenaseg. Total of 40,949 consultations in 2009.

II – Convened Entities to the Central of Services SNG / SIRCOF The extent of the SNG/SIRCOF systems may be evaluated by the number of user companies and by the conventions with all the DETRANs of the country. The companies registered are distributed in the following segments: Companies

Number

Use (%)

Banks

211

2,38%

63%

Consórcios

375

4,23%

20%

Pools

0,73%

10%

Leasing

0,87%

Other Companies

8.141

91,79%

Total

8.869

100%

SNG and SIRCOF systems work in full synergy and produce the following benefits: • Financial institutions that finance vehicles: Record of Finance Contract simultaneously to

• DETRANS: Streamlining of services, since the costs of documents control and their filing are eliminated. Moreover, Fenaseg makes monthly donation to the DETRAN by liens included or contracts recorded, with the purpose of carrying out projects of traffic safety, staff training, body retrofitting and other activities, according to the rules of each state. • CNSeg/Fenaseg: The net result allows the costing of services and their activities, as well as projects of interest in the insurance market according to guidelines of the Board of Directors of CNSeg/Fenaseg.

SNG - National System of Liens The system was initiated in 1998, after Fenaseg has entered into agreements with the various representative associations of the financial sector: ABAC - Brazilian Association of Consortium Administrators, ABBC - Brazilian Association of Commercial and Multiple Banks, ABBI - Brazilian Association of International Banks, ABEL - Brazilian Association of Leasing Companies, ACREFI - National Association of Credit, Finance and Investment Institutions, ANEF - National Association of Financial Services and Consortium of the Automotive Industry, ANFAC - National Association of Factoring, and FEBRABAN - Brazilian Federation of Bank Associations, that finance vehicle, allowing that the SNG system were used by its affiliates and also by other companies recorded in DETRANS to perform the liens. SNG has established as a high safety and effectiveness system for its ability to prevent frauds in the records of liens related to the contracts of Fiduciary Sale, Leasing, Domain Reserve and Vehicle on Lien. Since the beginning of its establishment until now were made more than 52 million operations of lien inclusion and write off.

The safety and promptitude the SNG processes are performed give total credibility to the documents of vehicle ownership and enable that DETRANS reduce administrative costs and ample comfort to the owners. Consultations to the SNG by Insurance Companies Insurance Companies, which operate Motor branch, may access the SNG database when settling the losses to verify the existence of liens. In the year of 2009 were effected 712,509 thousand consultations to SNG.

Vehicles Financing Contracts Record System (SIRCOF)

the second phase will permit to the market, to perform studies and analysis, and it will be implemented in February of 2010.

DATASEG – Insurance Market Statistics System The objective of this system is to build a database for monitoring the numbers of the insurance market, capitalization companies, health and private pension

RNS Credit and Guarantee – National Record of Losses of Credit and Guarantee Branches It will work in an integrated and similar way to the branches already in operation.

SIRCOF is a system that allows data recording of vehicles financing contracts (fiduciary sale, leasing, domain reserve and vehicles on lien) by financial institutions, electronic and simultaneously to the inclusion of the lien in DETRAN, when licensing the vehicle.

RNS Cargo – National Record of Losses of Cargo Branch

This service is made available to the financial institutions by Fenaseg without any cost to the Insurance Companies and the funds generated enable the costing of programs, research, events and support of the institutional expenses of CNSeg and Federations.

Reinsurance Offers Control System (SISCOR)

SIRCOF operations started in September 2009 and the total of records in the year of 2009 was 337,581.

New Ongoing Projects or Implementation Integrated Base of Vehicles (BIV) This Project aims at creating a consolidated database of vehicles and will permit the generation of studies, management reports and complex analyses of profile. This Integrated Base will contain data from different sources as RNS Motor, BDV, BDRF, DPVAT, among other and its introduction will occurs in two phases. The first phase of this project was already introduced with the creation of the Portal of the Central of Services that enables the individual or integrated access to a set of database;

It will operate in the middle of 2010 and will work in an integrated and similar way to the branches already in operation.

This system aims at controlling the distribution of preferred reinsurance offers to the local Reinsurance Companies, allowing the identification of each offer sent. The offer identification will result in automatic monitoring and control of the offer receipt by the Reinsurance Company and the answer for the offer sent, within the legal deadline. It will serve as proof for SUSEP investigations.

Politically Exposed People System (SIPEP) The purpose of this project is to meet the SUSEP Circular no. 380 that substituted the SUSEP Circulars no. 341 and 327, whose purpose is to comply with the International agreement to combat the money laundering. This agreement imposed to legal entities of different economic and financial sectors larger responsibility to the identification of clients and maintenance of enrollments and records of all the operations, and in the communication of

questionable operations, also subjecting them to administrative penalties by the non-compliance with the obligations.

Lien Automatic Settlement System and Release of Fully Indemnified Vehicles (SILAG) The system will allow the information exchange between Insurance Companies and financial institutions, for knowledge of the balance due by the assureds in cases of full indemnity for collision, theft or robbery of funded vehicles.

Electronic Document Exchanging System (SIDE) Control system on transfers of technical reserves among Insurance Companies that operate private pension in cases of change requested by the participant.

Employees Record Data Verification System at the FGTS base (SIVCAD) Consult system to validate the status of employee/director in health, life and personal accident insurances.

Weather Forecast Monitoring System (INFOTEMPO) Provision of newsletters by CLIMATEMPO with information related to weather and climate forecasts, and climate monitoring to be used by Property, Rural, Motor and Cargo branches of insurance.

Telemarketing Calls Block System (SIBLOQ) System that will collect information of phone numbers whose owners have requested the block to receive telemarketing calls.

Database of Vehicular Safety Certificates (BDCSV) BDCSV aims at providing consultation on the Vehicular Safety Certificates issued, as set forth

in CONTRAN Resolution no. 185/2005 and regulated by DENATRAN by the Ordinance no. 30/2006. The Insurance Companies may access the databases and analyze changes in the vehicles, when underwriting or adjusting the loss.

Weather Stamp Certifier Authority (ACTEMPO) It is member of the Project of Digital Certification for the insurance marketâ&#x20AC;&#x2122;s documents, whose implementation will depend on the issue of new standards of SUSEP on Digital Certification.

Central of Insurance Policies and Contracts Securitization/ Central of Settlement of Insurance/Central for Insurance, Coinsurance and Reinsurance Settlement Operations (CESAC/ CELISEG) Project that analyzes the introduction, development and operation of a Central of Insurance Policies and Contracts Securitization (CESAC), and a Central of Insurance, Coinsurance and Reinsurance Operations Settlement (CELISEG) integrated to the National Financial System. This Central consists of a database containing information of insurance policies, pension plans and loan contracts over the surrender value, related to various types of insurance activities.

Intelligence and Management System for Administrative and Legal Processes (SIGIP) Database that will collect data on the administrative and legal processes of the market aiming at identifying similar situations, and that need coordinated actions by the Insurance Companies in order to prevent new cases, to amend clauses and to improve the image along to the assured.

Apprehension Vehicles System by Federal Internal Revenue (SAV-RF) tions, using web access, via internet. The Insurance Companies will be informed automatically about the insured vehicles arrested.

The system consists in a database of information about arresting vehicles by Federal Revenue of Brazil (RFB). The Federal Internal Revenue operator, duly certified, will record the arrest opera-

Statistics CNSeg â&#x20AC;&#x201C; Gross Income and Net Result 2009 x 2008 18.000 16.000 14.000

â&#x2013;˛%

Total

12.000

Gross Income 09

149.300

8.000

Net Result 09

142.796

6.000

Gross Income 08

36.713

Net Result 08

35.673

10.000

4,40%

2,92%

4.000 2.000 0 jan

feb

mar

apr may

jun

jul

aug sept oct

nov dec

Fenaseg/CNSeg Income Development 98% 100%

82% 80%

70%

69%

79%

76%

54%

60%

46%

40%

30% 24% 18%

20%

98%

91%

88%

21%

31%

12%

9% 2%

2000

2001

2002

2003

2004

Contributions

2005

2006

2007

2008

2009

Services

Central of Services – Net Results

R$ Million

40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Consortium for Insurance Market Regulation (CRMS) Consortium for Insurance Market Regulation (CRMS) was established by the Protocol signed on December 6th,1974, subscribed by the Superintendence of Private Insurance (SUSEP), Instituto de Resseguros do Brasil, currently IRB – Brasil Resseguros S/A and National Federation of Private Insurance and Capitalization Companies - Fenaseg, representing the insurance companies. Since its constitution and until July 6th, of 2000, CRMS was managed by IRB – Brasil Re.

From July 7th, 2000, Fenaseg assumed the management of the funds transferred by IRB – Brasil Re, being R$ 9,117,503.70 upon credit in bank account and R$ 10,274,922,39 in values receivable from Seguradora Mineira S/A. The financial funds received were duly invested in the financial market, in several banks, spreading any possible risks. On December 31st, 2009 the CRMS economic-financial status was the following: Type

RS million

The Executive Committee (COMEC) is the CRMS management body and is composed by representatives of Fenaseg, IRB – Brasil Re and SUSEP, as below:

Financial Investments

24,5

Values Receivable – Seguradora Mineira

19,3

Provision for Doubtful Debtors

(12,1)

• Horacio L.N. Cata Preta – Fenaseg • Silvio Soares da Cunha – IRB – Brasil Re • Alexandre Penner – SUSEP

Counselor Fees Payable

(0,60)

Total

31,1

According to CNSP Resolution no. 26, dated February 17th, 2000 and Minutes of Meeting of the Executive Committee of March 31st, 2000, Fenaseg was chosen as the new CRMS manager and of the funds arising from the FGGO, provided for in the Article 5 of the referred Resolution. Such funds are intended for meeting eventual expenses and maintenance of the Seguradora Mineira, whose controlling interest belongs to the CRMS.

There are not creditors, accounts payable delayed or pendent issues, except the lawsuit (no. 96.02.34742-2), in which Brasillider, former stockholder of the Seguradora Mineira, questions the transfer of controlling interest to the CRMS that was denied by the 3rd Panel of the TRF– 2nd Region, with the plaintiff appealed the decision. Judgment of the appeals at STJ and STF is expected, so that CRMS may take the appropriate actions for the process conclusion of the Seguradora Mineira at SUSEP and the definitive settlement of it.

Direction of Governmental Relationships (DIREG) Director: Antônio Mazurek The Director of Government Relationships, with registered office in Brasilia, has the Mission to represent CNSeg before the Federal, State and Municipal Public Authorities, under the following duties: • To monitor, daily, the process of propositions presented in the Legislative; • To coordinate the Projects Monitoring System (SISPROLEG); • To present amendments, suggestions and solutions to the authors and reporters of the material presented in the Chamber and Senate, and in the State Legislatures; • To attend the sessions of the Plenary and Technical Committees in the Legislative Branch; • To manage the record and the information updating regarding to matters of the insurance market interest; • To provide the sending and monitoring of processes at the Executive and Judiciary Branches; • To book hearings with Federal and State Authorities, as well those of the Distrito Federal; • To follow the President and Directors of CNSeg in their activities in Brasília; • To participate of hearings granted to CNSeg by authorities of the Executive, Legislative and Judiciary Branches; • To attend the written, spoken and televised media in Brasília, after previous release and orientation of the paths to be observed in each case. This acting path aims at providing uniformity and consistency to the Institutional positions of the Confederation. Major Actions • Hearings, personal contacts and those made by telephone with Federal and State Parliamentarians on matters in process and of the insurance market interest: nearly 400; • Official Letters: 59; • Opinions: 54; • Amendments: 17; • Requirements: 16;

• Miscellaneous (Separate Votes, Highlights, etc.): 27; • E-mails and several mails: 130.

Permanent Committee on Governmental Affairs (CPAG) In a coordinated way and working together and continuously, Permanent Committee on Governmental Affairs(CPAG), the Direction of Governmental Relationships of CNSeg and Legal Direction analyze, identify distortions, and suggest, through sending of opinions and amendments to the parliamentarians, amendments in the Bills, in the Proposals of Constitutional Amendments and the Provisional Measures; in the process of materials and other actions developed in the National Congress and State Legislatures. • 11 meetings held in 2009 • 186 projects discussed and analyzed.

SISPROLEG The Projects Monitoring System, coordinated by the Direction of Governmental Relationships, allows the record, feeding and monitoring of all the Bills of the market interest, offering subsidies and support to the works of Legal Direction and the Direction of Governmental Relationships, as well as the technical and strategic areas of CNSeg. On the other hand, SISPROLEG constitutes the database for the Permanent Committee on Governmental Affairs (CPAG), currently with nearly 900 projects recorded.

Bills and Provisional Measures The processing of the Bills, Constitutional Amendments, Provisional Measures and other actions developed in the National Congress and State Legislatures are analyzed by the Direction of Governmental Relationships of CNSeg and the Legal Direction, where, if required, is recommended the presentation of opinions and amendments to be sent to the parliamentarians pointing distortions and therefore suggesting amendments in the wording of the Bills.

Projects Monitoring 23%

Projects by Segment

14%

9% 8%

4% 3%

3% 2%

2% 1%

Health 210 DPVAT 86 Insurance 85 Motor 84

Consumer 75 Traffic Code 35 Labor Law 32 Civil Law 26

Tax Law 26 Financial System 21 Life 20 Criminal Law 19

Pension 19 Taxes 16 Personal Accident 14 Civil Liability 13

700

600

500

400

300

200

100

Chamber of Deputies

High

Federal Senate

Medium

State Legislatives

Low

Home/Housing 10 Consolidation of the Labor Laws 9 Other

Projects by Priority

Legislative Branches

Legal Consulting (COJUR) Salvador Cícero Velloso Pinto

Legal Advisory (ASJUR) Maria da Gloria Faria In 2009, ASJUR advised the directions, technical committees and working groups associated with CNSeg/Fenaseg, and also with Federations, as much preparing and analyzing contracts, as in the organization and attendance of meetings, working groups and committees. The Bills, the new and those in process in the Federal Senate, Chamber of Deputies, Legislative Chamber of the Distrito Federal and State Legislatives, were also monitored and worked by the COJUR/ASJUR, subsidizing the Direction of Governmental Affairs in Brasilia when dealing with each specific subject matter. The work developed by COJUR/ASJUR to monitor the Bills, the new or those in process, at the National Congress, State Legislatives and Chambers of the Distrito Federal, remain being provided also to the Seguradora Líder of the Consortiums for DPVAT Insurance.

Permanent Committee on Governmental Affairs (CPAG) The Permanent Committee on Governamental Affairs, coordinated by COJUR/ASJUR together with Director of Governamental Affairs in Brasília, is composed by CNSeg FenaSaúde, FenaPrevi, FenaCap, FenSeg and by SEGURADORA LÍDER and its purposes are the analysis, discussion and definition of institutional strategies for the monitoring of Bills of the insurance market interest. In 2009 were monitored 1,039 Bills, but 126 new Bills. The 10 meetings held by the Committee during the year discussed and analyzed 186 Bills.

Demands Once more it was observed a growth of demands in numbers, superior than those of

2008. 1,177 Letters, 867 Circulars and 1,005 Official Letters were issued, aiming at obtaining information related to the existence of insurance, loss, contracting rejection, etc. COJUR/ASJUR elaborated and/or analyzed 396 Contracts, monitored 1,039 Bills on the Federal and States areas; elaborated 52 opinions to found actions of the Direction of Governmental Affairs, in addition to other opinions for the other areas of CNSeg/Fenaseg and Federations.

Legal Report The Legal Report, produced by COJUS/ASJUR, is a monthly electronic edition with information of general interest for the insurance market, and through its links, for the affiliated Federations and DPVAT, containing sectorial legal information. The Legal Report is composed by an editorial on the common theme to the market and is divided into specific areas (Capitalization, DPVAT, Private Pension and Life, Supplementary Health and General Insurance) containing case law, consults solution, news, precedents and normatives recently published, of the market interest and of each Federation, besides information on the presentation, process and file of state and federal Bills. Matters that were in evidence in the country, such as the portability (edition 77/09); Legal Uncertainty (edition 78/09); Data Protection (edition 83/09); Olympiads of 2016 (edition 85/02) and the Human Rights (edition 86/09) were some of the themes of the Editorials of the Legal Report of 2009.

Events In 2009 CNSeg/Fenaseg through COJUR/ ASJUR, sponsored the Seminar on “Insurance Agreements and Consumer Protection in the Contemporary Society”, organized by AIDA and

the Superior School of the Bench, in the city of Porto Alegre from May 29th to 30th, 2009; the Congress “Summit on the Judiciary and the vital interests of the Brazilian nation – JUSTINA”, held by BESC Institute, from October 27th to 28th, 2009, at the Hotel Renaissance in São Paulo/SP; and “IV National Congress of the Chiefs of Federal Police”, held in Fortaleza, from November 3rd to 11th, 2009.

Coordinated Actions and Monitored by ASJUR/COJUR Among the actions of COJUR/ASJUR in 2009, deserve to be highlighted the monitoring, following and coordination of the Public Civil Actions on theft of credit card insurance and coordination and monitoring of the works that are being performed to deal with issues involving the motor insurance arising by virtue of the Parliamentary Commission of Inquiry opened in the State Legislative of São Paulo. Both issues should also extend throughout the year 2010. The Bill no. 3555/04 which seeks to establish the Insurance Code has remained the object of monitoring throughout the year 2009. Working Groups (WG) were even created to address specific issues, the Insurance System (Regulation of the Article 192), the Insurance of Workers’ Compensation (SAT) and the scope of the Law no. 12.007/09, which deals with the obligation to provide consumers with the declaration of the annual discharge of debts to the health plans providers, insurance companies, capitalization companies and private pension entities. The Forum of Consumer Relations, for permanent analysis and discussion of the Bills that deal with consumer relations, as well as the CPAG/MOTOR, created in the second half of 2009 due to the large volume of federal and state Bills, regarding to motor insurance, are also innovations of the year 2009. The involvement of technicians from specific areas resulted in agility for sending subsidies to COJUR/ASJUR to prepare of opinions, amendments and substitutes for the Bills.

In Health Insurance, ASJUR attended meetings on the Normative Resolutions of the Collective Plans and Benefits Administrators, monitored medical actions for fees adjustments in the states of Espírito Santo, Maranhão, and Distrito Federal, as well as in the Economic Law Department. ASJUR was present in the monitoring of lawsuits, especially on the Rate of Supplementary Health, readjustment for the elderly and enrollment in the Councils of Medicine and Odontology.

Irregular Exercise of the Insurance Activity Fenaseg, SINCOR and Fenacor continue acting together against the malpractice of entities that act offering and commercializing insurance products in various Federations Units, as they were Insurance Companies. Within this context, COJUR/ASJUR and the Direction of Protection to Insurance prepared and filed countless representations at SUSEP, requesting the investigation of irregularities and appropriate measures by the regulator and supervisor agency and hired specialized firm to prepare and to submit crime-news to the Federal Police because of the entities, associations and cooperatives that act in various Federation Units, and also to monitor Police Inquiries. This work resulted in the establishment of 11 Police Inquiries at the Federal Police Office in Minas Gerais, but two inquiries have already induced the proposition of criminal complaint by the Justice Department in that state.

Technical Committee – Legal Affairs President: Ricardo Bechara Santos Mentor: Salvador Cícero Velloso Pinto Committee on Legal Affairs Meetings

Number of Members

Number of Guests

Total of Attendants

176

Subject Matters Discussed

178

Council of Appeals of the National System of Private Insurance (CRSNSP) Holder: Maria da Glória Faria Deputy: Salvador Cícero Velloso Pinto COJUR/ASJUR is in charge of represent CNSeg/Fenaseg at the Council of Appeals of the National System of Private Insurance (CRSNSP). The Council aims at trying, in last

administrative instance, the appeals decisions of the Superintendence of Private Insurance (SUSEP). Sessions Held

Process Tried

500

Number of processes tried where the representative of Fenaseg/CNSeg was Reporter or Reviser

260

Number of Reports and Votes prepared during the year by representative of Fenaseg.

341

Direction of Management and Finances (DIAF) Director: Ronaldo Youle The year of 2009, despite the crisis prospects, was favorable for development and implementation of new services and technologies, with the purpose to be agile, safety and better serve the demands. DIAFI answers by the Administration and by the Financial and Accounting Management of: • Fenaseg/CNSeg; • FenSeg; FenaPrevi; FenaSaúde and FenaCap; • CRMS (Seguradora Mineira); • Trade Union of the Insurance Companies RJ/ES

• Implementation of VOIP system, aiming at improving the quality and economy of calls, especially the long distance calls; • Adoption of measures for rational use of the following materials: disposable consumables and durable goods, electrical power, and practices of waste containment; • Implementation of “Policy for Use of Technology Resources”

Computers and Automation

Managements

• Installation of fiber optic networks; • Replacement of PCs and servers; • Implementation of the Contingency Plan and purchase of security equipment in the area of information technology; • Scanning of the physical file of documents. Historical or mandatory documents, according to the law, have been kept on paper and stored out of the premises; • Scanning of all copies of the Revista de Seguros.

DIAFI is composed by the following managements:

Human Resources

The holder of the Direction of Management and Finances is currently answering as Vice-President of the Imobiliária Seguradoras Reunidas S/A, company of which Fenaseg is majority stockholder.

• Financial and Budget; • Administrative and Operational Support; • Information Technology and Communication.

Main Activities - Property/ Administration • Establishment of Security Cameras at Reception, at all the floors of the entity and in some collective environments; • Studies for establishment of the Safe Room of the servers;

• Training and Education Help in all the levels of education; • Conducting of motivational meetings to foment knowledge of the company and selfesteem of the employees; • Vaccinations against influenza and other diseases, like hepatitis, were offered to the employees; • Agreement with the Quinta D’Or Hospital for immediate acceptance of employees that need to be removed with emergency; • Access control and marking point for biometric scanning equipment. 86

Press Relations and Communication (ASCOM) Consultant: Geraldo Bolda Advisor: Ângela Cunha

Press Relations In recent years the insurance market has also developed as topic to the general public interest – for its function of protecting people and property and also for its ability to generate long term savings. This is reflected in the CNSeg relationship with the Press, which became more intense and frequent. The support to the Press became to be in a segmented way, based on the creation of the National Confederation of General Insurance Companies, Private Pension, Supplementary Health and Capitalization (CNSeg) and the four Federations - FenSeg, FenaPrevi, FenaSaúde and FenaCap. Thus, the average monthly calls to journalists in 2009 grew by 50% over the previous year, jumping from 420 to 600.

Revista de Seguros The oldest magazine of the sector in Brazil, Revista de Seguros, which began circulating in the 20s, is the official diffusion body of the insurance market. In its quarterly issues, the magazine addresses the most current issues related to insurance, reinsurance, private pension, supplementary health and capitalization, in materials and articles signed by specialized journalists, consultants and technicians of the sector. Periodically, Revista de Seguros goes through reformulation, in order to adjust it to be more efficient in its mission of corporate edition, being opened to deal with other economic and cultural issues, in order to approximate it to a growing number of readers.

In 2009, the main topics addressed by the edition, in its cover stories, have been the effects of the global economic crisis, the meeting of market leaders with President Lula, when was presented the new institutional structure and proposals to expand access to the insurance, Brazil’s economic stability amid the global crisis and partnership between the insurance market and the Government for the creation of the “green insurance” for the sake of environmental preservation. In that year were distributed over 20,000 copies of the four editions of a subscriber mail composed by insurance companies, international reinsurance companies, Executives of the market of insurance, private pension and capitalization, trade unions and industry representation, insurance brokers, university libraries, self-employed professionals bound to insurance activities, companies of other segments of the economy, authorities of the Executive, Legislative and Judicial Powers, governmental bodies, cultural institutions, journalists and advisories of many different specialties.

E-mail Seguros CNSeg also edits this publication, monthly or whenever required, of directed circulation, aiming at disseminating business information and breaking news. Distributed to more than 1,500 people, including managers, experts and other professionals of the market, “ E-mail Seguros” was expanded to cover the various levels of leaders of insurance, reinsurance and capitalization companies, pension and supplementary health entities of the sector.

Live Safe in Action The newest communication channel of CNSeg with the market completed three years in 2009. Every month the “Living Safe in Action” aims at maintaining the members of CNSeg, FenSeg, FenaPrevi, FenaSaúde and FenaCap, as well as the entities and other industry professionals informed about the major activities and actions developed by all fields of work of the Confederation and the Federations every month. Living Safe in Action was created in March 2006 under the name of “Fenaseg in Action”. But with the establishment of the four Federations, in March 2007, its name changed to “Living Safe in Action”, becoming the newsletter of the new system of institutional representation of the insurance market for general insurance, reinsurance, private pension, supplementary health and capitalization. Since then, Living Safe in Action is distributed in electronic version to an audience of more than 1,500 people.

Internet Released at the end of 2008, the Portal “Living Safe”, the new system address of institutional representation in the insurance market in the Internet, in addition of routine maintenance, was expanded with the opening of three new sections: interview (11 interviews published in 2009); Microinsurance and Ombudsman Service. The standardization of statistics on all segments of the market was another action, making the portal even more complete. In 2009 was produced and published an average of 1,500 notes on specific matters of the insurance market and also of general interest in the section ‘Living Safe Online’. In only one address, the user finds a huge range of information about the entities of the system, with fixed sections and others of periodic updating. Among those, it is possible to find the profile and messages from the Presidents of the entities, organization charts, composition of the councils and boards, “Publications” as the Social Balance Sheet of the insurance

activity, open private pension and capitalization in Brazil, Fenaseg/CNSeg Report, and the Guides published by the entity; “Presidency” - Profile of the holder of Fenaseg/CNSeg and their career, and articles written by him and published in the Press, “Central of Services” which includes 13 databases (such as SIAC, SNG, SISEG and FIPE Table); “Events” - of the Fenaseg/CNSeg and/or those where there is participation of its representatives, and also market events in general; “Market” - updated information on the National Insurance System, Microinsurance, Fenacor, Funenseg and companies that compose the sector; “Statistics” - Insurance, Open Pension Plans , Capitalization and Reinsurance. To access simply type: www. fenaseg.org.br.

Intranet CNSeg keeps, since 2001, the vehicle of interdepartamental communication through the intranet webpage. Since then, in addition to universalize and give immediacy to the dissemination of the most important facts of the administrative and working life of CNSeg, this page has provided space to divulge issues of social and cultural subjects, as well as to promote the improvement of communication between the personnel staff and the management, and to contribute for the enhancement of the quality of interpersonal relationships. In 2009, Internet divulged around 500 information.

Newspaper Mural Acting since 2005, this informative was created with as main target audience, the group of employees who does not deal with computer. The Mural Newspaper became an extension, summarized and appropriate language, of the Intranet. In 2009, were made more than 300 sheets with institutional breaking news and of general interest divulged on the Intranet. In these four years, the newspaper suffered graphics and editorial changes, in order to adjust more and more to the goal of providing the reader with short and precise information.

Advisory for Special Projects Advisor: Suzana Munhoz da Rocha

Major Actions Confederation Project The Advisory for Special Projects is responsible for coordinating the Confederation Project, sendings and performance of decisions. In October were held changes in the Bylaws of CNSeg and Fenaseg. In December were held elections of Board of Directors for the 4 Federations for 2010 - 2013 triennium, and began formal procedures to elect the Board of Directors and Fiscal Council of CNSeg and Fenaseg, that will occur on March 2010.

Secretariat of Meetings of the Board of Directors and Superior Council Elaborating agendas and minutes, monitoring and sending the subject matters. In the year of 2009 were held 12 meetings of the Board of Directors and 4 meetings of the Superior Council, being one extraordinary.

Participation in Councils and Working Groups • Council for Economic and Social Development (CDES) - Presidency of the Republic, Advisory to the Member João Elisio Ferraz de Campos; • Deliberative Council of the Workers’ Support Fund (CODEFAT); • Financial Education - Working Group constituted by SUSEP; • WG on Workers’ Compensation.

Working Group on Workers’ Compensation Insurance Studies on the Workers’ Compensation Insurance were held in the past from 2000 to 2004 considering the Constitutional Amendment no. 20 dated December 12th, 1998 which establishes in its Paragraph 10 of the Article 201 that “Law shall regulate the coverage of workers’ compensation risk, to be served concurrently 89

by the general regime of the social security and by the private sector.” Once the Superior Council of CNSeg elected the theme as one of the priorities to be discussed with the insurance market, the Working Group was reconstituted under the coordination of Mr. Oswaldo Mário de Azevedo (Sul América Cia. de Seguros), and counts on the participation of representatives of the following Insurance Companies: Bradesco Vida e Previdência, Bradesco Seguros, Mapfre Vera Cruz Seguradora, QBE Brasil Seguros, ACE Seguradora, Liberty Seguros, Metropolitan Life Sguros e Previdência Privada, Berkley Internacional de Seguros, Unimed Seguradora; Fenacor and FenaSaúde. The discussions on the Regulation of the Service Customer (SAT) were resumed, the effects of Decree no. 6957/09 that amends the Regulation of the Social Security regarding the implementation of the Accident Prevention Factor (FAP) are being analyzed, and the alternatives for referral of the subject matter to the other entities involved and to the competent authorities, are being determined.

Other Projects Viver Seguro TV In 2009 the project Living Safe TV was formatted TV, which consists in a series of twenty programs lasting 15 minutes each, about various themes of Insurance, Private Pension, Supplementary Health and Capitalization, to be broadcasted initially at TV Cultura, that is part of the pool of education networks in Brazil, and subsequently at other channels, open and closed, at educational and corporate TVs, schools, trade unions, etc. It will also be available as portals and websites, with the possibility of interactive action with the public and consumers. Its purpose is to provide information to the general public adopting a modern language with graphic animation, interviews with experts, live testimonials, narrative of cases. In all numbers there will be reference to the consumer rights and duties, and clarifications on the terminology used by the industry.

From the evaluation of the first stage, may be subsequently edited new programs deepening the themes already discussed or adding new themes, always with the intent to inform and to stimulate the search for the protection offered by the various types of insurance.

Social Responsibility The Advisory for Special Projects monitors the management of social project developed in Jacarepaguá, Cidade de Deus, one of the poorest areas of Rio de Janeiro, which is sponsored by CNSeg. The project comprises two units of the Foundation of Children and Adolescents (FIA), organism associated with the State Secretariat of Social Action: the nursery Maria Beraldo, and the Center for Integrated Activities Odylo Costa Neto.

Related Areas The Advisory for Special Projects oversees the actions of the Library and the sector of Events and Publications.

Luiz Mendonça Library Librarian in charge: Juscenira Oliveira Luiz Mendonça Library, founded in 1993, and whose name is perpetuated since 1998, at memory of one of the most dedicated professionals of the insurance market, works on the 9th floor of the Edifício das Seguradoras, at Rua Senador Dantas, no. 74. Its collection consists in approximately 24 thousand titles, which are consulted daily by market professionals, researchers and students. Amongst the works cataloged, books on insurance, related matters, technical manuals, yearbooks, a collection of laws of Brazil, national and international journals, reference works, rare books on the History of the Insurance and entertainment books of various literary genres. Luiz Mendonça Library is technically equipped to provide databases on insurance, Statistics System of SUSEP and Auto, makes available to users summaries of journals, online newsletter and alert service. Requests for publications that do not belong to the collection of CNSeg can be located through the exchange between libraries and documentation centers. Questions and consultations may be made by e-mail: biblioteca@cnseg.org.br.

Events and Publications Coordinator: Leila Pontes

Publications The sector is responsible for institutional publications, of which the most important is the Inform and Social Balance Sheet - Annual publication of the Brazilian Insurance Market. 2008 Report (Portuguese/English) had a circulation of 4,000 copies distributed to the market and specific mails to parliamentarians. The publication, a valuable source of historical documentation edited for ten years, collects information from Public and Private Institutional Entities, namely: SUSEP; ANS; Fenacor; ABER; ABECOR; Funenseg; CNSeg; 4 Associative Federations and State Trade Unions. It also includes human resources data, statistics of Insurance Market and Projections Book. The Social Balance Sheet deals with Social Projects and with Sustainability actions and combat to the waste. It is distributed to the Insurance Market and related entities, with translation into English. It is being prepared the 2nd edition of the book, “Do Retrato de Vargas à Carta de Brasilia”, on the history of Fenaseg, authored by Paulo Amador that will be published on April 2010.

Events Total of Events Held: 50 Comparative Analysis with the year of 2008 there was growth in the events demand about 13.63%; Participants in 2009: 5,537 persons. A 97% increase in the number of people served. Specific Demand by Area - 2009 Entity

Demand

CNSeg

CNSeg/Líder

FenaPrevi

FenSeg

CNSeg/FenaSaúde

Seguradora Líder

Main Events Held in 2009 Events

Date

Location

Request

Tribute to the President of the Reinsurance by the Opening of the Reinsurance Market

March 3rd

Brasília - DF

CNSeg / PRESI

ClimaTempo Lecture

March 25th

Insurance Companies Trade Union - SP

FenSeg

Insurance Businees Fundamentals and Advanced Analytics

March 31st

Insurance Companies Trade Union - SP

FenSeg

Consortiums Administrators (CONAC)

April 1st /3rd

Hotel Sofitel Guarujá - SP

CNSeg / DIP / sponsored by

IFRS

April 27th

Insurance Companies Trade Union - SP

FenaPrevi

Geneve Association Meeting

April 28th

Business Center

CNSeg / PRESI

Lord Mayor Visit – London Mayor

May 7th

CNSeg – Room A

CNSeg / PRESI

May 14th /16th

Le Canton - Teresópolis RJ

Seguradora Líder

May 20th August 6th

CNSeg Auditorium / Insurance Companies Trade Union - SP

CNSeg / DIRER

IT Detrans Meeting

May 25th

Hotel Excelsior

Seguradora Líder

RNS

May 27th June 18th June 24th

CNSeg Auditorium / Insurance Companies Trade Union - SP

CNSeg / DIPRO

June 24th/26th

Hotel Bourbon Cataratas

CNSeg / DIPRO / Seguradora Líder

July 7th

Hotel Guanabara

Seguradora Líder

July 9th /11th

Cargo Carrier Companies Trade Union - RS

Seguradora Líder

Fraud in the Claims Processes

August 6th

Insurance Companies Trade Union - SP

CNSeg / DIRER

National Meeting of Actuaries

August 12th /13th

Hotel Renaissance - SP

CNSeg / Funenseg

GRC Meeting 2009

August 13th /16th

Angra dos Reis - RJ

CNSeg / DIPRO

Microinsurance

August 18th /20th

CNSeg

CNSeg / DIRER

Workshop of Leaderships Seguradora Líder Fraud in the Claims Processes

AND Meeting (Detrans) II Legal Meeting II Meeting of Transit Safety of Mercosul

Strategic Planning

September 3rd

Jóquei Club Auditorium

Seguradora Líder

Seminar on Internal Controls

September 24th

Hotel Caesar Business - SP

CNSeg / Funenseg

September 23rd /25th

Hotel Windsor - RJ

CNSeg / DIPRO

September 25th

CNSeg Auditorium

CNSeg / Insurance Companies Trade Union

September 30th RJ October 1st SP

CNSeg Auditorium

Insurance Companies Trade Union PSPCNSeg / DIPRO

AND Meeting Signing of the Intents Protocol - Ministry of the Enviroment Workshop on Digital Certification V State Seminar on Traffic

October 2nd /4th

São José - SC

CNSeg / DIPRO

October 21st

Funenseg Auditorium

Seguradora Líder/FenaPrevi

IAIS Meeting

October 19th / 20th

Hotel Windsor RJ

CNSeg / PRESI

16th Annual Conference of IAIS

October 22nd / 24th

Hotel Windsor - RJ

CNSeg / PRESI Seguradora Líder

International Seminar: Solvency, Corporate Governance and Supplementary Health Accounting

October 26th / 27th

Hotel Windsor - RJ

CNSeg / FenaSaúde

Justina Summit

October 27th /28th

Hotel Renaissance - SP

CNSeg / PRESI

November 2nd

Hotel Caesar PalaceLas Vegas

CNSeg / PRESI

V Insurance IT Meeting

November 13th /15th

Hotel do Frade - Angra - RJ

CNSeg / DIPRO

VIII Symposium – Ethics on Relationships of the Health Sector

November 26th /29th

Eco ResortAngra dos Reis

FenaSaúde

November 30th

Funenseg Auditorium

CNSeg / DIRER

1st National Meeting of Insurance Doctors

Fides 2009

II Seminar on Ombudsman Service

Chapter IV

FenSeg General Insurance Segment

Good Expectations of the General Insurance The segment of insurance companies operating in General Insurance, which has as entity of national representation the National Federation of General Insurance (FenSeg), presented, in 2009, satisfactory performance with volume of premiums income in the amount of R$ 32.9 billion and growth of 10% over the previous year. Motor remained as the main portfolio of the segment, with premiums income of R$ 17.4 billion, representing 52.8% of the total segment, with growth of 13% in the year, followed by Property Insurance, whose premium income was R$ 6.5 billion, representing 19.7% of the segment. The premium income of DPVAT Insurance amounted to R$ 2.7 billion, remaining in third place, and 8.1% in the segment. In 2010 is expected the continuity of such growth, predicting it will be in the range between 10% and 12% with emphasis on the motor, civil liability, home/housing and rural portfolios. FenSeg remains waiting for creation of the popular motor insurance for used vehicles, subject to approval of the Bill that authorizes the use of used parts, duly certified, to repair the vehicles; using the referenced network of repair offices by the insurance companies, what would allow better control over budgets and quality of the services provided, and the exemption or reduction of Tax on Financial Transactions (IOF) on the motor insurance for older vehicles. In the other portfolios there are also expectations for regulatory improvements, especially as regards rural insurance, which is analyzing regulation of the fund to cover catastrophic risks. The prospects of the general insurance segment are promising, since it expects to maintain, in 2010, the successful trajectory of its 2009 operation.

Jayme Brasil Garfinkel President of FenSeg

FenSeg in 2009 The National Federation of General Insurance – FenSeg, entity of national representation of companies operating in the segment of damage insurance, in its third year of operation, prioritized the following subject matters: Popular Motor Insurance, Implementation of Operations in Scenery of Open Reinsurance, Adequacy of the Chart of

Accounts of the Insurance Companies due to the opening of the reinsurance, Home/Housing Insurance, Rural Insurance and Climate Changes. With registered office in Rio de Janeiro, FenSeg is composed by the following Board of Directors in 2009:

Board of Directors of FenSeg President Jayme Brasil Garfinkel

Porto Seguro Companhia de Seguros Gerais

Vice-Presidents Carlos Alberto de Figueiredo Trindade Filho

Sul América Companhia Nacional de Seguros

Pedro Purm Junior

Zurich Minas Brasil Seguradora

Directors Sidney Gonçalves Munhoz

Chubb do Brasil Companhia de Seguros

Arlindo da Conceição Simões Filho

Allianz Seguros

Antonio Eduardo M.F. Trindade

Itaú Seguros

Marivaldo Medeiros

Marítima Seguros

Luiz Felipe Smith de Vasconcellos

Tokio Marine Seguradora

Júlio César Alves de Oliveira

Brasilveículos Companhia de Seguros

Luis Emílio Maurette

Liberty Seguros

Mauro César Batista

Mapfre Vera Cruz Seguradora

Ricardo Saad Affonso

Bradesco Auto/RE Companhia de Seguros

Executive Director Neival Rodrigues Freitas

General Insurance Segment - 2008-2009 the total of the segment and income of R$ 17.4 billion; Property, with 19.7% of the total and income of R$ 6.5 billion, and DPVAT, with 8.1% of the total and income of R$ 2.7 billion. The branches that stood out in 2009, in respect of growth, were: Financial Risks (32%); Rural (30%); and Home/Housing (26%).

In 2009, the general insurance segment produced income of R$ 33.0 billion, an increase of 10.0% compared to the 2008 income, in the amount of R$ 30.0 billion. In the year, the production of the segment represented 30.2% of all the Brazilian insurance market against 31.5% of the total produced in 2008. In volume, the branches with more representativeness in 2009 were Motor, with 52.8% of Income – Insurance Premiums Segments / Groups Motor

Values in R$ thousand

2008

2009

% Variation 2009/2004

% Variation 2009/2008 12.98%

15.396.270

17.394.942

65.19%

Hull

502.558

553.143

18.82%

10.07%

Credit

502.777

426.765

10.14%

-15.12%

2.305.017

2.683.869

68.70%

16.44%

717.667

906.816

19.55%

26.36%

Property

6.357.311

6.500.774

82.45%

2.26%

Liabilities

611.414

658.404

63.08%

7.69%

Special Risks

208.527

236.783

46.58%

13.55%

Financial Risks

657.765

869.261

268.89%

32.15%

Rural

791.023

1.028.472

268.89%

30.02%

1.863.151

1.685.169

16.93%

-9.55%

General Insurance Segment

29.913.478

32.944.398

66.24%

10.13%

Insurance Market, Private Pension, Capitalization and Suplementary Health

95.076.109

109.252.735

82.98%

14.91%

DPVAT * Home/Housing

Cargo (Goods in Transit) Other

Source: SUSEP - SES 2009/12 Base and ANS

* DPVAT: From 2009, there was a change of accounting criteria, and the premiums have been reporting net of transfer to the SUS and DENATRAN (50% of

premiums). Thus, for purposes of comparison, this adjustment was made in the 2008 numbers. This same adjustment however was not made in the 2004 numbers.

As shown in the following table, the retained losses presented increases slightly above the earned premiums. Thereby, from 2008 to 2009

the retained losses increased 13.3% and the earned premiums, 12.1%.

Accumulated Data of the General Insurance Segment Accounts

2008

Values in R$ thousand

2009

%Variation 2009/2008

Insurance Premiums

29.913.478

32.944.398

10.1

Earned Premium

24.301.048

27.250.644

12.1

Net Loss

14.480.559

16.405.252

13.3

5.360.629

5.606.277

4.6

Acquisition Cost

Gross earned premiums = insurance premium – ceded coinsurance + accepted coinsurance; Earned premiums = net premium – variation of the Unearned Premiums Provisions (UPP); Net losses = insurance loss – ceded coinsurance loss + accepted coinsurance loss + consortium and funds – ceded reinsurance loss + restitution loss – salvage and recovered + IBNR variation; Loss ratio = net loss/earned premium; Administrative Expenses include Expenses with Taxes and Other (Incomes) and Operational Expenses.

The loss ratio in the general insurance segment in 2009 was 60%, registering balance if compared to the loss ratio of the previous year. Such balance was also verified in the segments of Motor, Property, Cargo and Hull, whose loss

ratio remained practically the same of the recent years. Even the year of 2009 was marked by an international crisis, the Credit segment experienced significant reduction in the loss ratio that reduced from 61% in 2008 to 47% in 2009.

Loss Ratio â&#x20AC;&#x201C; General Insurance Segments/Groups

% Variation 2009/2008 pp

2008

2009

Motor

66.2%

66.3%

0.0

Property

32.1%

33.3%

1.2

DPVAT

82.1%

86.9%

4.8

Cargo (Goods in transit)

61.2%

61.9%

0.8

Credit

61.4%

47.4%

-14.0

Home/Housing

34.2%

39.3%

5.1

Liabilities

44.7%

35.6%

-9.1

Hull

55.0%

54.7%

-0.3

Rural

35.3%

39.0%

3.7

Financial Risks

50.4%

37.2%

-13.2

Special Risks

21.6%

5.1%

-16.5

59.8%

60.2%

0.4

Other Total of General Insurance

Source: SUSEP

pp - percentage points

The acquisition costs in the segment of general insurance presented reduction of 1.5 percentage points as showed in the table below: Costs â&#x20AC;&#x201C; General Insurance Acquisition Costs pp - percentage points

2008

2009

% Variation - 2009/2008 pp

22.1%

20.6%

-1.6 Source: SUSEP

Portfolio Mix of the General Insurance Segment – 2009 Written Insurance Premium

Groups/Branches

Total Premium

Net Premium

Earned Premium

Motor

17.393.073

17.394.942

17.200.208

286.696

286.733

Liability – Interstate and International Land Transit Carrier

93.884

Extended Guarantee/Motor

Personal Accidents Coverage for Passengers of Land Motor Vehicles

Green Card Popular Motor Insurance Vehicles Liability – International Transit Carrier (Cargo)

Values in R$ thousand

Direct Loss

Net Loss

Acquisition Cost

15.954.805

11.048.590

10.571.471

3.150.438

66.26%

286.673

274.061

29.356

33.689

55.082

12.29%

93.884

42.987

43.896

40.351

16.556

8.379

37.72%

26.783

19.930

5.175

1.497

1.045

3.160

20.19%

2.566

2.586

1.231

0.00%

(11)

13.345.864

13.347.607

13.264.136

12.368.777

8.774.983

8.407.637

2.476.149

67.97%

7.540

7.554

5.663

5.265

4.158

2.614

1.070

49.64%

Loss Ratio

Facultative Motor Liability

3.629.739

3.629.814

3.578.253

3.255.045

2.198.245

2.109.931

605.378

64.82%

Property

6.401.374

6.500.774

4.678.707

4.484.369

2.282.228

1.491.865

1.970.979

33.27%

6.799

6.815

3.461

4.027

12.959

5.149

4.296

127.86%

1.035.325

1.031.020

993.253

929.602

273.060

314.551

302.776

33.84% 42.58%

Traditional Fire Policy Glasses Homeowner Theft/Robbery

21.220

21.470

15.242

18.545

8.492

7.896

4.411

168.913

168.912

120.205

120.328

89.305

72.911

41.690

60.59%

1.254.033

1.254.823

991.548

955.748

755.589

540.766

282.863

56.58%

Loss of Profits

4.974

4.976

1.286

1.061

6.451

1.871

272

176.27%

Fidelity Bonds

468.285

537.191

119.431

111.832

121.297

19.554

23.857

17.49%

1.088.736

1.087.677

978.671

903.357

292.473

211.026

435.339

23.36%

5.998

1.331

1.390

(16.927)

175

455

12.60%

Comprehensive Condominium Coverage Comprehensive Business Coverage

Engineering Risks Miscellaneous Risks Bankers Blanket Bond Miscellaneous Risks – Combined Plans Extension of Guarantee – Property

1.252.055

1.248.333

1.268.185

163.980

164.904

866.834

13.00%

Named and Operational Risks

1.095.038

1.133.558

205.946

170.294

575.551

153.061

8.185

89.88%

DPVAT

2.671.296

2.683.869

2.701.780

24.187

2.347.770

36.997

86.90%

DPVAT (All Categories) from Jan 05

2.671.296

2.683.868

2.701.702

(35)

2.334.719

36.326

86.42%

24.222

13.051

671

16862.63%

906.808

906.816

867.933

902.589

201.155

355.089

23.746

39.34%

(1)

906.808

906.816

867.933

902.589

201.155

355.089

23.747

39.34%

1.684.887

1.685.169

1.553.354

1.544.985

1.171.706

957.088

321.366

61.95%

National Cargo

548.085

547.994

512.955

493.029

387.443

326.133

93.476

66.15%

International Cargo

376.769

380.016

305.639

330.173

217.771

112.564

67.655

34.09%

137

116

6068.11%

Liability – International Transit Carrier (Cargo)

16.914

16.679

16.047

15.911

13.379

12.325

3.731

77.46%

Liability – Railways Transit Carrier (Cargo)

11.562

11.399

10.732

9.408

7.358

6.502

926

69.11%

DPVAT Run Off Home / Housing Home – SFH Home – Outside SFH Cargo (Goods in Transit)

Liability – Interstate and International Land Transit Carrier

Liability – Air Transit Carrier (Cargo)

18.085

18.006

17.710

17.278

9.320

8.443

4.083

48.86%

Liability – Land Transit Carrier (Cargo)

495.056

493.478

479.350

468.900

365.721

325.203

104.461

69.35%

Liability – Cargo Diversion

209.096

208.309

203.677

203.000

168.306

164.141

45.487

80.86%

9.318

9.287

7.243

7.285

2.270

1.661

1.528

22.80%

Ship Owner’s Liability Liability – Multimodal Transit Operator Financial Risks Financial Guarantee

871.290

869.261

308.907

259.514

205.890

96.666

(26.514)

37.25% -148.84%

6.688

6.675

443

2.418

(3.253)

(3.599)

(798)

Private Obligations Guarantee

260.016

202.291

50.793

47.733

43.757

8.791

(14.326)

18.42%

Public Obligations Guarantee

230.303

231.028

50.921

34.649

39.273

15.589

(25.662)

44.99%

Rental Guarantee

175.221

175.220

174.162

160.748

113.189

74.228

43.793

46.18%

77.682

132.710

11.668

8.768

499

(11.110)

5.69%

121.381

121.337

20.920

5.187

12.924

1.159

(18.409)

22.34%

Public Concessions Guarantee Legal Guarantee Guarantee

0.02% Source: SUSEP

Portfolio Mix of the General Insurance Segment – 2009 Groups/Branches Credit Export Credit – Commercial Risk

Written Insurance Premium

Total Premium

Net Premium

Earned Premium

Values in R$ thousand

Direct Loss

Net Loss

Acquisition Cost

Loss Ratio

426.765

321.891

389.420

384.677

184.697

28.780

47.43%

31.982

5.371

6.007

49.564

3.564

(7.853)

59.33%

Internal Credit

(4)

0.00%

Export Credit

213

114

(6)

(147)

-5.02% 48.97%

Export Credit – Political Risk Domestic Credit – Commercial Risk

260.324

191.670

226.674

250.864

110.995

27.370

Domestic Credit – Personal Risk

134.246

124.839

156.629

84.249

70.144

9.410

44.78%

Liabilities

660.777

658.404

359.612

358.091

184.337

127.660

62.854

35.65%

Directors and Officers Liability (D&O)

121.106

118.951

45.907

33.631

11.004

6.446

4.207

19.17%

General Liability

458.053

458.070

265.620

282.199

156.933

97.825

47.213

34.67%

81.618

81.383

48.085

42.261

16.401

23.390

11.434

55.34%

Special Risks

245.270

236.783

34.192

28.369

17.284

1.451

3.581

5.11%

Oil and Gas Risks

219.571

215.295

33.875

29.798

17.284

1.418

3.579

4.76%

8.441

0.00%

Professional Liability

Nuclear Risks Satellites

17.258

13.046

316

(1.430)

-2.25%

Hull

566.153

553.143

190.120

175.599

564.637

96.018

30.847

54.68%

Marine

213.285

212.990

132.986

117.143

252.833

67.256

20.758

57.41%

Aviation

346.387

333.673

53.206

54.567

310.341

28.224

9.380

51.72%

Hangarkeepers Liability

2.459

250

333

622

(194)

-58.09%

DPEM (Compulsory “no-fault” bodily injury insurance for boats’ owners)

4.022

3.678

3.555

841

730

624

20.54%

Rural

1.027.760

1.028.472

473.816

451.123

553.351

175.800

3.202

38.97%

Agricultural Insurance without FESR Coverage

197.913

12.505

9.430

180.287

5.648

(20.103)

59.89%

Agricultural Insurance with FESR Coverage

293.242

35.313

32.967

205.412

29.923

(51.815)

90.77%

Farming Insurance without FESR Coverage

1.842

834

948

1.279

282

29.71%

Farming Insurance with FESR Coverage

Aquiculture Insurance without FESR Coverage

Aquiculture Insurance with FESR Coverage

6.465

6.455

652

936

1.976

154

(491)

16.46%

Forest Insurance withFESR Coverage

(5)

(8)

(297)

(63)

(3)

841.43%

Insurance in respect of the Rural Product Coverage

(378)

-40130.97%

85.207

85.904

65.367

65.167

54.141

45.183

13.082

69.33%

Forest Insurance without FESR Coverage

Farming Building and Products Agricultural

Property and Goods on Lien – Private Financial Institutions

119.205

119.230

99.677

104.352

52.690

44.521

35.622

42.66%

Rural Property and Goods on Lien – Public Financial Institutions

197.225

136.213

129.252

33.558

24.156

(1.473)

18.69%

5.648

2.253

2.530

4.014

1.474

340

58.26%

121.007

105.549

20.238

24.901

27.990

23.59%

Other

(34)

(324)

Insurances Abroad

(39)

(329)

Branch Offices Abroad

32.855.452

32.944.398

28.672.608

27.250.644

16.638.010

16.405.252

5.606.277

Bloodstock and Livestock Comprehensive Forest Life Insurance of the Rural Producer

General Insurance Segment

60.20% Source: SUSEP

Motor Insurance billion. In the same period, the automotive industry increased the commercialization with 15.4% more new vehicles.

The Motor group presented, in 2009, premiums income of R$ 17.4 billion, accounting a 13.0% growth compared to 2008 income, of R$ 15.4 Motor

Values in R$ thousand

2008 Branch Personal Accidents Coverage for Passengers

Written Insurance Premium

2009 Percentage Share

Written Insurance Premium

Percentage Share

256.642

0,9%

286.733

0,9%

Liability – Land Transit Carrier

78.506

0,3%

93.884

0,3%

Extended Vehicle Guarantee

17.087

0,1%

26.783

0,1%

2.796

0,0%

2.566

0,0%

11.942.675

39,9%

13.347.607

40,5%

7.915

0,0%

7.554

0,0%

Green Card Popular Motor Insurance Vehicles Liability – Intermodal Transit Carrier Facultative Motor Liability Total

3.090.648

10,3%

3.629.814

11,0%

15.396.270

51,5%

17.394.942

52,8% Source: SUSEP

Property Insurance The property group registered, in 2009, growth of 2%, with income of R$ 6.5 billion against R$ 6.4 billion, in 2008. Property

Values in R$ thousand

2008 Branch Traditional Fire Policy

Written Insurance Premium

2009 Percentage Share

Written Insurance Premium

Percentage Share

9.536

0,0%

6.815

0,0%

927.080

3,1%

1.031.020

3,1%

29.726

0,1%

21.470

0,1%

151.710

0,5%

168.912

0,5%

1.202.885

4,0%

1.254.823

3,8%

14.583

0,0%

4.976

0,0%

395.982

1,3%

537.191

1,6%

1.036.214

3,5%

1.087.677

3,3%

6.625

0,0%

5.998

0,0%

Extension of Guarantee – Property

1.530.439

5,1%

1.248.333

3,8%

Named and Operational Risks

1.052.531

3,5%

1.133.558

3,4%

Total

6.357.311

21,3%

6.500.774

19,7%

Glasses Homeowners Theft / Robbery Comprehensive Condominium Comprehensive Business Coverage Loss of Profits Fidelity Engineering Risks Miscellaneous Risks Bankers Blanket Bond Miscellaneous Risks – Combined Plans

Source: SUSEP

DPVAT Insurance In 2009, the income of DPVAT conventions, that include all the vehicles categories â&#x20AC;&#x201C; cars, motorcycles, taxis, public transportation vehicles, trucks, vans, soil moving machinery and mobile equipment in general (if licensed), was R$ 2.7 billion. Such amount represented growth of 16.4% against the 2008 income, of R$ 2.3 billion, duly adjusted.

Government: 45% to the National Health Fund, of the Ministry of Health, as set forth in the Law no. 8.212/1991, amended by the Law no. 9.503/1997, in order to finance the medicalhospital care to the victims of traffic accidents, and 5% to the DENATRAN, of the Ministry of the Cities, as set forth in the Law no. 9.503/1997, in order to finance the accidents prevention and traffic education campaigns.

From this total of DPVAT Insurance, 50% are immediately transferred to the Federal DPVAT

Values in R$ thousand

2008 Branch DPVAT (All Categories) from Jan 05

Written Insurance Premium

Percentage Share

Written Insurance Premium

Percentage Share

2.305.017

7,7%

2.683.868

8,1%

0,0%

2.305.017

7,7%

2.683.868

DPVAT Run Off Total

2009

8,1% Source: SUSEP

Cargo Insurance The income premiums of the International Cargo, in 2009, was R$ 380 million, presenting a reduction of 28% in the year.

In 2009, the income premiums of the Cargo group was R$ 1.7 billion, and 32.5% of this sum, that means, R$ 548 million refer to the National Cargo. Cargo

Values in R$ thousand

2008 Branch

Written Insurance Premium

2009 Percentage Share

Written Insurance Premium

Percentage Share

National Cargo

530.878

1,8%

547.994

1,7%

International Cargo

527.757

1,8%

380.016

1,2%

-161

0,0%

18.590

0,1%

16.679

0,1%

Liability- Interstate and International Land Transit Carrier Liability- International Transit Carrier (Cargo) Liability- Railways Transit Carrier (Cargo)

8.461

0,0%

11.399

0,0%

16.295

0,1%

18.006

0,1%

Liability- Land Transit Carrier (Cargo)

515.727

1,7%

493.478

1,5%

Liability- Cargo Diversion

236.134

0,8%

208.309

0,6%

9.470

0,0%

9.287

0,0%

1.863.151

6,2%

1.685.169

Liability- Air Transit Carrier (Cargo)

Ship Ownersâ&#x20AC;&#x2122; Liability Liability- Multimodal Transit Operator Total

5,1% Source: SUSEP

100

Premium Income by Federation Units and Branches of Insurance – 2009 The main Federation Unit in premiums of general insurance was São Paulo, with income of R$ 15 billion, that presented a slight growth of 0.78 percentage points in its participations in the total of premiums, that dropped from 44.9% to 45.7% in 2008. According to the following charts, it can be said that within the general insurance segment, Motor was the branch that reached larger representativeness in all the states of the country, with 51.1% in Brazil as a whole. In second place, is the Property group, position in almost all the Brazilian states, with 19.1% of representativeness in the Country.

Federation Units São Paulo Rio de Janeiro Minas Gerais Paraná Rio Grande do Sul Santa Catarina Brasília Bahia Goiás Pernambuco Ceará Espírito Santo Mato Grosso Mato Grosso do Sul Pará Rio Grande do Norte Maranhão Amazonas Paraíba Alagoas Piauí Rondônia Sergipe Tocantins Acre Roraima Amapá Insurance Premiums

2008 44.89 10.69 7.45 6.70 6.48 4.01 3.28 2.37 2.52 2.29 1.40 1.27 1.13 0.91 0.86 0.57 0.53 0.55 0.40 0.34 0.36 0.34 0.26 0.21 0.07 0.05 0.06 29.913.478

2009 45.67 10.96 7.44 6.48 6.31 3.97 3.23 2.50 2.24 2.22 1.42 1.16 1.02 0.90 0.86 0.56 0.50 0.48 0.42 0.35 0.34 0.32 0.27 0.21 0.10 0.04 0.04 32.944.398 Source: SUSEP

Motor

51,1%

Property

19,1%

DPVAT

11,1% 4,9%

Cargo

3,0%

Rural Home/Housing

2,7%

Financial Risks

2,5%

Liabilities

1,9%

Hull

1,6%

Credit

1,3%

Special Risks

0,7%

Other 0,0% Source: SUSEP

101

Motor

46,1%

Property

21,2%

DPVAT

8,8% 2,7%

Cargo Rural

0,1%

Home/Housing

3,1%

Financial Risks

3,5%

Liabilities

3,2%

Hull

5,6%

Credit

1,4% 4,3%

Special Risks Other 0,0%

Source: SUSEP

Motor

46,9%

Property

25,4%

DPVAT

8,1% 6,1%

Cargo Rural

1,2%

Home/Housing

2,6%

Financial Risks

3,5%

Liabilities

2,7%

Hull

1,5%

Credit

1,4%

Special Risks

0,5%

Other 0,0% Source: SUSEP

Motor

50,9% 13,7%

Property

12,8%

DPVAT 7,4%

Cargo

10,1%

Rural 2,5%

Home/Housing Financial Risks

1,2%

Liabilities

1,0%

Hull

0,2%

Credit

0,3%

Special Risks 0,0% Other 0,0% Source: SUSEP

102

53,6%

Motor 10,8%

Property

20,9%

DPVAT Cargo

3,7%

Rural

3,4%

Home/Housing

3,3%

Financial Risks

2,4%

Liabilities

1,1%

Hull

0,9%

Credit 0,0% Special Risks 0,0% Other 0,0% Source: SUSEP

Motor

57,3% 13,2%

Property 9,9%

DPVAT 3,7%

Cargo

9,7%

Rural 2,3%

Home/Housing Financial Risks

1,6%

Liabilities

1,5%

Hull

0,6%

Credit

0,3%

Special Risks 0,0% Other 0,0% Source: SUSEP

65,7%

Motor 12,3%

Property

9,8%

DPVAT Cargo

1,6% 3,4%

Rural

3,2%

Home/Housing Financial Risks

2,2%

Liabilities

0,7%

Hull

0,9%

Credit 0,0% Special Risks

0,2%

Other 0,0% Source: SUSEP

103

57,4%

Motor 12,2%

Property

15,9%

DPVAT Cargo

1,3% 10,7%

Rural 1,7%

Home/Housing Financial Risks

0,4%

Liabilities

0,2%

Hull

0,2%

Credit 0,0% Special Risks 0,0% Other 0,0% Source: SUSEP

Motor

59,3%

Property

13,1%

DPVAT

14,2% 4,3%

Cargo

5,1%

Rural Home/Housing

1,8%

Financial Risks

0,6%

Liabilities

0,7%

Hull

0,7%

Credit 0,0% Special Risks 0,0% Other 0,0% Source: SUSEP

Motor

61,4%

Property

11,7%

DPVAT

7,5%

Cargo

0,3%

Rural

-0,1%

Home/Housing Financial Risks Liabilities Hull

3,7% 1,4% 0,3% 1,6%

Credit

12,3%

Special Risks 0,0% Other 0,0% Source: SUSEP

104

Motor

51,6%

Property

11,3%

DPVAT

16,0% 16,9%

Cargo Rural

0,3%

Home/Housing

1,6%

Financial Risks

0,8%

Liabilities

0,6%

Hull

0,9%

Credit 0,0% Special Risks 0,0% Other 0,0% Source: SUSEP

Technical Committees of FenSeg The technical committees, composed by professionals of insurance companies, are specialized advisory bodies of the insurance companies at the FenSeg that have the following duties: to evaluate the impact of published regulations, proposing procedures recommendations; to assess material and to develop technical studies in the various branches of insurance; to answer queries made by the insurance companies and other entities; to submit to the Board of Directors actions that meet the interests of the market; to hold seminars/workshops about subject matters of interest of the insurance companies’ professionals, assureds and regulatory agencies; to evaluate the need to carry out training and qualification programs of professionals in different sectors of insurance; to appoint representatives to attend events and meetings on relevant topics pursuant to their scope of action. In addition to their presidents, the technical committees of FenSeg are composed by mentors, who accompany the contents discussed during the meetings, and they may, in some cases, transfer such contents to the Board of Commitee Name General Civil Liability Property Risks Motor Insurance Credit and Gurarantee Insurance Home/Housing Insurance Rural Insurance Cargo Insurance

105

Meetings 7 10 12 4 6 1 11

Directors of FenSeg for decision making. The regulation of its Technical Committees provides, among other requirements, that: • The committees shall have maximum of 15 permanent members; • Both, presidents of the committees and their members, shall be elected for a three-year term, as well as occurs at the Board of Directors of FenSeg, with possibility to be extended; • It shall become impeded and therefore shall be out of the Board of Directors, the member that miss more than 3 consecutive meetings or half of the meetings held over a period of 12 months; the meetings of the committees shall be held, ordinarily, unless special situations, at least once every quarter and, extraordinarily, if convened by its president, by the Board of Directors of FenSeg or upon request of the members. In 2009, as shown below, were held at FenSeg 51 meetings in 7 committees, which discussed and analyzed about 100 subject matters of importance. Members 15 15 15 14 15 7 15

Guests 2 2 4 0 6 2 1

Participants 17 17 19 14 21 9 16

Topics 8 18 40 6 12 6 18

Technical Committees Committee on General Civil Liability President: Luiz Macoto Sakamoto, Yasuda Seguros; Mentor: Ney Ferraz Dias, Unibanco Seguros S.A. Committee on Property Risks President: Adelson Almeida Cunha, Zurich Minas Brasil Seguradora; Mentor: Mauro César Batista, Mapfre Vera Cruz Seguradora S/A. Committee on Motor Insurance President: Luiz Alberto Pomarole, Porto Seguro Companhia de Seguros Gerais; Mentor: Ricardo Saad Affonso, Bradesco Auto/RE Companhia de Seguros Committee on Credit and Guarantee Insurance President: João Gilberto Possiede, J. Malucelli Seguradora S/A. Commitee on Home/Housing Insurance President: Armando Petrillo Grasso, Bradesco Auto/RE Companhia de Seguros; Mentor: Carlos Alberto de Figueiredo Trindade Filho, Sul América Companhia Nacional de Seguros. Committee on Rural Insurance President: Wady José Mourão Cury, Companhia de Seguros Aliança do Brasil; Mentor: Jayme Brasil Garfinkel, Porto Seguro Companhia de Seguros Gerais Committee on Cargo Insurance President: Jair Carvalheira, Tokio Marine Brasil Seguradora S.A.; Mentor: Arlindo da Conceição Simões Filho, Allianz Seguros S.A.

Subcommittees Subcommittee of the Central of Bonus It is subordinate to the Committee on Motor Insurance. Coordinator: Marcelo Ordonez Rezende, Allianz Seguros S/A.

Subcommittee on Claims It is subordinate to the Committee on Motor Insurance. Coordinator: Abelardo de Queiroz Guimarães Filho, Bradesco Auto/RE Companhia de Seguros. Subcommittee on D&O – Directors and Officers It is subordinate to the Committee on General Civil Liability. Coordinator: Leandro Martinez, Chubb do Brasil Cia. de Seguros.

Working Groups WG – Aviation Insurance Carlos Eduardo Polizio, Mapfre Vera Cruz Seguradora S/A. WG – Management of Cargo Risks It is subordinate to the Committee on Cargo – Coordinators: Fernando Pacheco, Generali Brasil Seguros e Daniel Koji Kobayashi, Yasuda Seguros.

Chambers, Commissions, Councils and Committees Fenseg attendance at chambers, commissions, councils, committees and working groups of other entities. National Council of Traffic Road – CONTRAN – Issues related to Vehicles: Holder: Adhemar Fujii; Deputy: Neival Rodrigues Freitas, FenSeg. Thematic Chamber on Legal Effort Holder: Leonardo Girão, CNSeg Deputy: Márcio Alexandre Malfatti, Liberty Seguros S.A. CNSeg – Board of Directors of the Central of Services Assizio Aparecido de Oliveira, Mapfre Vera Cruz Seguradora; Oswaldo Mário Pego de Amorim Azevedo, Sul América Companhia

106

Nacional de Seguros; Eduardo Nunes, Generali do Brasil Cia. Nacional de Seguros; Reinaldo D’Errico, Liberty Seguros.

Technical Studies and Research Actions developed, particularly under the Technical Committees, began to show positive result on the actions taken, with the following highlights: Institute of Economic Research (FIPE) – Table of Vehicle Market Value FenSeg and FIPE keep convention since 2000, whereby the Institute elaborates, monthly, table with average values of automotive vehicles and the permission of electronic use by the insurance market and other related segments. Center for Road Experimentation and Safety (CESVI) – Vehicle Identification Number (VIN)/Body/Recall Fenseg, in partnership with CESVI Brasil, made available the VIN/Body/Recall Program to the Affiliate Insurance Companies, which has the purpose the decoding of the information contained in the automotive vehicles bodies.

Lectures Lecture ClimaTempo – Mapping and Monitoring for Insurance Companies Held in March 25th of 2009, at the Auditorium of the São Paulo Insurance Companies’ Trade Union, the lecture had the purpose to help the insurance companies to decisions making on the risk analysis and insurance price, considering studies developed about climate events. The lecture was delivered by Mrs. Patrícia Diehl Madeira, Master in Atmospheric Science and Meteorologist Forecaster of the ClimaTempo. ISO Lecture – Insurance Services Office Held in March 31st of 2009, at the Auditorium of the São Paulo Insurance Companies’ Trade Union, the lecture had the purpose to transfer information on the ISO international action, regarding the activity of Risks Management. ISO Speakers: Carole J. Banfield, Executive Vice President; Alexandra Altieri, Product Development Manager and Aimee Siliato, Assistant Vice President.

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Lecture on the Rotterdam Rules and their Impacts on International Cargo Insurance Held in September 1st of 2009, at the Auditorium of the São Paulo Insurance Companies’ Trade Union, the lecture had the purpose to divulge the new rules and to extend the debates about the theme in the scope of the Insurance Market. As speaker, Dr. Paulo Henrique Cremoneze, from Machado, Cremoneze, Lima e Gotas Advogados Associados’ office (MCLG). Lecture on Armored Disposal Held in October 29th of 2009, at the Auditorium of the São Paulo Insurance Companies’ Trade Union, the lecture had the purpose to present studies about armored disposal developed by CESVI

International Entities IUMI – International Union of Marine Insurance The filiation of FenSeg to IUMI aims at facilitating the information exchange between its associates and the international insurers and reinsurers and, even, propitiating the cooperation with bodies and entities directed to maritime activity. IMIA – International Association of Engineering Insurers By proposal of the committee on property risks, FenSeg, since 2008, joined to IMIA, which is a forum to promote knowledge and best practices at the engineering insurance sector.

Safe Patios The Board of Directors of FenSeg, in order to avoid difficulties in the implementation of safe patios, kept a series of measures to be observed before the creation of new patios. Among them we may highlight the following: • the definition, by the Committee on Motor, of the economical and financial parameters of viability of the patio; • the cession by the State of local of its operation; • denouncement clause of the convention among State, Trade Union and FenSeg, in case the state authorities do not send the recovered vehicles to the patio.

Irregular Exercise of the Insurance Company Activity Deserves to be highlighted the monitoring, jointly with the Direction of Protection to Insurance (DISEG), of CNSeg, the required actions to stop the activities of cooperatives and associations, which has been illegally operating as insurance companies.

CONTRAN Resolution no. 297/08 Upon participation of FenSeg , the Thematic Chamber of Issues Related to Vehicles (CTVA) approved the CONTRAN Resolution no. 297/08 that establishes criteria for classification – of small, medium and large amount – for the damages resulting from accidents with vehicles, motorcycles buses and trucks. The resolution, currently, is being reevaluated by CONTRAN. Based on the provisions of the Resolution, FenSeg made available to the market, to adopt uniform procedures for definition of full indemnities resulting from damages, software with the classification criteria.

Bill no. 345/07 In December of 2008 was terminatively approved at the Commission of Constitution and Justice and Citizenship of Deputy Chamber, Bill 345/07. It was approved with amendments, reason why returned to the senate for amendments analysis. The Bill, after converted into law, will allow the use of used parts, with proved origin, in the development of popular insurance for used vehicles.

Brasil sem Chamas Program FenSeg was invited to participate of the Brasil sem Chamas Program, through its Committee on Property Risks. The Program

consists in study deeply the area of safety against fire, nationwide, that counts on the participation of the Ministry of Science and Technology and it is being coordinated by the Technological Research Institute (IPT) of the Sao Paulo State. Besides other studies, the program intends to analyze, more deeply, the insurer environment, in view of its importance and consequent impacts of its actions and regulations to improve the area of safety against fire. This way, it can be highlighted two facts of extreme relevance, which are: a) the deregulation of the insurance market through SUSEP Circular 321/06, that cancelled SUSEP Circular 006/92, which established the technical requirements for the protection against fire, and PRESI Circular – 052/77 of IRB-Brasil Re, which established requirements for the cities classification; b) The end of the exclusiveness of the reinsurance, by IRB – Brasil Re, in 2008.

Catastrophe Fund It is pending at the Deputy Chamber the Complementary Bill 374/08 that creates the Catastrophe Fund. Its approval will be a new milestone for the growth of the rural insurance in the country.

Forum of the Technical Committees With the objective to make public the technical subject matters dealt with at its Technical Committee, FenSeg is making available in its website, the Forum of the Technical Committees. Primarily, the project is serving only the Committee on General Civil Liability, but in 2010, it will serve the further Committees.

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Chapter V

FenaSaĂşde The Supplementary Health Segment

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A Year of Changes Two thousand and nine was a year of profound changes in the supplementary health sector. Facing the financial crisis that hit the economy, the supplementary health felt reflections upon the loss ratios increase caused by the behavior of moral hazard of the consumers that increased the before the possibility to lose the job. Nevertheless, it was also the year that the H1N1 flu spread across the country, which certainly also contributed to the loss ratio increase. Besides the external effects to the sector, some public policies adopted also impacted the market structure. It was the year that began the portability in the new individual plans, it was created the collateral fund for the supplementary health and the contracting rules of collective plans were changed. Also this year, the National Agency for Supplementary Health (ANS) has identified the new list of mandatory coverages, whose term begins in 2010. New diagnostic technologies were incorporated, the limits for consultations with health practitioners expanded, and new coverage both for medical and odontological industries created. Procedures for family planning also became to be part of the list, as well as were modified the rules for the reimbursement to the Single Health System (SUS) and changed the main rules for financial guarantees of the industry with significant impacts being expected for 2010. Facing this pro-cyclical regulatory scenario, with ANS intensifying its action in a time of the loss ratio raising, significant mergers and acquisitions occurred signaling the increasing importance of scale for a technically efficient operation. Even so, the sector grew by 4.26% in number of beneficiaries and, in terms of income, approximately 10% if compared to the same period of the last year. This robust growth in a turbulent year makes us even more optimistic in the future with the recuperation of the growth of the Brazilian economy in 2010. FenaSaĂşde monitored and interacted strongly with ANS, state and federal legislators and the Judiciary, seeking to influence the regulation of the sector, defending our legitimate interests and contributing effectively to the improvement of the relevant legislation. We have tried, throughout all this year, to continue the major project of this Federation, which is summarized in the stability of the rules and to find the balance that makes viable healthy companies and better quality of medical care to our beneficiaries. We expect in 2010 to advance in this direction.

Geraldo Rocha Mello President of FenaSaĂşde

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Bord of Directors of FenaSaúde until November 2009 President Geraldo Rocha Mello

Medial Saúde S/A

Vice-Presidents Edson de Godoy Bueno

Grupo Amil

Gabriel Portella Fagundes Filho

Grupo Sul América

Heráclito Gomes de Brito Júnior

Grupo Bradesco

Paulo Sérgio Barros Barbanti

Grupo Intermédica

Directors André do Amaral Coutinho

Omint Serviços de Saúde Ltda

Dalmo Claro de Oliveira

Unimed Seguros Saúde S/A

Edson Machado Monteiro

Brasilsaúde Companhia de Seguros

Eduardo Ribeiro do Vale Vidigal

Marítima Saúde Seguros S/A

João Carlos Gonçalves Regado

Golden Cross Assistência Internacional de Saúde

Luiz Fernando Butori Reis Santos

Itaú-Unibanco

Newton José Eugênio Pizzotti

Porto Seguro - Seguro Saúde S/A

Paulo Miguel Marraccini

Allianz Saúde S/A

Samir José Kalil

Medial Saúde S/A

Executive Director Solange Beatriz Palheiro Mendes

Insurance Companies Specialized in Health With the approval of the Law no. 9.656/98, which regulated the Supplementary Health sector in Brazil and also created the Council on Supplementary Health (CONSU), and the Law no. 9.961/00, which created ANS, made it necessary to match operations of health insurance to the private health care plans, in order to adapt these operations to the legal requirements. The Law no. 10.185, dated February 12th, 2001, classified the health insurance as private health care plan, and the insurance company specialized in health as provider of health care plan, for purposes of the Law no. 9.656/1998. To the insurance companies, which in 2001 had been already operating health insurance, it was ordered that they would provide the expertise no later than July 1st, 2001, when they began to be regulated by CONSU and ANS. With the advent of the Colegiate Direction Resolution (RDC) no. 65/2001, ANS regulated

the segment, enforcing, where applicable, to the insurance companies specialized in health, the set forth in the standards of the Superintendence of Private Insurance (SUSEP) and the National Council of Private Insurance (CNSP), published by December, 21st, 2000, which matters have not been regulated by ANS and CONSU. In 2009, the RDC no. 65/2001 was repealed marking the end of the SUSEP regulation that still reached the specialized insurance companies.

FenaSaúde and the Representation of Associated Institutions With registered office in Rio de Janeiro, the National Federation of Supplementary Health (FenaSaúde) is the higher body of institutional representation for the segment of companies that operate in the supplementary health sector, attending as much the specialized insurance companies as the operators of the other plan modalities, and that are subjected to regulation

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by the ANS, special autarchy bound to the Ministry of Health. In this respect, FenaSaúde differs from the other federations bound to the National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg), whose associated - insurance companies, capitalization companies and open private pension entities - have their activities regulated by SUSEP, autarchy bound to the Ministry of Finance. In the exercise of its institutional mission, FenaSaúde represents its associated in important forums, such as the Chamber of Supplementary

Health, advisory body of ANS, National Council on Health, body of social control; various technical chambers of the Brazilian Medical Association (AMB); National Accreditation Organization (ONA) and Brazilian Accreditation Consortium (CBA), associated with the Joint Commission International, which promotes accreditation in the network of health provider. In 2009, FenaSaúde counted on 24 operators of health plans, namely: specialized insurance companies, companies of group medicine and group dentistry:

Associated

Modality

Allianz Saúde S/A

Insurance Company Specialized in Health

Brasilsaude Companhia de Seguros

Insurance Company Specialized in Health

Excelsior Med Ltda

Medical Group

Golden Cross Assistencia Internacional de Saúde Ltda

Medical Group

Itauseg Saúde S/A

Insurance Company Specialized in Health

Marítima Saúde Seguros S/A

Insurance Company Specialized in Health

Medial Saúde S/A

Medical Group

Odontoprev S/A

Group Dentistry

Omint Serviços de Saúde Ltda

Medical Group

Porto Seguro - Seguro Saúde S/A

Insurance Company Specialized in Health

Unibanco Saúde Seguradora S/A

Insurance Company Specialized in Health

Unimed Seguros Saúde S/A

Insurance Company Specialized in Health

Amil Grupo Amico Saúde Ltda

Medical Group

Amil Assistência Médica Internacional Ltda

Medical Group

Amil Planos por Administração Ltda

Medical Group

Bradesco Grupo Bradesco Dental S/A

Insurance Company Specialized in Health

Bradesco Saúde S/A

Insurance Company Specialized in Health

Mediservice Administradora de Planos de Saúde S/A

Medical Group

Intermédica Grupo Intermedica Sistema de Saúde S/A

Medical Group

Interodonto - Sistema de Saúde Odontológica S/C Ltda

Group Dentistry

Notre Dame Seguradora S/A

Insurance Company Specialized in Health

Sul América Grupo Sul America Companhia de Seguro Saúde

Insurance Company Specialized in Health

Sul América Seguro Saúde S/A

Insurance Company Specialized in Health

Sul América Serviços de Saúde S/A

Medical Group

Already in the end of 2009, the associations of the companies Metlife Planos Odontológicos Ltda. and Careplus Medicina Assistencial Ltda. were approved.

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FenaSaúde and the Market Regulation In general, two thousand and nine will be remembered as a year of profound changes in the structure of the supplementary health market. Most of these changes occurred by the regulation produced by the ANS. It was in 2009 that the discussions begun in previous years, such as portability, the new rules on contracting collective plans and the administrators of benefits have materialized as normative resolutions, some of them motivated by their inclusion in the Growth Acceleration Program (PAC) of the Health launched by the federal government. Also under the regulatory aspect, in the end of 2009 the main rules were changed for financial guarantees of the industry with significant impacts being expected for 2010. Throughout 2009, ANS has emphasized the care aspect in the discussion for revising the list of procedures, culminating in the recent publication of the new list with inception in June 2010. New diagnostic technologies, expansion of the limits for consultations with health practitioners and new coverages in the medical and odontological care industries were included, but many of the new coverages are bound to clinical guidelines. New procedures for family planning were also included in the list, as well as the procedures arising from working accident. The rules for reimbursement to the SUS were also changed. Other regulations also resulted in major changes in the operation, such as corporate portal, Unified Table for Supplementary Health, medical and odontological, changes in the Product Information System (SIP). As for the Board of Directors of ANS, two new Directors took office, of three-year term: Maurício Ceschin and Leandro Reis Tavares in the positions resulting from the end of terms of José Leôncio Andrade Feitosa and Eduardo Marcelo de Lima Sales, as Director of Sectorial Development and Director of Supervision, respectively. The year 2009, in a general manner, will be also remembered by the international economic crisis that had its apogee at the end of 2008, but whose effects were felt in early 2009. In the supplementary health, ANS sought, in advance, to deny that the crisis would hit actually the industry, perhaps to have more leeway to pursue its agenda that in any way represents increase

in the sectorial costs. Before the first statistic available, which showed that the number of beneficiaries had presented a small increase in the first quarter, ANS has “sentenced” the lack of contagion of the crisis in the supplementary sector on the occasion of the International Seminar organized in July by the Direction of Rules and License of the Operators (DIOPE), which discussed the impact of the crisis in the sector. Meanwhile, the economic and financial data of the first semester, released in September, made clear the effect of the crisis in the loss ratio of the sector. The loss ratio of the associated with FenaSaúde went from 78% in the first semester of 2008 to 83% over the same period of 2009. The jump is even more expressive when we see that in the first quarter of 2008 the loss ratio was 76%. Between the first and second quarter of 2009, not less than 15 of the16 associated companies observed an increase in their loss ratio. We found that the impact on the loss ratio did not focus on the operators of FenaSaúde. We conducted a study with 800 operators of distinct modalities and sizes with data available since 2007, where the increase in loss ratio in the first semester of 2009 was observed as much compared to the first quarter of 2009 as compared to the first semester of 2008. Such increase was noted both for the medical-hospital and for the odontological segments. If we take the study by modalities, only the odontological cooperatives did not present raise in the loss ratio. The increase in loss ratios was caused partially by a typical moral hazard behavior by the beneficiaries who, before the prospect of layoffs, increased the use of their plans. The operators, on the other hand, before the increase of the pressure to reduce costs of the contractors, sought to renegotiate contracts, to design again the benefits and other adjustments, but even so, the loss ratio increased. We should remember that the H1N1 flu was also a relevant factor for raising the use of the plans. The good news is that by the end of 2009 the economy has already showed tangible signals

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of improvement in the indicators, as a result of a countercyclical fiscal policy implemented over the year with various fiscal relieves that ensured the retaking of consumption and economic growth. The supplementary health should follow the new economic cycle and to expand. In 2009, some mergers and acquisitions shook the industry as the cases of Amil/Medial, Bradesco/Odontoprev and Unibanco/Tempo Participações, what demonstrates the increasing need for scale and operational efficiency to ensure business success. ANS has set in 6.76% the maximum readjustment for individual/family medical-hospital health plans contracted from January 1999, the so-called new plans. Insufficient to cover the increased costs, measured by Variation of the MedicalHospital Costs (VCMH) calculated by the Institute for the Studies of Supplementary Health (IESS) that was 14.2% in 2008. Accordingly, although the sub-readjustment is not an innovation in the market at a time of crisis may cause meaningful financial damages. For 2010, it is a matter of concern the intent of ANS to bind the adjustment to the Performance Index in Supplementary Health (IDSS) of the qualification program. Despite of FenaSaúde has repeatedly insisted in the precariousness of the indicator and in the mistaken policy of ANS, the program went on. The 2009 evaluation had a new indicator relating to the health promotion and risks prevention and diseases programs approved in ANS. Furthermore, the indicators of reimbursement proportion to the SUS and fluctuation rate of the number of beneficiaries were excluded from the Structure and Operation dimension. In the economic-financial and satisfaction of beneficiaries dimensions, the same indicators were kept. Also in 2009, we may highlight the intensification of the relationships between operators and medical providers with the return of the threats of strikes in the service and boycott to the health plans. The medical movement rebounded nationwide in the case of the pediatricians of the Distrito Federal, where the Ministry of Labor intervened seeking not only to collectivize the negotiations, but also to establish parameters for adjustments and periodicity. Within this context, the bench of health present in the National

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Congress intensified the work for the progress of the Bills that affect the sector, especially those that amend the Law no. 9656/1998, such as the substitutive of the Bill 4076/2001. FenaSaúde participated actively in the process of the Bills and amendments, with opinions, proposals and studies. It also participated in the discussions that culminated in public hearing at the Committee on Social Security and Family to discuss the Bill 1220/2007, which obliges health plans operators to comply with the tables prepared by representative entities of the categories. Another Bill that arises from the medical class was the Bill no. 39/2007 in the Chamber, and that was also subject to public hearing in the Committee on Economic Affairs of the Federal Senate, and which seeks to regulate the negotiation of the remuneration of the doctors by creating a list of procedures with values. The main project of the Federation, in partnership IESS, was initiated in 2009, relating to the establishment of structured and standardized terminology for the Orthosis, Prosthesis and Special Materials (OPME), particularly in orthopaedic area. This will be an important tool for managers of the associated. FenaSaúde led the composition and meetings of the technical boards for understanding with the purpose to standardize concepts for implementation of the Notification of Preliminary Investigation (NIP). We also participated actively in the Working Group on OPME formed under CNS. FenaSaúde, it is important to remember, will be the holder representative in the Council over the next three years. In institutional terms, the Federation continued the meetings with the representative bodies of the market, namely: Brazilian Houses of Mercy Confederation, ABRAMGE, UNIDAS and UNIMED, besides participating in the meetings of ONA and CBA. Even with regard to accreditation, the Federation participated in the initial meetings about the project for the accreditation of operators which ANS plans to regulate in 2010. The Federation has also undergone important changes over 2009. In February, the President of FenaSaúde, Dr. Luiz Carlos Trabuco Cappi (Bradesco Saúde), submitted a Letter of Resignation to the Board of Directors due to his new

duties in the Bradesco organization, and appointed the Vice-President, Dr. Geraldo Rocha Mello (Medial Health), as his substitute for the Presidency of the Federation until the end of his term. Also in February, Dr. Max Thiermann (Allianz Saúde) had his name confirmed for Director of the Federation, subsequently substituted by Dr. Paul Marracini. Dr. Samir José Kalil (Medial Saúde) has also joined to the Board of Directors. On the same occasion, Dr. Heráclito de Britto Gomes Junior (Bradesco Saúde), Director of the Federation, has occupied the position of Vice-President. In April, Dr. Gabriel Portella substituted Dr. João Alceu Amoroso Lima as Vice-President of the entity, representing South America.In December, after the acquisition of Medial Saúde by Amil, Dr. Geraldo Rocha Mello

resigned the position of President, appointing the Vice-President Dr. Heráclito de Britto Gomes Junior to take office as President until the end of the term to be terminated on February 2010. Dr. Samir José Kalil also resigned to its position as Director. On December 2009 was elected by unanimity a new Board of Directors for the Federation for the 2010/2012 triennium. Due to the vacancy of the Presidency, result from resignation of Dr. Heráclito Gomes de Brito Junior, Mr. Marcio Serôa de Araujo Coriolano was unanimously elected to the position until 2012.

Board of Directors 2010/2012 President Márcio Serôa de Araujo Coriolano

Grupo Bradesco

Vice-Presidents Edson de Godoy Bueno

Grupo Amil

Gabriel Portella Fagundes Filho

Grupo Sul América

Paulo Sérgio Barros Barbanti

Grupo Intermédica

Directors André do Amaral Coutinho

Omint Serviços de Saúde Ltda

Dalmo Claro de Oliveira

Unimed Seguros Saúde S/A

Edson Machado Monteiro

Brasilsaúde Companhia de Seguros

Eduardo Ribeiro do Vale Vidigal

Marítima Saúde Seguros S/A

João Carlos Gonçalves Regado

Golden Cross Assistência Internacional de Saúde

Luiz Fernando Butori Reis Santos

Unibanco Saúde Seguradora S/A

Newton José Eugênio Pizzotti

Porto Seguro - Seguro Saúde S/A

Paulo Miguel Marraccini

Allianz Saúde S/A

Executive Director Solange Beatriz Palheiro Mendes

To monitor the regulation of the sector, new commissions were created - Actuarial, Statistical Information, and Ethics – in order to support the decisions of the Board of Directors. For 2010, our expectation is intended for defining readjustments rules, for the operators’

accreditation process. FenaSaúde, on the other hand, will continue making efforts to minimize potential damages and submit to the government its positive agenda that distinguishes for the stability of the regulatory milestone, balance in the relationships, and need for sustainable growth of the sector.

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The Technical Committees The Permanent Committees of FenaSaúde are those liable for assessing matters of the supplementary health sector interest, analyzing, discussing and holding a position on subject matters relevant to the market, on which issue opinions, prepare working plans or operation standards aiming at solving the problems, procedures unification, recommendations and strategies of action. The Permanent Committees are segmented into: • • • • • •

Technical on Health (CTEC) Legal Affairs (CJUR) Communication (CECOM) Technical on Statistic Data (CINF) Ethics (CETI) Actuarial (CATI)

The Permanent Committees are composed by a President, acting as coordinator, and two representatives of each affiliated company, and it may also count on the participation of guests, professionals with notorious knowledge and expertise in the supplementary health market, or related entities. In addition to the Permanent Committees, FenaSaúde also counts on the Accounting Working Group, Odontological Working Group,

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Working Group on the List of Procedures, Working Group on the Unified Table of Supplementary Health (TUSS), bound to CTEC. The duties of the Committees are to advise the Board of Directors of FenaSaúde and to study issues related to the operations of the supplementary health sector, proposing and guiding initiatives, strategies, issues and technical works which they believe appropriate to the market interests. The executive area of FenaSaúde, through its staff, is liable for monitoring and participating of the works developed by the Committees, fulfilling the following: • To maintain in good order the control of all the cases in process; • To refer matters to the respective reporters; • To organize the agendas of meetings, which shall contain all matters in progress and those not reported yet; • To maintain the record of the members attendance; • To write the minutes of meetings, submitting them to the President’s discretion; • To perform all the other services imposed by the needs of the order; • To advice the Committees • To compose the Committees

Technical Committee on Health (CTEC) President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company

Name

Allianz Saúde S/A

Mauricio da Silva Lopes

Allianz Saúde S/A

Mônica Carbone Russo

Amil Assistência Médica Internacional Ltda

Antônio Jorge Gualter Kropf

Amil Assistência Médica Internacional Ltda

Cristiane Rose Jourdan

Bradesco Saúde S/A

Marcio Serôa de Araujo Coriolano

Bradesco Saúde S/A

Flávio Bitter

Brasilsaúde Companhia de Seguros

Miguel Archanjo de Souza Aguiar Netto

Federação Nacional de Saúde Suplementar

Solange Beatriz Palheiro Mendes

Federação Nacional de Saúde Suplementar

Sandro Leal Alves

Federação Nacional de Saúde Suplementar

Vera Queiroz Sampaio de Souza

Golden Cross Assistência Internacional de Saúde Ltda

Franklin Padrão Júnior

Golden Cross Assistência Internacional de Saúde Ltda

Roberta Iachini

Unibanco Saúde Seguradora S/A

Marco Aurélio Garutti de Araújo

Unibanco Saúde Seguradora S/A

José Augusto Codesso

Marítima Saúde Seguros S/A

Rogério Pomim Serra

Medial Saúde S/A

Cláudio Martins Marote Júnior

Odontoprev S/A

Ruy Francisco de Oliveira

Omint Serviços de Saúde Ltda

Anna Beatriz Barros Carneiro

Porto Seguro - Seguro Saúde S/A

Edson Makoto Takitani

Porto Seguro - Seguro Saúde S/A

Antonio Carlos Ferreira

Porto Seguro - Seguro Saúde S/A

Elaine Contreras Garcia Dias

Sul América Saúde

Marco Antônio Antunes da Silva

Sul América Saúde

Luiz Celso Dias Lopes

Unimed Seguros Saúde S/A

Saulo Ribeiro Lacerda

Unimed Seguros Saúde S/A

Lara Cristina da Silva Facchini

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Committee on Legal Affairs (CJUR) President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company

Name

Allianz Saúde S/A

Mônica Carbone Russo

Amil Assistência Médica Internacional Ltda

Fabiola da Silva Santos

Amil Assistência Médica Internacional Ltda

Geny Guedes de Queiros Van Erven

Bradesco Seguros S/A

Ivan Luiz Gontijo Junior

Brasilsaúde Companhia de Seguros

Margarida Amorim Martins da Costa

Brasilsaúde Companhia de Seguros

Múcio Novaes de Albuquerque Cavalcanti

CNSeg

Elaine de Abreu Jorge

CNSeg

Maria da Glória Faria

Federação Nacional de Saúde Suplementar

Solange Beatriz Palheiro Mendes

Golden Cross Assistência Internacional de Saúde Ltda

Carlos Ernesto de Saboya Henningsen

Golden Cross Assistência Internacional de Saúde Ltda

Daniela Maria Thomé Camargo Wanderley

Itauseg Saúde S/A

Cinthia Carvalho de Andrade

Unibanco Saúde Seguradora S/A

Maria de Fátima Ferreira de Freitas

Marítima Saúde Seguros S/A

Wilson Roberto Bueno da Costa

Marítima Saúde Seguros S/A

Milena Carvalho Fratin

Medial Saúde S/A

Mario Wanderley Junqueira Vieira

Omint Serviços de Saúde Ltda

Paulo Cesar Villar Gagliardi

Omint Serviços de Saúde Ltda

Carla Cristina Soares Paim

Porto Seguro - Seguro Saúde S/A

Elaine Cristina Carvalhaes Silva

Porto Seguro - Seguro Saúde S/A

Patrícia Lodovico Gonçalves Justino

Sul America Saúde

Luiz Fernando Ract Camps

Unimed Seguros Saúde S/A

Alexandre Albuquerque Almeida

Unimed Seguros Saúde S/A

Priscila de Oliveira Veras

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Actuarial Committee (CATI) President: Mônica Moysés Nigri (Manager for Regulatory Matters and Acquisition of Golden Cross) Company Allianz Saúde S/A Allianz Saúde S/A Bradesco Saúde S/A Bradesco Saúde S/A Federação Nacional de Saúde Suplementar

Name Robson P Amaral Tiago Soares Ana Lúcia Fernandez Andre Riboli Mônica Levandeira Ares Solange Beatriz Palheiro Mendes

Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Marítima Saúde Seguros S/A Marítima Saúde Seguros S/A Medial Saúde S/A Medial Saúde S/A Omint Serviços de Saúde Ltda Porto Seguro - Seguro Saúde S/A Porto Seguro - Seguro Saúde S/A Sul América Companhia de Seguro Saúde Sul América Companhia de Seguro Saúde

Sandro Leal Alves Vera Queiroz Sampaio de Souza Andréa Alves de Andrade Mônica Moysés Nigri Almir Martins Ribeiro Elizabeth Rosa Cenisvaldo Iglesias de Melo Juliano Kiguchi Tomazela Anna Beatriz Carneiro Gustavo Genovez Sandra Lucas Gláudia de Carvalho André Naus

Committee on Ethics (CETI) President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company Allianz Saúde S/A Amil Assistência Médica Internacional Ltda Amil Assistência Médica Internacional Ltda Bradesco Saúde S/A Bradesco Saúde S/A Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Intermédica Sistema de Saúde S/A Unibanco Saúde Seguradora S/A Unibanco Saúde Seguradora S/A Itauseg Saúde S/A Marítima Saúde Seguros S/A Marítima Saúde Seguros S/A Medial Saúde S/A Omint Serviços de Saúde Ltda Omint Serviços de Saúde Ltda Porto Seguro - Seguro Saúde S/A Sul América Saúde Sul América Saúde

Name Sergio Nishio Nelcy B. Amaral Pedro Feitosa Manoel Antonio Peres Sheyla Regina Costas Sandro Leal Alves Solange Beatriz Palheiro Mendes Vera Queiroz Sampaio de Souza Arthur Rosas Herminio Mendes Paulo Sergio Barros Barbanti Henrique Luiz Isabella Oliveira Sarita C N Pimenta Andre da Silva Bernardes Silvio Domingues Walter Lyrio Valle Anna Beatriz Wagner Antonio Nascimento Marcia Hensel Helena Dias Meziara Magnus Acras

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Committee on Statistic Data (CINF) President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company Allianz Saúde S/A Bradesco Saúde S/A Bradesco Saúde S/A Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Marítima Saúde Seguros S/A Marítima Saúde Seguros S/A Porto Seguro - Seguro Saúde S/A Porto Seguro - Seguro Saúde S/A Sul America Seguro Saúde S/A Sul America Seguro Saúde S/A Unibanco Saúde Seguradora S/A Unibanco Saúde Seguradora S/A Unimed Seguros Saúde S/A Unimed Seguros Saúde S/A

Name Fernando Siqueira Alencar Flávio Bitter Ana Lúcia Fernandez Andre Riboli Solange Beatriz Palheiro Mendes Sandro Leal Alves Vera Queiroz Sampaio de Souza Rogério Pomim Serra Jorge Sandro Pascale Alexandre Peixoto Marcos Moitinho Luiz Celso Dias Lopes Marco Antônio Antunes da Silva Marco Aurélio Garutti de Araújo Karina Ikeda Francisco José de Oliveira Souza Aragão Fernanda Giulianello

Accounting Working Group President: Roberto Chamberlain (Bradesco Saúde) Company Allianz Saúde S/A Bradesco Saúde S/A Bradesco Saúde S/A Bradesco Dental S/A Brasilsaúde Companhia de Seguros Brasilsaúde Companhia de Seguros Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Intermédica Sistema de Saúde S/A Intermédica Sistema de Saúde S/A Medial Saúde S/A Odontoprev S/A Omint Serviço de Saúde Ltda Omint Serviço de Saúde Ltda Porto Seguro - Seguro Saúde S/A Porto Seguro - Seguro Saúde S/A Sul América Companhia de Seguro Saúde Sul América Companhia de Seguro Saúde Unimed Seguros Saúde S/A

120

Name Sergio Ricardo Yamazaki Roberto Chamberlain da Costa Marcelo Nogueira Ferreira Fernando Reis Jairton Cardoso Guimarães Marcos Natal Batista Sandro Leal Alves Solange Beatriz Palheiro Mendes Aloisio José de Souza Francisco Aristides da Silva Dantas Neto Amalia Carrera Gonzalez Ana Teresa do Amaral Meirelles José Roberto Vedovato José Ilton Guarnieri Amauri José Junqueira Fernando de Paula Luiza de Marilac Edson Soares dos Santos Celso Damadi Laênio Pereira dos Santos Jair Soares Barcellos Laurindo Toshio Sato

Odontological Working Group President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company Amil Assistência Médica Internacional Ltda Amil Assistência Médica Internacional Ltda Bradesco Saúde S/A Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Grupo Notre Dame / Intermédica Medial Saúde S/A Medial Saúde S/A Metlife Planos Odontológicos Ltda Metlife Planos Odontológicos Ltda Odontoprev S/A Omint Serviço de Saúde Ltda Porto Seguro - Seguro Saúde S/A Porto Seguro - Seguro Saúde S/A Sul America Seguro Saúde S/A Sul America Seguro Saúde S/A

Name Márcia Médici de Oliveira Cláudia do Val Couri Josias Paulino da Costa Sandro Leal Alves Solange Beatriz Palheiro Mendes Vera Queiroz Sampaio de Souza Rozana Tito Sperduto Tatiana de Melo Faria Cavalcante José Antonio Molinari Mônica Santos Schmid Danilo Maurici Fábio Massaharu Nogi Maristela Tomé Fonoff Ruy Francisco de Oliveira Flavio Augusto Merichello Renata Camillo Gutierrez Duran Cristiano Augusto Rosa Mario Sergio Saddy Marly Jeronimo de Souza Ramos

Working Group on TUSS President: Solange Beatriz Palheiro Mendes (Executive Director of FenaSaúde) Company Allianz Saúde S/A Amil Assistência Médica Internacional Ltda Amil Assistência Médica Internacional Ltda Bradesco Saúde S/A Bradesco Saúde S/A Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Federação Nacional de Saúde Suplementar Golden Cross Assistência Internacional de Saúde Ltda Golden Cross Assistência Internacional de Saúde Ltda Intermédica Sistema de Saúde S/A Itaú-Unibanco Itaú-Unibanco Itaú-Unibanco Marítima Saúde Seguros S/A Marítima Saúde Seguros S/A Medial Saúde S.A Omint Serviços de Saúde Ltda Omint Serviços de Saúde Ltda Porto Seguro - Seguro Saúde S/A Sul América Saúde Sul América Saúde

Name Sergio Nishio Nelcy B. Amaral Pedro Feitosa Manoel Antonio Peres Sheyla Regina Costas Sandro Leal Solange Beatriz Palheiro Mendes Vera Queiroz Sampaio de Souza Arthur Rosas Herminio Mendes Paulo Sergio Barros Barbanti Henrique Luiz Isabella Oliveira Sarita C N Pimenta Andre da Silva Bernardes Silvio Domingues Walter Lyrio Valle Anna Beatriz Wagner Antonio Nascimento Marcia Hensel Helena Dias Meziara Magnus Acras

121

Chambers, Commissions, Council and Committees National Council on Health (CNS) Ministry of Health Goal: to formulate strategies, to control and to hold a position on the enforcement of the national health policy, to decide on state health plans, disagreements raised by the State and Municipal Councils on Health; to establish guidelines to be taken into consideration when drawing up the health plans, to monitor and to control the activities of private health institutions and the process of scientific and technological development and inclusion within the sector. Holder: Flávio Heleno Poppe de Figueiredo – Sinamge 1st Deputy: Solange Beatriz Palheiro Mendes – FenaSaúde 2nd Deputy: Marília Ehl Barbosa – Unidas

Permanent Committee on Supplementary Health of the National Council on Health Goal: to support the National Council on Health to formulate strategies and policies for the supplementary health sector. Holder: Solange Beatriz Palheiro Mendes – FenaSaúde Deputy: Sandro Leal Alves – FenaSaúde

National Accreditation Organization (ONA) Goal: to promote the process of accreditation in order to improve the quality of health care, the productivity of hospitals, outpatient departments, specialized clinics and other, and to monitor the impact of the service costs on public and private budgets. Holder: Solange Beatriz Palheiro Mendes – Fena-Saúde Deputy: Sandro Leal Alves – FenaSaúde

Brazilian Accreditation Consortium (CBA) / Joint Commission International CBA is the sole representative of the Joint Commission International in Brazil, liable for the methodology of the International Accreditation on Health System and Services.

122

Holder: Solange Beatriz Palheiro Mendes – FenaSaúde Deputy: Sandro Leal Alves – FenaSaúde

Chamber of Supplementary Health (CSS) Goal: Advisory Body of ANS Holder: Marcio Serôa de Araújo Coriolano Deputy: Marco Antônio Antunes da Silva

Committee for Supplementary Health Information Exchange Standardization (COPISS) – TISS Goal: to promote the development and improvement of the TISS standard and the electronic information exchange among health plans operators, health services providers and ANS. Holder: Sônia Bastos de Souza Deputy: Rosimeire Ishiguro de Lima

Committee for Supplementary Health Information Exchange Standardization (COPISS) – TISS – Dentistry Goal: to promote the development and improvement of the TISS standard and electronic information exchange of between odontological plans operators, odontological service providers and ANS. Holder: Josias Paulino da Costa Deputy: Sandro Leal Alves

Business Council of Medicine and Health of the Rio de Janeiro Trade Association Goal: to propose actions for qualification and sustainability of the health care network in Rio de Janeiro city. Holder: Solange Beatriz Palheiro Mendes

Technical Chambers of the Brazilian Medical Association (AMB) Chamber of Brazilian Hierarchical Classification of Medical Procedures (CBHPM). Holder: Márcio Serôa de Araújo Coriolano; Deputy: Mariano Shiroma

Technical Studies and Research

Chamber of Technologies Assessment Holder: Regina Melo Deputy: Maria Thereza Espenchitt

Regulation, Productive Efficiency and Quality of the Health Plans Operators in Brazil: an analysis on the efficient frontiers

Chamber of Implants Holder: Mauricio Mustaro Chamber of Clinic Guidelines Holder: Márcio Serôa de Araújo Coriolano Deputy: Sérgio Galvão Chamber of Materials and Drugs Holder: Ricardo da Cruz Moraes Deputy: Maristela Rosa

Council for the Central of Services Administration of CNSeg

Prize winner of the Secretariat for Economic Monitoring (SEAE) of Economic Regulation of 2009 under category “professionals”, the study developed by the manager of FenaSaúde, Sandro Leal, relies on the efficiency indexes calculation to counteract the ranking disclosure policy by ANS. Among some results achieved, the study shows that IDSS, defined and calculated by ANS, goes in opposite direction to the companies efficiency, what suggests the urgent need for changing.

Holder: Marcio Serôa de Araújo Coriolano

Statistics of the Market Penetration of the Sector

Values in R$

Year

Income

GDP Participation

GDP

2002

25.702

1.74%

1.477.822

2003

28.486

1.68%

1.699.948

2004

32.216

1.66%

1.941.498

2005

37.140

1.73%

2.147.239

2006

42.034

1.77%

2.369.484

2007

51.846

1.95%

2.661.344

2008

60.464

2.01%

3.004.881

2009

64.156

2.04%

3.143.014

As the GDP growth in 2009 was negative, in real terms and in nominal terms, the growth was less than that observed in the supplementary health sector, the penetration of the sector in GDP increased in 2009.

Source: Income (effective payments) until 2008: Information Book of the Supplementary Health - ANS Dec/2009. Income of 2009: www.ans.gov.br - Financial Statements (data collected on March 2010). GDP: www.ipeadata.org.br – Access on March 22nd, 2010.

Note: For companies that did not report the statements in the fourth quarter of 2009 were repeated the data reported in the third quarter. Future feeding of the ANS system (DIOPS) should change these values.

1.74%

1.68%

1.66%

1.73%

1.77%

2002

2003

2004

2005

2006

1.95%

2.01%

2.04%

2007

2008

2009

123

Income (Payment) of the Operators of the Supplementary Health Market by Modality Operator Modality Self-Management Medical Cooperative Philanthropy

2003

2004

2005

2006

2007

Values in R$

2008

2009

%Variation 2003/2008

%Variation 2008/2009

533.986.730

656.597.089

931.790.621

1.068.595.957

6.475.312.324

6.735.810.447

7.380.321.731

1161.42%

9.57%

10.613.942.396

12.163.851.797

14.016.599.605

16.474.630.228

18.263.279.859

20.942.085.296

22.300.922.398

97.31%

6.49%

864.327.484

868.818.355

1.076.052.249

1.186.762.794

1.926.930.037

1.334.879.736

1.450.026.928

54.44%

8.63%

Group Medicine

9.302.246.989

10.410.285.140

12.461.371.553

13.677.865.072

15.500.425.269

17.000.347.754

19.230.374.606

82.76%

13.12%

Insurance Company Specialized in Health

6.701.305.077

7.522.550.081

7.912.489.383

8.749.939.565

8.608.423.749

11.119.080.267

12.466.014.480

65.92%

12.11%

Odontological Cooperative

153.760.104

211.768.382

246.802.425

249.435.750

321.092.414

356.171.670

390.837.713

131.64%

9.73%

Group Dentistry

316.964.247

382.295.283

495.529.883

626.805.273

750.936.990

723.246.292

926.376.711

128.18%

28.09%

28.486.533.026

32.216.166.126

37.140.635.719

42.034.034.639

51.846.400.641

58.211.621.462

64.156.240.345

104.35%

10.21%

Total

Source: Until 2007: Information Book of the Supplementary Health - ANS Dec/2009. For 2008 and 2009:09: Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010). For companies that did not report the statements in the fourth quarter of 2009 were repeated the data reported in the third quarter. Future feeding of the ANS system (DIOPS) of should change these values.

When we observe a longer term, it is clear the growth potential of the sector, which doubled its income from 2003 to 2008. The segment of self-management deserves the consideration that it was not obliged to send its financial statements to ANS, thus the variation in the period is

not real. In 2009, some sectors managed to increase its income more than others, despite the economic crisis. However, in the supplementary health the data on income tell little when presented without the corresponding costs.

Care Expense (Indemnified Events) of the Operators of the Supplementary Health Market by Modality Operator Modality Self-Management Medical Cooperative Philanthropy

2003

2004

2005

2006

Values in R$

2007

2008

2009

%Variation 2003/2008

%Variation 2008/2009

441.709.994

596.611.914

818.496.520

886.582.053

5.673.263.121

6.543.413.665

6.939.726.740

1381.38%

6.06%

8.869.493.804

10.097.592.332

11.465.386.768

13.294.455.215

14.538.049.003

17.350.025.370

18.034.719.649

95.61%

3.95%

633.490.700

670.288.462

791.299.297

897.537.594

1.031.634.312

1.168.947.270

1.178.174.480

84.52%

0.79%

Group Medicine

7.060.452.564

7.829.742.790

9.435.429.930

10.386.760.817

11.932.930.519

13.595.937.004

14.883.125.169

92.56%

9.47%

Insurance Company Specialized in Health

5.779.630.973

6.562.349.818

7.119.895.660

7.347.293.760

7.721.757.314

9.007.354.424

10.373.132.354

55.85%

15.16%

117.318.415

141.011.501

162.137.862

157.373.064

208.507.003

233.949.757

247.575.995

99.41%

5.82%

Odontological Cooperative Group Dentistry Total

142.302.581

162.094.518

203.597.234

248.383.067

305.736.704

339.653.521

373.842.033

138.68%

10.07%

23.044.399.032

26.059.691.336

29.996.243.270

33.218.385.571

41.411.877.977

48.239.281.012

52.030.296.420

109.33%

7.86%

Beneficiaries of Health Plans, by Operator Modality - Dec/2003 – Sept/2009 Philanthropy

Group Medicine

8.921.584

1.139.212

1.000.124

12.271.381

2.639.137

4.846.465

5.257.839

14.059.392

2.038.871

1.369.450

16.600.530

6.513.423

6.046.252

5.192.174

14.835.262

2.297.952

1.369.695

17.139.317

7.061.982

6.314.255

SelfManagement

dec/2003

35.880.069

5.057.213

dec/2008

51.885.757

sept/2009

54.210.637

Medical Cooperative

Source: Information Book of the Supplementary Health - ANS Dec/2009

Notes: 1. The term “beneficiary” refers to a ties to health plans, and may include multiple ties to a same individual; 2. Preliminary data, subject to revision; 3. The total number of beneficiaries includes operators’ beneficiaries.

124

Insurance Company Specialized in Health

Odontological Cooperative

Total

Accounting Period

Group Dentistry

When measured in terms of beneficiaries, the growing of the market for supplementary health seems meaningful. From 2003 to 2008, the sector grew by 50% expanding its coverage to 54 million of beneficiaries, what represents about 28% of the Brazilian population. But the ANS

databases suffered from under-reporting and, through the improvement of the regulation, it is becoming more consistent. The group dentistry segment, however removed the statistical effect, in fact led the market in growth of beneficiaries.

Beneficiaries, as per Gender by Age-Group Gender

Female

Male

From 0 to 9 years old

3.355.538

3.507.827

From 10 to 19 years old

3.474.483

3.504.404

From 20 to 29 years old

5.955.844

5.480.100

From 30 to 39 years old

5.450.654

4.952.133

From 40 to 49 years old

4.141.026

3.769.879

From 50 to 59 years old

2.916.262

2.494.614

From 60 to 69 years old

1.570.539

1.196.306

From 70 to 79 years old

966.906

628.058

80 years old and above

535.404

280.291

1.068.762

910.893

28.380.164

25.830.473

Inconsistent Age Total Source: Information Book of the Supplementary Health - ANS Dec/2009

Note: The term â&#x20AC;&#x153;beneficiaryâ&#x20AC;? refers to ties to health plans, and may include multiple ties to a same individual;

A demographic characteristic of the sector is the predominance of female beneficiaries and the concentration of beneficiaries in the intermediate age of the population.

We following present, economic-financial and care information on the operators associated with FenaSaĂşde compared to the total market, when appropriate.

125

Statistic of the Operators Associated with FenaSaúde Beneficiaries, Incomes and Outcomes of the Associated in 2009 2009

Beneficiaries Associated

Medical Care

Exclusively Dentistry

Values in R$

Incomes and Outcomes Total

Effective Payments / Earned Premiums

Indemnified Net Events/Losses

Allianz Saúde S/A

135.940

366.948.634

290.163.439

Brasilsaude Companhia de Seguros

108.549

13.280

121.829

205.973.289

175.810.268

Excelsior Med Ltda.

109.152

162.693.281

114.003.841

Golden Cross Assistencia Internacional de Saúde

630.914

952.937

1.460.867.209

1.233.715.868

Itauseg Saúde S/A Marítima Saúde Seguros S/A Medial Saúde S/A Odontoprev S/A Omint Serviços de Saúde Ltda

322.023

17.176

94.580.652

154.194.942

150.336

306.985.626

232.260.586

317.447

1.830.190

2.133.777.648

1.626.902.741

2.097.984

344.237.314

127.650.439

1.512.743 54.216

27.572

81.788

477.447.591

383.546.123

Porto Seguro - Seguro Saúde S/A

328.924

56.246

385.170

664.689.271

500.115.441

Unibanco Aig Saúde Seguradora S/A

109.896

328.628.807

280.005.746

Unimed Seguros Saúde S/A

296.712

445.229.277

353.908.641

Amil Grupo Amico Saúde Ltda Amil Assistência Médica Internacional Amil Planos Por Administração Ltda

2.046.937

384.223

2.431.160

4.556.979.296

3.392.377.639

913.970

110.604

1.024.574

1.044.321.043

771.822.932

1.063.853

273.619

1.337.472

3.434.451.938

2.555.149.984

69.114

78.206.315

65.404.722

2.643.408

1.261.368

3.904.776

6.024.717.757

5.189.121.149

Bradesco Dental S/A

1.242.863

207.195.558

120.880.192

Bradesco Saúde S/A

2.392.605

2.392.609

5.284.641.944

4.569.640.508

250.803

18.501

269.304

532.880.254

498.600.448

Intermédica Grupo

2.067.820

1.071.501

3.139.321

1.691.907.579

1.249.760.229

Intermedica Sistema de Saúde S/A

1.942.073

147.280

2.089.353

1.340.584.623

984.319.195

924.221

111.458.364

53.444.729

125.747

239.864.593

211.996.306

1.721.135

4.839.650.238

3.968.823.573

282.941

1.391.630.533

1.217.906.923

Bradesco Grupo

Mediservice Administradora de Planos de Saúde

Interodonto - Sistema de Saúde Odontológica Notre Dame Seguradora S/A Sul América Grupo Sul America Companhia de Seguro Saúde

69.114

125.747 1.614.298

106.837

282.941

Sul América Seguro Saúde S/A

956.738

87.111

1.043.849

2.919.442.395

2.255.361.761

Sul América Serviços de Saúde S/A

266.070

6.446

272.516

528.577.310

495.554.889

FenaSaúde

11.827.021

5.658.481

17.485.502

24.105.313.468

19.272.360.664

Supplementary Health Market

41.892.990

12.317.647

54.210.637

64.156.240.345

52.030.296.420

28,23%

45,94%

32,25%

37,57%

37,04%

Market Share

Source: Beneficiaries: ANS Tabnet System, available at www.ans.gov.br (data collected on January 2010). Incomes and Outcomes: Financial Statements of the Health Plans Operators (data collected on March 2010)

126

In 2009, the companies associated with FenaSaĂşde were responsible for ensuring health care for 17 million of beneficiaries, representing 32% of the supplementary health market. In

2009, the associated held 38% of the total income of the industry, while the outcomes with care amounted to 37%.

Income of the Associated by Modality (2003/2009)

Values in R$

2003

2008

2009

%Variation 2003/2008

%Variation 2008/2009

6.700.740.805

11.115.416.955

12.455.810.578

65.88%

12.06%

Group Medicine

9.830.743.983

11.193.807.213

13.87%

Group Dentistry

390.856.570

455.695.677

16.59%

Supplementary Health Market

58.664.431.109

64.156.240.345

9.36%

Associated Modality Insurance Company Specialized in Health

Source: For 2003: Economic and financial data from Insurance Companies specialized in health (Excel files - ANS). For 2008 and 2009: Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010).

In this table we present the evolution of the income, where compared the years of 2003, 2008 and 2009 of the associated with FenaSaĂşde, by modality. We do not have data of Group Medi-

cine and Group Dentistry in 2003, because on the occasion, only the Insurance Companies specialized in health were associated..

Income of the Associated by Modality Operator Modality Group Medicine Insurance Company Specialized in Health Group Dentistry Total

Values in R$

Associated

Market Share of FenaSaĂşde

Market

2008

2009

2008

2009

2008

2009

9.830.743.983

11.193.807.213

17.000.347.754

19.230.374.606

57.83%

58.21%

11.115.416.955

12.455.810.578

11.119.080.267

12.466.014.480

99.97%

99.92%

390.856.570

455.695.677

723.246.292

926.376.711

54.04%

49.19%

21.337.017.509

24.105.313.468

58.664.431.109

64.156.240.345

36.37%

37.57%

Source: Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010)

Note: For companies that did not report the statements in the fourth quarter of 2009 were repeated the data reported in the third quarter. Future feeding at the ANS system (DIOPS) should change these values.

In the table above the information has been consolidated by operators modality and calculating the income percentage of the associated on the supplementary health market. For example: in 2009, the companies of group medicine associ-

ated had income of R$ 11.2 billion, representing about 58% of total income of the group medicine companies that sent the economic and financial data to ANS.

127

Care Expense of the Associated with FenaSaúde by Modality Associated

Operator Modality 2008

2009

2008

7.418.860.616

Insurance Company Specialized in Health

9.005.848.444 10.362.244.753

Total

Market Share of FenaSaúde in the Supplementary Health Market

Market

Group Medicine Group Dentistry

Values in R$

2009

8.729.020.743 13.595.937.004 14.883.125.169

2009

54.57%

58.65%

99.98%

99.90%

373.842.033

44.07%

48.44%

16.574.396.277 19.272.360.664 48.239.281.012 52.030.296.420

34.36%

37.04%

149.687.218

181.095.168

9.007.354.424 10.373.132.354

2008

339.653.521

Source: Financial Statements of the Health PlansOperators. Available at www.ans.gov.br (data collected on March 2010)

Para as empresas que não informaram as demonstrações no 4º trimestre de 2009 foram repetidos os dados informados no 3º trimestre. Futuras recargas no sistema da ANS (DIOPS) devem modificar esses valores.

Similarly to the table of income, we present data of participation of associated regarding the care expense, from 2008 to 2009, and compared to

the supplementary health market in the same period.

Costs of the Operators Associated with FenaSaúde In % over Earned Premiums Loss Ratio

Values in R$

2003

2008

2009

%Variation 2003/2008

%Variation 2008/2009

86.21%

77.68%

79.95%

-9.90%

2.92%

Administrative Cost

11.10%

10.82%

-2.50%

Acquisition Costs

5.06%

5.21%

3.02%

Source:

Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010)

Notes: 1 - The calculation of the loss ratio is given by: (41_Events) / (31_Effective Payments); 2 - Administrative Cost: Accounting Account (46_ADMINISTRATIVE EXPENSES); 3 - Acquisition Cost: Accounting Account (43_Acquisition Expense).

In 2009, the loss ratio of the Operators associated with FenaSaúde registered an increase of two percentage points while the administrative cost reduced. The acquisition cost had a small

increase. In the section “FenaSaúde and the Market Regulation” we deal with more details on this movement of the sector.

Economic-Financial Performance of the Companies Associated with FenaSaúde in 2009

Values in R$

Insurance Companies Specialized in Health

Group Medicine Operators

Total

Investments

3.680.102.206

1.407.122.272

5.827.242.578

Technical Provisions

4.764.215.858

655.816.166

5.436.536.629

Equity

7.803.211.618

2.356.977.659

10.957.910.408

Applications

8.417.451.516

1.306.275.306

9.830.119.981

291.586.165

21.609.883

332.997.851

Collaterals

5.083.326.558

738.807.050

5.855.528.281

Short -Term Investments

4.790.166.064

624.981.935

5.448.539.250

Accounts

Financial Result

Long-Term Investments Fixed Assets

285.089.967 8.070.528

285.093.389

113.825.115

121.895.642

Source:Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010)

Notes: 1 - Investments: Accounting Account (1321_INVESTMENTS) 2 - The calculation of technical provisions is given by: (2111_Technical Provisions of Medical-Hospital Care Operations Current Liability) + (2311_Technical Provisions of Medical-Hospital Care Operations Long-Term Liability) 3 - Equity: Accounting Account (25_ Equity/) 4 - The calculation of the Applications is given by: (122_APPLICATIONS - Current Assets) + (1311_APPLICATIONS – Non-Current Assets) 5 – The calculation of the Financial Result is given by: (3_Income) - [(4_Outcome) + (61_Profit Tax and Participation) 6 - Collaterals: Short-Term Applications Accounting Account (1221_Applications Bound to Technical Provisions)Long-Term Applications: Accounting Account (13111_Applications Bound to Technical Provisions) Fixed Assets: Accounting Account (13221_Own Use Real Estates – Bound to Technical Provisions)

128

Financial Data of the Associated with FenaSaúde in 2009

Values in R$ thousand

Income

Effective Payments

Net Payments

Events to be Indemnified

Administrative Expenses

Acquisition Costs

Known Events

Equity

Net Profit

Allianz Saúde S/A

379.837.449

366.948.634

366.939.631

283.405.665

31.578.465

29.493.466

283.311.415

108.173.677

1.514.491

Brasilsaude Companhia de Seguros

212.631.794

205.973.289

206.179.292

178.248.314

16.235.423

11.803.287

178.149.812

50.406.964

220.749

Excelsior Med Ltda

168.199.345

162.693.281

163.582.415

125.229.032

39.468.877

9.001.272

125.229.032

950.005

2.652.934

Golden Cross Assistencia Internacional de Saúde

1.483.384.163

1.460.867.209

1.466.081.185

1.224.377.617

171.502.428

91.107.556

1.224.377.617

182.930.049

Itauseg Saúde S/A

361.333.389

94.580.652

102.069.087

143.658.753

11.905.831

155.204

143.019.281

1.697.911.525

774.042

Associated

Marítima Saúde Seguros S/A

315.621.793

306.985.626

306.937.742

238.734.406

38.858.790

19.909.376

237.925.792

77.751.023

4.722.827

Medial Saúde S/A

2.163.354.352

2.133.777.648

2.136.346.813

1.732.178.455

395.278.814

138.852.946

1.731.870.570

425.532.446

(40.608.445)

Odontoprev S/A

358.517.012

344.237.314

346.054.561

132.401.751

81.417.043

40.171.036

127.879.858

780.022.159

12.718.977

Omint Serviços de Saúde Ltda

472.407.341

477.447.591

479.271.032

376.009.063

55.126.937

13.423.514

376.009.063

43.298.700

3.000.677

Porto Seguro - Seguro Saúde S/A

685.407.382

664.689.271

662.385.542

506.894.033

69.448.780

62.623.198

506.894.033

160.796.653

11.688.112

Unibanco Aig Saúde Seguradora S/A

338.154.205

328.628.807

328.575.157

289.933.746

6.335.570

19.826.306

288.761.055

66.771.131

(1.180.020)

Unimed Seguros Saúde S/A

457.369.106

445.229.277

446.515.713

412.764.482

47.641.003

23.304.230

410.672.914

75.234.121

3.115.064

Amil Grupo

4.693.748.281

4.556.979.296

4.552.623.150

3.573.671.060

679.261.931

224.093.272

Amico Saúde Ltda

1.116.295.660

1.044.321.043

1.031.942.126

793.791.462

150.758.072

60.309.369

Amil Assistência Médica Internacional

3.500.643.926

3.434.451.938

3.442.474.709

2.711.135.546

524.933.902

163.783.490

Amil Planos por Administração Ltda

76.808.695

78.206.315

68.744.052

3.569.958

414

Bradesco Grupo

3.524.203.153 1.468.831.531 793.775.834

24.103.880

293.523.106

11.782.533

2.709.205.677 1.162.798.990

10.673.954

21.221.642

12.509.436

6.758.874.829

6.024.717.757

6.072.481.641

5.222.690.774

398.461.843

238.129.461

Bradesco Dental S/A

217.835.534

207.195.558

210.386.348

121.923.364

23.428.840

13.561.741

Bradesco Saúde S/A

6.006.733.917

5.284.641.944

5.357.356.807

4.586.273.459

355.291.347

224.472.965

534.305.378

532.880.254

504.738.486

514.493.950

19.741.656

94.755

468.792.530

21.545.720

1.082.971

Intermédica Grupo

1.756.951.305

1.691.907.579

1.663.495.388

1.295.561.783

218.712.129

75.408.921

1.295.561.783

222.685.148

41.340.423

Intermedica Sistema de Saúde S/A

1.392.652.630

1.340.584.623

1.311.437.647

1.018.735.783

178.656.145

58.421.125

1.018.735.783

150.752.979

33.319.570

113.709.028

111.458.364

112.170.577

56.727.412

20.277.964

2.438.245

56.727.412

17.698.971

7.082.825

220.098.588

54.233.199

Mediservice Administradora de Planos de Saúde

Interodonto - Sistema de Saúde Odontológica Notre Dame Seguradora S/A

5.142.727.324 2.990.505.858

1.647.392

109.966.400

313.752.320

4.563.968.395 2.655.207.817

138.303.868 7.935.962 129.284.935

250.589.647

239.864.593

239.887.164

220.098.588

19.778.020

14.549.551

Sul América Grupo

5.338.009.085

4.839.650.238

4.816.287.263

3.909.501.200

347.153.374

259.489.798

3.898.241.748 2.606.109.417

130.630.271

Sul America Companhia de Seguro Saúde

1.755.294.446

1.391.630.533

1.392.181.789

1.206.600.851

80.754.385

14.244.300

1.202.309.738 1.673.160.314

99.936.863

Sul América Seguro Saúde S/A

3.041.491.708

2.919.442.395

2.927.564.571

2.207.345.460

248.140.969

245.245.497

2.200.430.022

869.812.875

32.635.113

541.222.931

528.577.310

496.540.903

495.554.889

18.258.020

495.501.989

63.136.229

(1.941.705)

Sul América Serviços de Saúde S/A

938.028

Source:Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on March 2010)

Notes: 1 – Income: Accounting Account (3_Income) 2 – Effective Payments: Accounting Account (31_Effective Payments / Earned Premiums of Healthcare Plans) 3 – Net Payments: Accounting Account (311_Net Payments/ Net Earned Premiums) 4 – Events to be indemnified: Accounting Account (411_ Events to be Indemnified/Retained Losses 5 – Administrative Expenses: Accounting Account (46_Administrative Expenses) 6 – Acquisition Expenses: Accounting Account (43_Acquisition Expenses) 7 – The calculation of the Known Events is given by: (4111_Known Events/Indemnities Reported of Medical Assistance + (4112_Known Events/ Indemnities Reported of Odontological Assistance) 8 – The calculation of the Net Profit is given by: (3_Income) - [(4_Outcome) + (61_Profit Tax and Participation)]

129

Statistics of the Supplementary Health: Care Information of the Operators Associated with FenaSaúde The differences found in the totals amongst the various statements occur due to information to

be generated by different information systems (SIP and DIOPS).

Beneficiaries by Care Coverage and Contracting Regime Old and New Plans (Oct/2009) Time and Type of the Plan Contracting

Medical Care with or without Dentistry

Exclusively Odontological

Total

230.067

5.981.848

17.717.940

895.537

5.626.578

32.492

338.676

Total

Ambulatory

Hospital (1)

Hospital (1) and Ambulatory

Reference

Not Informed

Total

11.736.092

30.529

235.825

10.311.642

928.029

Group

9.816.953

29.121

39.285

8.853.010

Individual

1.688.906

1.404

196.540

1.458.470

Not Informed

230.233

230.067

16.594

New

9.636.670

5.116

43.794

8.659.731

928.029

5.642.119

Group

8.647.738

4.922

28.242

7.719.037

895.537

5.304.568

988.932

194

15.552

940.694

32.492

337.551

Old

2.099.422

25.413

192.031

1.651.911

230.067

339.729

Group

1.169.215

24.199

11.043

1.133.973

322.010

Individual

699.974

1.210

180.988

517.776

1.125

Not Informed

230.233

162

230.067

16.594

Individual

162

Source: Beneficiaries Information System (SIB) - ANS/MS - 10/2009 9

Note: The term “beneficiary” refers to ties to the health plans, and may include several ties to a same individual. (1) It includes hospital plans with or without obstetrics.

130

Beneficiaries of Medical Care, by Care Coverage and Contracting Regime, as per Federation Units (Oct/2009) Medical Care with or without Dentistry Large Regions and Federation Units

New Total

Old

Total

Group

Individual

Total

Individual

Not Informed

Brazil

11.736.092

9.636.670

8.647.738

988.932

2.099.422

1.169.215

699.974

230.233

North

151.646

136.111

131.630

4.481

15.535

9.341

4.482

1.712

17.079

15.782

13.670

2.112

1.297

488

772

1.440

1.070

1.026

370

274

68.182

63.741

63.254

487

4.441

3.467

828

146

869

650

620

219

180

Pará

49.475

41.744

40.038

1.706

7.731

3.638

2.614

1.479

Amapá

10.561

10.143

10.085

418

360

Tocantins

4.040

2.981

2.937

1.059

934

103

Northeast

1.052.813

745.135

707.466

37.669

307.678

114.708

136.134

56.836

Maranhão

44.483

34.194

33.525

669

10.289

4.981

1.618

3.690

Rondônia Acre Amazonas Roraima

Piauí

12.778

10.087

10.019

2.691

2.118

177

396

Ceará

46.427

33.186

28.832

4.354

13.241

8.809

1.975

2.457

Rio Grande do Norte

31.101

24.602

23.776

826

6.499

3.796

947

1.756

Paraíba

22.174

18.203

17.848

355

3.971

2.743

1.191

Pernambuco

294.415

185.030

175.005

10.025

109.385

40.759

51.560

17.066

Alagoas

43.356

30.567

29.508

1.059

12.789

6.105

4.222

2.462

Sergipe

30.900

25.054

24.817

237

5.846

2.707

1.051

2.088

527.179

384.212

364.136

20.076

142.967

42.690

73.393

26.884

9.438.686

7.876.535

7.023.533

853.002

1.562.151

876.785

520.152

165.214

Minas Gerais

397.521

291.649

277.228

14.421

105.872

74.237

27.371

4.264

Espírito Santo

78.788

69.928

68.136

1.792

8.860

6.874

1.771

215

Rio de Janeiro

2.046.205

1.696.265

1.501.254

195.011

349.940

193.002

128.275

28.663

São Paulo

6.916.172

5.818.693

5.176.915

641.778

1.097.479

602.672

362.735

132.072

South

658.716

489.749

438.134

51.615

168.967

139.658

27.481

1.828

Paraná

311.906

240.219

202.091

38.128

71.687

60.532

9.730

1.425

Santa Catarina

122.876

72.325

71.575

750

50.551

48.860

1.577

114

Rio Grande do Sul

223.934

177.205

164.468

12.737

46.729

30.266

16.174

289

Midwest

434.227

389.140

346.975

42.165

45.087

28.719

11.725

4.643

Bahia Southeast

Mato Grosso do Sul

24.990

21.481

21.069

412

3.509

2.596

754

159

Mato Grosso

25.906

19.623

19.251

372

6.283

5.303

956

Goiás

114.895

105.243

92.423

12.820

9.652

7.867

1.646

139

Distrito Federal

268.436

242.793

214.232

28.561

25.643

12.953

8.369

4.321

Abroad

Not Identified Federation Unit

Source: Beneficiaries Information System (SIB) - ANS/MS - Oct/2009

Note: The term “beneficiary” refers to ties to the health plans, and may include several ties to a same individual.

131

Beneficiaries of Exclusively Odontological Care, by Care Coverage and Contracting Regime, as per Federation Units (Oct/2009) Exclusively Odontologica Large Regions and Federation Units

New Total

Old

Total

Group

Individual

Total

Individual

Not Informed

Brazil

5.981.848

5.642.119

5.304.568

337.551

2.099.422

322.010

1.125

16.594

North

80.412

74.907

73.446

1.461

15.535

5.492

Rondônia

7.737

7.619

6.161

1.458

1.297

118

Acre

1.550

1.306

370

244

35.746

33.517

33.515

4.441

2.217

736

557

219

179

28.342

26.403

26.402

7.731

1.938

Amapá

1.278

1.006

418

272

Tocantins

5.023

4.499

1.059

524

Northeast

477.017

451.973

444.243

7.730

307.678

24.675

368

Maranhão

19.069

17.060

17.057

10.289

2.009

Amazonas Roraima Pará

Piauí

4.041

3.560

2.691

481

Ceará

32.577

28.674

28.665

13.241

3.902

Rio Grande do Norte

15.178

14.419

14.418

6.499

759

Paraíba

12.377

11.186

11.184

3.971

1.191

Pernambuco

125.034

121.045

120.469

576

109.385

3.924

Alagoas

14.319

13.450

12.789

865

Sergipe

14.758

14.057

14.055

5.846

701

239.664

228.522

221.385

7.137

142.967

10.843

298

4.662.455

4.389.254

4.081.034

308.220

1.562.151

256.501

1.096

15.604

Minas Gerais

311.536

278.182

268.477

9.705

105.872

33.291

Espírito Santo

79.975

77.224

76.402

822

8.860

1.711

1.040

Rio de Janeiro

938.244

873.965

832.512

41.453

349.940

61.901

991

1.387

3.332.700

3.159.883

2.903.643

256.240

1.097.479

159.598

105

13.114

South

410.563

387.572

379.681

7.891

168.967

22.418

545

Paraná

169.163

160.226

159.557

669

71.687

8.482

430

82.689

77.578

77.563

50.551

5.087

Rio Grande do Sul

158.711

149.768

142.561

7.207

46.729

8.849

Midwest

Bahia Southeast

São Paulo

Santa Catarina

351.401

338.413

326.164

12.249

45.087

12.924

Mato Grosso do Sul

16.079

14.018

14.016

3.509

2.061

Mato Grosso

18.022

15.971

15.969

6.283

2.051

Goiás

79.115

75.551

73.633

1.918

9.652

3.542

238.185

232.873

222.546

10.327

25.643

5.270

Abroad

Not Identified Federation Unit

Distrito Federal

Source: Beneficiaries Information System (SIB) - ANS/MS - Oct/2009

Note: The term “beneficiary” refers to ties to the health plans, and may include several ties to a same individual.

132

Number of Events of the Health Attention (from 1st to 3rd quarter 2009) Type of Event

Number

Attention to Child – Hospital Live Birth Premature

6.197

Live Birth 36 Weeks

108.748

Dead Birth Hospitalization in ICU in the neonatal period Hospitalization from 0 to 5 years old for Selected Causes

313 4.870 36.671

Attention to women - Ambulatory Colpocitologic exam of the cervix uteri for the 1st Time (from 25 to 29 years old)

1.246.884

Women who Took Mammography (from 50 to 69 years old)

585.120

HIV testing in Expectant Mother

105.655

Attention to Woman - Hospital Vaginal delivery

26.479

Caesareans

88.503

Hospitalization for Hypertensive Disorder during Pregnancy, Childbirth and Puerperium

13.717

Hospitalization due to Infectious Disorder during Puerperium

10.062

Women Hospitalized for Breast Cancer

4.001

Women with Breast Cancer Submitted to Selected Procedures

3.204

Women Hospitalized for Cervix Uteri Cancer

7.214

Women with Cervix Uteri Cancer Submitted to Selected Procedures

4.560

Attention to adult and Elderly - Outpatient Department Examination for Faeces Occult Blood (from 50 to 69 years old)

53.973

Attention to Adult and Elderly – Hospital Hospitalization for Hypertensive Disease Hospitalization for Diabetes Mellitus

11.611 8.391

Hospitalization for Diabetes Mellitus - Amputation of Lower Limbs

117

Hospitalization for Acute Myocardial Infarction – Discharge for Death

104

Hospitalization for Acute Myocardial Infarction

3.475

Hospitalization for Cerebrovascular Disease

7.613

People Hospitalized for Colon and Rectum Cancer

2.920

People with Colon Cancer Submitted to Selected Procedures

1.315

Men Hospitalized for Prostate Cancer

6.811

Men with Prostate Cancer Submitted to Selected Procedures

5.442

Buccal Health Persons Submitted to Fluoride Therapy

2.160.196

Persons Submitted to Basic Periodontal Therapy (15 years old or more)

1.167.216

Tooth with Completed Endodontic Treatment

247.930

People who Received Sealants (under 15 years old)

316.399

Acute Toothache

63.234

Mental Health Patients in Hospital-Days Psychiatric Hospitalizations for Psychosis and Severe Neurosis

19.649 1.549

Source: Products Information System /ANS/MS – Dec 21st, 2009

133

Number of Events and Expenses by Modality (from 1st to 3rd quarter of 2009) Expense Item

Insurance Companies

Group Medicine

Group Dentistry

Total

Number

Expense

Number

Expense

Number

Expense

Number

Expense

Medical Appointments

19.814.406

1.090.808.198,43

24.545.295

899.006.076,62

44.359.701,00

1.989.814.275,05

Exams

55.327.514

1.635.722.516,52

50.824.547

1.219.485.600,42

106.152.061,00

2.855.208.116,94

6.635.583

333.496.368

6.404.026

368.874.508

13.039.609,00

702.370.876,52

467.670

3.823.044.490

650.244

2.838.100.920

1.117.914,00

6.661.145.410,24

Others Ambulatory Attendances

7.350.641

589.508.502,23

12.353.596

534.031.655,13

19.704.237,00

1.123.540.157,36

Other Medical-Hospital Expenses

5.755.017

171.589.554,12

2.674.944

142.335.536,69

8.429.961,00

313.925.090,81

Initial Odontological Appointments

535.056

7.397.996,55

215.770

4.248.610,24

5.792.615

5.663.685,02

6.543.440,87

17.310.291,81

Complementary Odontological Exams

557.280

6.632.929,29

390.231

4.280.989,90

7.180.469

7.702.147,04

8.127.979,99

18.616.066,23

Other Odontological Procedures

3.048.092

85.805.113

3.047.399

69.511.185

63.236.963

68.103.555

69.332.453,86

223.419.852,61

Other Odontological Expenses

244.396,82

14.149

1.106.907,81

1.172.286

1.119.720,00

1.186.484,00

2.471.024,63

99.491.308

7.744.250.065,16

101.120.201

6.080.981.989,89

77.382.333

82.589.107,15

277.993.842

13.907.821.162,20

Therapies Hospitalizations and Other Hospital Attendances

FenaSaúde

Source: Products Information System (SIP) /ANS/MS – Jan 11th,2010

Number of Events by Modality (from 1st to 3rd quarter of 2009) Item Medical Appointments 1.1 - Allergy and Immunology 1.2 - Angiology 1.3 - Cardiology 1.4 - General Surgery 1.5 - Medical Clinic 1.6 - Dermatology 1.7 - Endocrinology 1.8 - Physiotherapy 1.9 - Gastroenterology 1.10 - Gynaecology 1.11 - Hematology 1.12 - Mastology 1.13 - Nephrology 1.14 - Neurosurgery 1.15 - Neurology 1.16 - Obstetrics 1.17 - Ophthalmology 1.18 - Oncology 1.19 - Otorhinolaryngology 1.20 - Pediatrics 1.21 - Proctology 1.22 - Psychiatry 1.23 - Rheumatology 1.24 - Tisio-Pneumology 1.25 - Traumatology and Orthopaedics 1.26 - Urology 1.27 - Other Source: Products Information System /ANS/MS – Dec 18th, 2009

134

Insurance Companies

Group Medicines

Total FenaSaúde

126.647 92.275 528.822 132.326 4.927.238 830.427 397.795 8.758 246.696 1.094.949 25.616 17.867 26.162 38.226 163.642 347.461 858.485 49.861 458.056 1.020.891 49.271 103.209 74.741 96.278 898.048 269.699 6.930.960

154.177 202.630 702.174 126.689 2.870.843 879.139 581.341 55.230 373.370 1.462.751 22.168 250.333 13.990 110.268 267.368 378.170 734.345 40.731 604.293 1.587.536 53.216 151.552 118.061 128.434 1.090.884 345.895 11.239.707

280.824 294.905 1.230.996 259.015 7.798.081 1.709.566 979.136 63.988 620.066 2.557.700 47.784 268.200 40.152 148.494 431.010 725.631 1.592.830 90.592 1.062.349 2.608.427 102.487 254.761 192.802 224.712 1.988.932 615.594 18.170.667

Number of Events by Modality (from 1st to 3rd quarter of 2009) Item Examinations 2.1 - Anatomopatology and Cytopatology 2.2 - Angiography 2.3 - Ossium Densitometry 2.4 - Echocardiography 2.5 - Echocardiogram 2.6 - Airways Endoscopy 2.7.1 - Endoscopy – Upper Digestive 2.7.3 - Endoscopy – Lower Digestive 2.8 - Hemodynamics 2.9 - Holter 2.10 - Mammography 2.11 - Nuclear Medicine 2.12 - Clinical Pathology 2.13 - Radiodiagnosis 2.14 - Nuclear Magnetic Resonance 2.15 - Ergometric Test 2.16 - Computed Tomography 2.17.1 - Ultrasonography 2.17.2 - Cardiocography 2.18 - Other Therapies 3.1 - Physiotherapy 3.2 - Hemotherapy 3.3 - Extracorporeal Lithotripsy 3.4 - Chemotherapy 3.5 - Interventional Radiology 3.6 - Radiotherapy 3.7 - Substitutive Renal Therapy 3.8 - Psychotherapy 3.9 - Other Hospitalizations 4.1 - Surgery 4.2 - Clinic 4.3 - Obstetrics 4.4 - Pediatrics 4.5 - Psychiatry ICU Daily 5.1 - Neonatal 5.2 - Infantile 5.3 - Adult

Insurance Companies

Group Medicines

Total FenaSaúde

1.902.916 3.383 295.932 416.871 971.216 160.992 333.982 124.835 5.421 64.848 417.103 2.037.313 35.834.951 3.438.679 471.052 234.366 563.555 2.556.493 23.999 5.469.607

1.524.993 25.534 89.307 336.875 453.166 103.349 245.271 117.557 4.135 79.563 401.070 401.898 35.445.630 3.060.889 323.649 272.776 392.480 2.876.965 22.370 4.647.070

3.427.909 28.917 385.239 753.746 1.424.382 264.341 579.253 242.392 9.556 144.411 818.173 2.439.211 71.280.581 6.499.568 794.701 507.142 956.035 5.433.458 46.369 10.116.677

4.913.164 95.947 6.308 105.291 11.150 186.837 29.033 378.278 909.575

3.714.608 122.752 5.623 52.958 27.422 172.997 116.107 280.835 1.910.724

8.627.772 218.699 11.931 158.249 38.572 359.834 145.140 659.113 2.820.299

235.989 142.183 53.938 33.542 2.018

204.013 281.208 76.329 87.336 1.358

440.002 423.391 130.267 120.878 3.376

8.837 49.196 307.485

10.762 11.347 111.797

19.599 60.543 419.282

Source: Products Information System /ANS/MS – Dec 18th, 2009

135

Chapter VI

FenaPrevi Personal Coverage Segment

136

The Year and the Triennium Approaching the end of the three-year term of the current Board of Directors of FenaPrevi, from February 7, 2007 to June, 2, 2010, as much important as making a balance of 2009, is also to analyze, synthetically, what occurred in the last three years: 2007, 2008 and 2009. On that first year, FenaPrevi privileged, especially, the adoption of pension plans intended for extending the personal coverage penetration. Deserves to be highlighted the preparation of the proposal sent to the Government in order to allow organization and commercialization of pension plans, known as VGBL Health and Education, providing for fiscal benefits in case of use of funds to meet expenses with the health and the education of the respective holders and their dependents. It is important also to mention the studies developed in cooperation with other segments of insurance market and the government, aiming at implementing microinsurance in Brazil, to satisfy the protection needs of the less fortunate layers of the population. The analysis of the year 2008, on the other hand, refers to the international crisis, extensive to the year 2009, with impacts on the major economies over the world, of magnitude more or less serious, depending on the country. Brazil, on the basis of timely measures adopted by the Government, may be considered as a Country that was less affected by the crisis. The insurance sector, especially the personal segment, did not suffer major troubles, even presenting growth on income of premiums and contributions. Concerning the year of 2009, we need to restate three important facts. The first one, the suggestion presented to the Government, of being part of the Bolsa Família program, insurance that provides burial service rendering to the beneficiaries of the program. Such as the actions intended for implementing the microinsurance, this proposal reflects the concern by the market in universalize the mechanisms of insurance protection to all layers of the population. The second was to send to SUSEP, for analysis, technical note containing the criteria description on the preparation and updating of biometrical tables built based on the Brazilian insurance market experience. It should be also mentioned the regulation of the so-called “home/housing insurance”, with possibility of its commercialization also by insurance companies authorized to operate personal insurance, expanding the operations options admitted to such companies. The expectations are optimistic, particularly revealing promising for the segment where act the companies represented by FenaPrevi, due to the potential of diffusion of the personal coverage consumption. Such assertive is also based on the result of the studies made by the Institute of Applied Economic Research (IPEA) – “Poverty, inequality and public policies” – showing that Brazil, until 2016, is practically able to eradicate the extreme poverty (up to ¼ of minimum wage per capita) and to obtain the lowest level of income inequality since the beginning (1960), of the records made by the Brazilian Institute of Geography and Statistics (IBGE). It is expected however that the major part of Brazilians may access the microinsurance coverage, especially due to costs and premiums conditions substantially reduced. The conclusion may be that the developed actions in the period not only ensured the good performance of the sector, but, also strengthened the basis that will allow a future even more fruitful for the segment, mainly if come to be approved and implemented the proposals submitted to the Government in the triennium under comment.

Antônio Cássio dos Santos President of FenaPrevi

137

Board of Directors of FenaPrevi President Antônio Cássio dos Santos

Mapfre Vera Cruz Seguradora

Vice-Presidents Carlos André Guerra Barreiros

Itaú Vida e Previdência S/A

Francisco Alves de Souza

União Previdenciária Cometa do Brasil - COMPREV

Marco Antônio Rossi

Bradesco Vida e Previdência

Renato Russo

Sul América Seguros de Pessoas e Previdência S/A

Directors Antônio Carlos Macedo Munró

GBOEX Grêmio Beneficente

Antônio Eduardo Márquez de Figueiredo Trindade

Itaú Vida e Previdência S/A

Edson Luis Franco

Real Seguros Vida e Previdência S/A

Everson Oppermann

Luterprev – Entidade Luterana de Previdência

Fábio Ohara Morita

Porto Seguro Companhia de Seguros Gerais

Fernando Alves Moreira

HSBC Seguros (Brasil) S/A

Flávio Roberto Andreani Perondi

Santander Brasil Seguros S/A

Guido Urizio

Generali do Brasil – Cia. Nacional de Seguros

Helder Molina

Mongeral Aegon Seguros e Previdência

José Roberto Marmo Loureiro

Metropolitan Life Seguros e Previdência Privada S/A

Juvêncio Cavalcante Braga

Caixa Vida e Previdência S/A

Luciano Snel Correa

Icatu Hartford Seguros S/A

Oriovaldo Pereira Lima Filho

Previmil Sociedade de Previdência Privada

Tarcísio Godoy

Brasilprev Seguros e Previdência S/A

William Alan Yates

Prudential do Brasil Seguros de Vida S/A

138

Developed Actions In 2009 FenaPrevi kept on going, as well as in the previous year, including, but not limited to five priority actions contained in the Strategic Planning of the Federation, namely: products related to education and health – VGBL, Health and Education, Dynamic Biometrical Tables, Solvency, Microinsurance, Taxation (products and companies).

The works performed by the Technical Committees were based on the development of these actions, and also in the analysis of punctual issues related to the needs of the segment, as well as those regarding to the rules and public hearings of government agencies, particularly CNSP and SUSEP.

Statistic Data Personal Coverages Segment In 2009, the Personal Coverages Segment – represented by Pension Plans and by Personal Insurance – Risk Coverages – accounted income of premiums and contributions, R$ 52.4 billion, achieving growth of 19.4% if compared to the previous year, well above inflation. The income of the Personal Coverages was equivalent to 48% of the insurance market total income and 1.67% of GDP, following the trend of growth on the participation of the segment in GDP.

In 2009, the income of Pension Plans (Open Private Pension and VGBL), amounted to R$ 38.7 billion, and remained presenting expressive contribution at the total income of the Personal Coverage Segment, representing 74%. In the triennium 2007 – 2009, the average income was R$ 45 billion, value 41.1% above total of income premiums and contributions of 2006 (R$ 31.9 billion).

Values in R$ billion

2006

2008

2009

2009/ 2008 2009/ 2006 % Variation

22.5

28.1

31.8

38.7

21.7%

72.0%

9.4

10.6

12.1

13.7

13.2%

45.7%

Personal Coverage

31.9

38.7

43.9

52.4

19.4%

64.3%

Insurance Market

73.6

84.3

109.25

15.0%

48.4%

Participation of the Income of Personal Coverage in the Insurance Market

43%

46%

48%

2.369.8

2.661.3

3.004.9

3.143.0

1.35%

1.45%

1.46%

1.67%

General Price Index-Internal Availability (IGP-DI)

7.89%

9.10%

-1.43%

Amplified Consumer Price Index (IPCA)

4.46%

5.90%

4.31%

Income Premiums + Contributions

Pension Plans

2007

Personal Insurance – Risk Coverages

GDP (Current Prices) Participation of the Income of Personal Coverage in GDP

Source: SUSEP, BCB, FGV, IBGE

139

26%

Personal Coverages – Income in 2009 Pension Plans

74%

Personal Insurance – Risk Coverages

Pension Plans As opposed to VGBL plans, PGBL surrenders did not present sensibility as respect to the international financial crisis, keeping the behavior standard of the previous years, probably due to the fiscal aspect, where the calculation basis, instead of only the obtained income, is the total value paid in surrender.

The values of the premiums of 2009 related to the VGBL plans, R$ 30.1 billion, contributed a lot for the income of the Pension Plans (Open Private Pension and VGBL) – following the trend of the previous years – representing 78%. The value of the VGBL plans surrender in 2009, R$12.1 billion, remained capturing the sensibility of assureds as regards the international financial crisis, as much from its beginning, in September 2008, as relating to the measures implemented by the government, that kept the trust of the saver on the strength of the Brazilian economy: in 2009 the value in surrenders of these plans already captured reversion of trend, with drop of 2.4% against 2008.

The value of the accumulated provisions in the pension plans in 2009, R$ 176.6 billion, presented growth of 36.2% against 2008, with R$ 96.6 billion relative to the VGBL plans, representing 55% of the total.

Values in R$ billion

Pension Plans

Income of Premiums + Contributions

Period

VGBL

Open Private Pension PGBL

Traditional Plans

Total

2006

15.3

4.4

2.8

7.2

22.5

2007

20.2

4.5

3.4

7.9

28.1

2008

23.5

5.1

3.2

8.3

31.8

2009

30.1

5.2

3.4

8.6

38.7

2009/2008

28.1%

2.0%

6.3%

3.6%

21.7%

2009/2006

96.7%

18.2%

21.4%

19.4%

72.0% Source: SUSEP

140

9% 13%

Income â&#x20AC;&#x201C; 2009

VGBL PGBL

78%

Traditional Plans

Values in R$ billion

Pension Plans

Provisions

Surrenders

Period

VGBL

2006 2007 2008 2009 2009/2008 2009/2006 2006 2007 2008 2009 2009/2008 2009/2006

5.8 7.9 12.4 12.1 -2.4% 108.6% 41.7 57.8 70.9 96.6 36.2% 131.7%

Open Private Pension PGBL

Traditional Plans

Total

2.2 2.3 2.8 3.0 7.1% 36.4% 27.6 33.6 39.3 48.5 23.4% 75.7%

2.1 1.7 1.5 1.4 -6.7% -33.3% 27.2 29.4 31.2 31.5 1.0% 15.8%

4.3 4.0 4.3 4.4 2.3% 2.3% 54.8 63.0 70.5 80.0 13.5% 46.0%

Total 10.1 11.9 16.7 16.5 -1.2% 63.4% 96.5 120.8 141.4 176.6 24.9% 83.0% Source: SUSEP

Surrenders - 2009

Provisions - Balance in 2009

8% 18% 18%

55% 74%

VGBL

141

27%

PGBL

Traditional Plans

Personal Insurance – Risk Coverage The value of Insurance Premium intended for funding the Personal Insurance - Risk Coverages amounted to R$ 13.7 billion in 2009, the Group Life insurance, with income of R$ 7.2 billion, representing 53% of the total income.

The Credit Life Insurance, with Insurance Premium amounting to R$ 2.7 billion, represented 20% of the total income in 2009. The observed growth against 2008 of, 17.8%, reflects the measures of economic policies implemented by the government, at the end of 2008 and beginning of 2009, to face the impacts of the international financial crisis. Values in R$ thousand

Credit Life Insurance Educational Insurance Random Events Individual Life

2006

2007

2008

2009

2009/2008

1.448.6

2.052.6

2.316.0

2.728.6

17.8%

88.4%

Loss Ratio

29%

26%

25%

23%

2pp

6pp

Insurance Premium

15.4

17.4

15.7

17.1

8.9%

11.0%

Insurance Premium

Loss Ratio

83%

71%

75%

112%

37pp

29pp

Insurance Premium

345.5

399.1

383.1

364.4

-4.9%

5.5%

Loss Ratio

37%

32%

35%

32%

3pp

5pp

Insurance Premium

715.2

838.3

778.3

835.8

7.4%

16.9%

Loss Ratio

30%

29%

32%

0pp

2pp

5.480.9

5.563.3

6.385.0

7.213.4

13.0%

31.6%

Loss Ratio

57%

55%

51%

49%

2pp

8pp

Insurance Premium

0.4

0.3

0.8

1.1

37.5%

175.0%

1.183%

47%

-25%

148%

123pp

25pp

Insurance Premium

Group Life PCHV

2009/2006

Loss Ratio Insurance Premium

12.7

15.4

16.2

15.4

-4.9%

21.3%

Loss Ratio

33%

45%

34%

78%

44pp

45pp

Personal Accident – Individual

Insurance Premium

245.9

253.8

322.6

362.4

12.3%

47.4%

Loss Ratio

37%

34%

35%

1pp

2pp

Personal Accident – Collective

Insurance Premium

1.135.4

1.461.8

1.861.2

2.169.5

16.6%

91.1%

23%

19%

16%

13%

3pp

10pp

Personal Insurance – Risk Coverages

Insurance Premium

10.602.0 12.078.9 13.707.7

13.5%

45.8%

Tourism

Loss Ratio Loss Ratio

9.400.0 46%

42%

39%

36%

3pp

10pp Source: SUSEP

Gross earned premiums = insurance premium – ceded coinsurance + accepted coinsurance Loss Ratio = net loss/earned premium

3% 6%

Insurance Premium - 2009

Personal Accident (Individual + Collective)

18% 20%

Credit Life Insurance Random Events Group Life Individual Life (0%)

53%

Tourism + Educational Insurance + PCHV

142

Technical Committees Actuarial Mentors Directors: Fábio Ohara Morita (Porto Seguro Vida e Previdência S/A) and José Roberto Marmo Loureiro (Metropolitan Life Seguros e Previdência Privada S/A) President: Jair de Almeida Lacerda Júnior (Bradesco Vida e Previdência S/A) Accounting and Fiscal Affairs Mentors Directors: Marco Antonio Rossi (Bradesco Vida e Previdência S/A) President: Elizeu da Silva Souza (Real Seguros Vida e Previdência S/A) Specific Affairs of Non-profit EAPCs Interest Mentor Director and President: Francisco Alves de Souza (União Previdenciária Cometa do Brasil - COMPREV) Legal Affairs Mentors Directors: Antonio Cássio dos Santos (Mapfre Vera Cruz Seguradora S/A) and Carlos André Guerra Barreiros (Itaú Vida e Previdência S/A) President: Luiz Fernando Nascimento Bertoncello (Brasilprev Seguros e Previdência S/A) Communication, Marketing, Events Mentors Directors: Antonio Eduardo Márquez de Figueiredo Trindade (Itaú Vida e Previdência S/A) and Oriovaldo Pereira Lima Filho (Previmil Previdência Privada) President: Oriovaldo Pereira Lima Filho (Previmil Previdência Privada) Investments Mentors Directors: Juvêncio Cavalcante Braga (Caixa Vida e Previdência S/A) and Luciano Snel Correa (Icatu Hartford Seguros S/A)

143

President: Hélio Flausino Gonçalves (Santander Seguros S/A) Survival Products Mentors Directors: Edson Luís Franco (Real Seguros Vida e Previdência S/A) and Marco Antonio Rossi (Bradesco Vida e Previdência S/A) President: João Batista Mendes Angelo (Brasilprev Seguros e Previdência S/A) Institutional Relationships - National and International Mentors Directors: Antonio Cássio dos Santos (Mapfre Vera Cruz Seguradora S/A) and Marco Antonio Rossi (Bradesco Vida e Previdência S/A) Losses and Benefits President: Aparecida Lopes (Bradesco Vida e Previdência S/A) Technology / Side Mentors Directors: Edson Luís Franco (Real Seguros Vida e Previdência S/A) and José Roberto Marmo Loureiro (Metropolitan Life Seguros e Previdência Privada S/A) President: Maria de Fátima A. M. Primati (Metropolitan Life Seguros e Previdência Privada S/A) Technic-Operational of Risk Coverages Mentors Directors: Antonio Cássio dos Santos (Mapfre Vera Cruz Seguradora S/A), Helder Molina (Mongeral Aegon Seguros e Previdência S/A) and Renato Russo (Sul América Seguros de Pessoas e Previdência S/A) President: Renato Russo (Sul América Seguros de Pessoas e Previdência S/A)

Chapter VII

FenaCap The Capitalization Segment

144

The Capitalization Segment The activity of the capitalization bonds sector has proved to be fruitful and has attending the socioeconomic functions of this important instrument, aimed basically for the formation of financial savings, even from the standpoint of individual agents and the savings national fund. The capitalization bond stands for the stability of its demand, which has proved to be resistant to all movements of crisis in the global economy and the repercussions of such movements in the economy and national financial system. This persistence may only in fact contribute to the prominence of the capitalizing bond on its primary function. This does not mean however that the innovation of companies in the sector is inhibited. Indeed, companies have introduced new products, all introduced successfully in the market. FenaCap searches to contribute to the dissemination of the sector and the good understanding by the public on the socioeconomic function of capitalization bonds. And it engaged for this purpose quite particularly in the year 2009. While in 2008 we focused on the goals and commitments of the sector, with special highlight the development of the first strategic plan and the publication of the Guide of Best Practices, in the past year we developed a qualitative research on perception of the capitalization bond, which will serve as basis for the communication plan, which is already being prepared, and review of strategic plan of the sector; we performed, also, the first seminar on capitalization bonds, occasion where were approached several aspects of the sector and presented prospects of use for the capitalization bond in new situations and as support instrument, for example, to the microinsurance. It should also be highlighted the proposal to develop statistical indicators of the sector, much larger than the simplest indicators already released and that we expect to see introduced during the year 2010. The federation will continue contributing to the sector, according to the goals of its institutionalization and will seek always to serve the market, since it is dedicated to the improvement of the sector and, more especially, to the identification of ways and paths so that this sector may contribute positively to the formation of financial savings and thus, to the development of the national economy

Ricardo JosĂŠ da Costa Flores President of FenaCap

145

Board of Directors of FenaCap President

Company

Ricardo José da Costa Flores

Brasilcap Capitalização

Vice-Presidents Carlos Infante Santos de Castro

Sul América Capitalização

Mauricio Maciel da Rocha

Caixa Capitalização

Natanael Aparecido de Castro

Brasilcap Capitalização

Norton Glabes Labes

Bradesco Capitalização

Director Aline Ferreira Coropos

Cia Itaú de Capitalização

Carlos Ferreira D´Azevedo Neto

Aplub Capitalização

Edson Luis Franco

Santander Capitalização

Gustavo Pimenta Germano Santos

Icatu Hartford Capitalização

Ronaldo Cosme Gonçalves Ferreira

Liderança Capitalização

Fernando Moreira

HSBC Empresa de Capitalização – Brasil

Executive Director of FenaCap Helio Oliveira Portocarrero de Castro

Institutional Action of FenaCap in 2009 Action Plans Communication Plan The working group on communication advanced at the development of a plan for the whole sector, taking into account the modality diversity of capitalization products established by SUSEP Circular 365/08. The basic instrument to complement and implement the plan is the qualitative research made during 2009 by IDS. As we concluded that the communication issue has a permanent character, besides the development of a sole plan on time, which must be periodically maintained and reviewed, the Board of Directors of FenaCap must examine the hypothesis of building a Committee on Communication that would substitute permanently the current WG on Communication. Research The research was primarily understood as instrument of support for the Communication plan, but soon we concluded that the analysis

FenaCap

of its results surpasses the specific objective and must be used as element for development of the new strategic plan of the sector, which should be programmed for the first quarter of 2010. Indicators Project The working group formed under the Committee on Coordination and Products, prepared a proposal for presentation of statistics indicators for the sector. The proposal was approved and, during 2009, it was tried to verify possibilities to make the projects operational, to be incorporated to the general project of CNSeg, intended for statistic indicators and it is expected that it will be implemented soon.

FenaCap and the Market Regulation Monitoring proposal of changes of the sector regulation This is a permanent activity of the federation and, in 2009, we presented to SUSEP a proposal of changes in the Circular 365/08, the most recent paper related to the sector regulation. During all the year, we monitor the analysis of the subject matter.

146

capitalization bond, the federation, together with some associated companies sponsored the I Seminar on Capitalization promoted by the Brazilian Institute of Economy (IBRE) and by the magazine Conjuntura Econ么mica, from Get煤lio Vargas Foundation (FGV) in October of 2009. The seminar was succeeded, covering some of the major topics on capitalization operation and turned to a selected public.

The Actuarial Committee of the federation is developing study addressed to the simplification of the parameters and general conditions standardized to ease the analysis by the regulator. Regulatory Milestone It is consensus among directors of the federation about the need of a new regulatory milestone for the sector, in order may be explored all the potentialities of growth and full utilization of the mechanisms that the financial instrument, capitalization bond, can provide.

Statistics of Capitalization in 2009

Microinsurance The Board of Directors of FenaCap is convinced that the capitalization might have very good interactions with the microinsurance development on the country. Therefore, the federation has been monitoring the evolution of the subject matter. The federation is represented at the Internal Group on Microinsurance of CNSeg, as well at the Advisory Committee of CNSP, constituted to propose regulatory acts about the implementation of microinsurance in Brazil.

The capitalization market is operated by incorporated companies, with nominative shares, and authorized to operate by act of the Ministry of Finance, after analysis of the Superintendence of Private Insurance (SUSEP). In 2009, 11 companies authorized to commercialize bonds at the Brazilian market accounted the amount of R$ 10.1 billion, representing growth of 12.1% over the 2008 production. The equity of companies of the sector grew 53.16%, achieving the amount of R$ 5.9 billion, as shown in the table below.

Educational Action Seminar about Capitalization Aware of the need to deepen the knowledge of economic and social role played by the Data from the Capitalization Segment Accounts

Values in R$ thousand

%Variation 2009/2004

%Variation 2009/2008

2004

2008

2009

Income

6.601.776

9.013.898

10.104.143

53.05%

12.10%

Technical Provisions

9.143.538

13.444.561

14.937.575

63.37%

11.10%

Equity

2.727.249

3.835.984

5.875.192

115.43%

53.16%

In 2009, the total of payments made by bonds surrenders and drawings reached the amount of R$ 8.1 billion, against R$ 7.4 billion in 2008. Values in R$ thousand

2004

2008

2009

%Variation 2009/2004

%Variation 2009/2008

4.928.350

6.976.863

7.584.426

53.89%

8.71%

Expense with Bonds Winning

297.264

441.758

515.855

73.53%

16.77%

Acquisition Costs

379.580

509.388

574.906

51.46%

12.86%

*Administrative Expenses

558.209

470.918

516.772

(7.42)%

9.74%

Accounts Expense with Bonds Surrendered

* Includes Administrative Expenses, Expenses of Taxes and Other Operational Incomes and Outcome

147

Participation of the Capitalization in the Brazilian GDP GDP, according to the data divulged by SUSEP and IPEADATA.

With a 0.32% index, achievement of a slight increase during 2009, the percentage relative share of the capitalization against the Brazilian Income from Capitalization against GDP Year

*Income (R$ million)

GDP (R$ million)

GDP Share (%)

2004

6.602

1.941.498

0.34%

2005

6.910

2.147.239

0.32%

2006

7.111

2.369.484

0.30%

2007

7.829

2.661.344

0.29%

2008

9.014

3.004.881

0.30%

2009

10.104

3.143.015

0.32% Source: SUSEP and IPEADATA

* Income with Capitalization Bonds

Capitalization and Inflation growth due to the accumulated inflation from 2004 to 2009, as shown in the table below.

Even facing a year of general crisis in the economy, capitalization kept the trajectory of actual Income x Inflation Income Growth Insurance Market (*) Accumulated Growth Capitalization Segment Accumulated Growth IGPM â&#x20AC;&#x201C; Accumulated Index Annual Growth Accumulated Growth

Values in R$

2004

2008

2009

59.706.216.181

95.076.109.116

109.252.735.236

59.2%

83.0%

6.601.776.193

9.013.898.082

10.104.142.922

36.5%

53.1%

100

124.34

122.20

12.42%

9.81%

-1.72%

24.34%

22.20%

Source: SUSEP, ANS and IGP - M/FGV (Suma EconĂ´mica)

* DPVAT: From 2009, there was a change of accounting criteria, and the premiums have been reporting net of transfer to the SUS

and DENATRAN (50% of premiums). Thus, for purposes of comparison, this adjustment was made in the 2008 numbers. This same adjustment however was not made in the 2004 numbers.

148

Technical Committees Products and Coordination Goal: To coordinate the multidisciplinary technical issues, themes and works, developed by components of different Technical Committees. President: Rita R. Batista Moço - Bradesco SA Capitalização S.A.; Mentor: Ronaldo Cosme Ferreira Gonçalves Liderança Capitalização S.A.

President: Danilo Campos – Cia Itaú de Capitalização S/A Mentor: Maurício Maciel da Rocha – Caixa Capitalização S.A.

Legal of the Capitalization Goal: To monitor the legal subject matters related to Capitalization. President: Simone Ayub Moregola – Liderança Capitalização; Mentor: Carlos Infante Santos de Castro – Sul América Capitalização S.A.

Capitalization Management and Finances Goal: To perform studies for adequacy of the chart of accounts and the FIP to the capitalization operations. President: João Augusto Santos Xavier – Caixa Capitalização S.A.

Information Technology of the Capitalization

Actuarial on Capitalization

Goal: To monitor ongoing subject matters in the IT field, to adopt improvements in the FIP and to monitor the indicators project of the capitalization market. President: Carlos Augusto Pestana – Brasilcap Capitalização S.A.

Goal: To perform studies for changes of the Standard Plan of CAP and of the adequacies to be made in the FIP with respect to the capitalization operations. President: Anna Paula Nardi de Almeida – Sul América Capitalização S.A.; Mentor: Natanael Aparecido de Castro – Brasilcap Capitalização S.A.

WG on Communication Goal: To develop Plan of Institutional Communication of FenaCap. Coordinator: Roberto Sábato Cláudio Moreira Jr. – Brasilcap Capitalização S.A.

Internal Controls of Capitalization Goal: To study SUSEP regulations on the subject matter and to promote the sector development under the capitalization companies.

Name

Number of Meetings

Number of Members

Number of Guests

Legal Committee

Actuarial Committee

Committee WG on Communication

Committee on Products and Coordination

Committee on Management and Finances

Committee on Internal Controls

Committee on Information Technology

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Coordination and Implementation Coordination and Graphic Design

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