Annual Report Social Balance Sheet 2010 by CNseg

Brazilian Insurance Industry

Annual Report Social Balance Sheet

2010

Index Presentation

4 Great and New Challenges 6 Itaipava Letter

11 12 16 19 25

Chapter I Regulation and Supervision, Institutional Representation and Education Bodies of the Brazilian Insurance Industry National System of Private Insurance Supplementary Health System Institutional Representation of the Insurance Market National School of Insurance

Chapter II

29 30 30 33

The Brazilian Insurance Market New Concept Operation Structure by Segments, Groups and Branches Data from the Market Operations

Chapter III 41 42 55 58 59 71 74 76 81

CNSeg – The Institutional Representation of the Insurance Market National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg) Executive Board of Governmental Affairs Superintendence of Management and Finances Superintendence of Institutional and Consumer Affairs Superintendence of Communication and Events Legal Superintendence Technical Superintendence Central of Services and Protection to Insurance

Chapter IV

91 FenSeg – The General Insurance Segment 92 The Good Expectations of the General Insurance

Chapter V

111 FenaPrevi – The Personal Coverage Segment 112 The First Months of the New Management

Chapter VI

125 FenaSaúde – The Supplementary Health Segment 126 A Year of Important Achievements

Chapter VII

147 148

FenaCap – The Capitalization Segment In Constant Innovation

Chapter VIII

157 158

DPVAT – The Insurance of the Traffic A Brazilian Achievement

Social Balance Sheet 2010 167

Social Balance Sheet – General Insurance, Private Pension and Life, Supplementary Health and Capitalization Market

Presentation

Great and New Challenges The year 2010 was marked by great and new challenges for the Brazilian insurance industry. More than that, it pointed out the guidelines in order that we may pursue the sustainable growth of the market during the next years, reaffirming its importance for the socioeconomic development of the Country and increasing the dialogue channels with the society in general. We are indeed living a new era, where the more efficient exchange with the consumer becomes the significant guide for the insurance segment. The year in which was celebrated the 20th anniversary of the Consumer Protection Code was also the first of acting of the Committee on Consumption Relations, created by CNSeg, and also of two conferences held whose discussions aimed at achieving the improvement of the approach and communication with the consumer. This position could not be different, when we extended the discussion about the real possibilities for growth of the insurance industry before new scenarios that have been built in the country. The rise of the C and D classes should introduce more than 100 million of consumers within the market, who need to know and to learn about the insurance culture. The challenge, now, is to create more simple and suitable products to this public. It means to open new distribution channels and to invest in the adoption of financial education programs that motivate people to conscious and ethical consumption, essential base for establishing the habit for savings. The economic progress of the more popular classes, combined with other issues, made a positive impact on the market segments. In 2010, all portfolios grew and the insurance market ended the year with cash flow of around R$179.3 billion, representing a 12.78% growth if compared to 2009 and achieving a 5.05% participation of the Brazilian Gross Domestic Product (GPD). As significant as to present the market bottom line, is to be aware of the volume of payments effected by the insurance companies to society through indemnities,

surrenders and benefits. The Social Balance Sheet attached to this Report, an important indicator of the social role performed by the companies, shows very relevant numbers. It reveals that there has also been an expressive growth in the investments made by the companies in the human resources segment and social responsibility actions. These results confirm that we are increasingly committed to operating as great generators of benefits to the society. In 2010, the strength union amongst the major representatives of the market was decisive to prevent that the plan to create a state-owned insurance company would come through. CNSeg acted with determination and gave evidence of its importance as reference in the dialogue with the market, the society and the Government, in protecting the interests of the market and associates. In the next years, growth of the insurance industry and its contribution to the national economy will be even greater. The World Cup in 2014, the Olympics in 2016 and the works of the Growth Acceleration Program (PAC) should stimulate the guarantee insurance segment and turn Brazil into the market of greatest businesses perspectives for the insurance companies around the world. In order that we may consistently take advantage of all the opportunities that arise it is necessary to work hard aiming at improving our products, practices and relationship with the target public. Generate knowledge, valorize the market importance and always dialogue with the society will be the aims that we will pursue during this long journey, so that to accomplish the mission and the goals set forth in the Itaipava Letter. The continuous effort to create a national insurance policy is associated to that. We are full consciousness of the many challenges and troubles we will face, but there is any doubt whatsoever that we are on the right way. Jorge Hilário Gouvêa Vieira President of CNSeg

Itaipava Letter The Executive Board of the National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg) met in Itaipava, Rio de Janeiro, discussed its identity and aims, defining the goals that reflect the Market needs translated into actions which, under the President management, will lead the Confederation to the guide intended for, namely: 1. It is Mission of CNSeg to promote the development of the General Insurance, Private Pension and Life, Supplementary Health and Capitalization Market, aiming at satisfying the Brazilian citizens needs, by supporting and strengthening of its Associates, representing them before Society and Government; 2. In the accomplishment of its Mission, CNSeg, as the most important representative entity, is liable for coordinating the actions of its Federations and unifying its interests before Society, Government and, especially, regulatory agencies of the Market; 3. The CNSeg action aims: a) The increasing participation of the Market in the Brazilian economics; b) The promotion of the Insurance, Private Pension, Supplementary Health and Capitalization in all of their aspects, making clear to Society its role as promoters of the development, representatives of the progress and participants of the future; c) The incentive and use of Practices and Behaviors that distinguish the Market; d) The inclusion of new consumers for products and services of the Market, especially by supporting to the development of new insurance coverages and new operational patterns; e) The promotion to research and to generation of knowledge in the Market, establishing partnerships with the National School of Insurance and other Education Centers in Brazil and Abroad, for the knowledge development actions and political, social and economical use of products and services by its Associates and Affiliates; f) The cooperation with the regulatory agencies, with the purpose to improve the Regulatory Milestone of the Market, particularly in seeking its simplification and consequent reduction of costs, for the benefit of the consumer; g) The development of studies and maintenance of databases for shared use by its Associates and Affiliates; h) The systematic prevention and fight against the abuse and fraud in operations of the Insurance Industry; i) The identification and facing of the inhibitor factors to growth of the Market; j) The strengthening of the Market in all of its segments, considering the plurality of the companies that operate in such sector. 4. For the attainment of its objectives, CNSeg shall seek the professionalization of its management, implementing immediately the following measures: a) Modify its Articles of Incorporation in order to change the current Executive Board into a Board of Directors; b) Create, in its structure, the position of Executive Director subordinate to the President of CNSeg, who will be in charge of putting into effect the operations of CNSeg.

5. In the next three years, the current Management of CNSeg shall: a) Promote clarification programs, for the public in general, of products and services offered by the Market; b) Develop campaigns to valorize the mark “SEGURO” before Society, determining CNSeg as the representative body of the Market; c) Carry out studies aiming at proposing amendments to Market Law, mainly as regards the review of the Decree-Law no. 73/66; d) Consolidate the Council of Ethics as supervision body for complying with the standards of ethical behavior by the Associates and as precursor environment for the self-regulation of the Market; e) Review the structure of management of the Central of Services, aiming at expanding and improving the services provided to Associates and its Affiliates; f) Implement, in its structure, the creation of a development sector for supporting its own initiatives and those of its Associates and Affiliates. g) Support the agri-business, financial and environmental risks management, by developing the Rural Insurance, Credit and Guarantee Insurances, and Environmental Insurances, substituting the Government in the analysis, underwriting and supervision of such risks, calculating previously their probable extents and indemnifying their actual effects; h) Participate in the initiatives whose purpose is to implement the Microinsurance; i) Review the standard of state representation of the Confederation; j) Establish an internal program for the development of its staff. Due to the importance of this meeting, the Principals of CNSeg who attended the event of Planning sign this document so-called “Itaipava Letter”, where are listed the major milestones approved. Itaipava, RJ, August 21st, 2010.

Jorge Hilário Gouvêa Vieira Patrick Antônio Claude de Larragoiti Lucas Jayme Brasil Garfinkel Marcio Serôa de Araujo Coriolano Marco Antonio Rossi Ricardo José da Costa Flores Antonio Cássio dos Santos Nilton Molina Alexandre Malucelli

Antonio Eduardo M. de Figueiredo Trindade Luis Emilio Maurette Luiz Tavares Pereira Filho Mário José Gonzaga Petrelli Paulo Miguel Marraccini Pedro Cláudio de Medeiros B. Bulcão Pedro Pereira de Freitas Pedro Purm Junior Renato Campos Martins Filho

Annual Report

2010 9

Chapter I

Regulation and Supervision, Institutional Representation and Education Bodies of the Brazilian Insurance Industry 11

National System of Private Insurance The National System of Private Insurance is composed by the National Council of Private Insurance (CNSP), the Superintendence of Private Insurance (SUSEP) and the companies with authority to operate with private insurance, reinsurance, capitalization, open private pension entities, also including the insurance and reinsurance brokers, as provided for the Decree-Law no. 73, dated November 21st, 1966, subsequently amended by the Decrees-Law nos. 296/167 and 168/1967, Laws nos. 10.190/2001 and 8374/1991 and Complementary Laws nos. 126/2007 and 137/2010. The planning for the private insurance policy, the establishment of its rules and the supervision of the operations in the Brazilian market are under exclusive authority of the Federal Government.

National Council of Private Insurance (CNSP) The National Council of Private Insurance is composed by the Minister of Finance, who chairs it, the Superintendent of SUSEP and the representatives of the Ministry of Justice, Ministry of Social Security, Brazilian Central Bank and Securities Commission. It may be highlighted the following activities under exclusive authority of the CNSP:

• Regulate the constitution, organization,

operation and supervision of those who perform activities subordinate to the National System of Private Insurance, as well as the application of sanctions provided for; • Determine the general characteristics for the insurance, open private pension, capitalization and reinsurance agreements; • Establish the general guidelines for the reinsurance operations;

• Be aware on the appeals against decision of SUSEP;

• Set forth the constitution criteria of the

insurance, capitalization, open private pension and reinsurance companies, stipulating the legal and technical limits of the corresponding operations;

• 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 is a collective body, part of the basic structure of the Ministry of Finance, established in October, 1998 by the Provisional Presidential Decree-1689-5 that amended the Law no. 9.649 of May from the same year. Its purpose is to try, in last administrative instance, the appeals against decisions of SUSEP. CRSNSP is composed by six effective members, and their deputies, being one representative of the Ministry of Finance, as President, one representative of SUSEP, one representative of the Secretariat of Economic Law of the Ministry of Justice, one representative of FENASEG, one representative of FenaPrevi and one representative of FENACOR. A Counsel to the Federal Treasury also acts in the CRSNSP, holding a position on the appeals and providing legal assistance to the President of the Council in the decisions. The meetings of the Council are public and require the quorum of, at least, two-thirds of its members.

Superintendence of Private Insurance (SUSEP) The Superintendence of Private Insurance is an Autarchy bound to the Ministry of Finance, whose duty is to regulate and to supervise the markets of insurance, open private pension, capitalization, reinsurance and the qualified Brokers.

create ways for improving the corporate governance of entities of the sector. Amongst such changes, it may be highlighted the implementation of a supervision based on risk and the introduction of new solvency rules for the market.

It is managed by a Board of Directors, composed by the superintendent and four directors. The Board is also formed by, without voting right, the Secretary-General and the Attorney General. The Board is liable for establishing the general policies of the Autarchy, aiming at organizing the activities of the market; complying with and enforcing the CNSP resolutions; and approving instructions, circulars and opinions of guidance on matters under its authority.

The normative proposed by SUSEP and approved in the CNSP that amend several questions related to the financial strength of the market supervised are amongst the important measures taken in 2010. One of the resolutions approved by the CNSP refers to the modernization of some rules in regard to the criteria for investments by the insurance, private pension, capitalization and reinsurance companies. As set forth in the text, operations with derivatives are permitted only to protect the portfolio.

The superintendent chairs the Board, whose duties are also to perform the management acts of the Autarchy and its representation before Government and society. The superintendence of SUSEP has been chaired up to April, 2010 by Armando Vergilio dos Santos Junior, who resigned the position to run for election for the Chamber of Deputies, being substituted by Paulo do Santos. In December, 2010, the composition of the Board of SUSEP was the following: Superintendente

Paulo dos Santos

Diretor Técnico

Alexandre Penner

Diretor de Autorizações

Murilo Matos Chaim

Diretor de Fiscalização

Paulo Roberto Fleury Araújo

Diretora de Administração

Vera Lucia Ribeiro Barreto Paes

Secretário-Geral

Eduardo Hitiro Nakao

Procurador-Geral

Luciano Portal Santanna

In the last three years, SUSEP has been carrying out relevant changes in its regulatory performance, aiming at being in accordance with the best international practices of control and supervision of the insurance market, in order to promote transparency and to

Oriented by the lessons from the 2008 financial crisis, all the operations with derivatives became to be filed in systems of record and financial settlement of assets authorized by the Brazilian Central Bank and the Securities Commission, being prohibited to carry out operations in the modality “without collateral”. Other normative published refers to the capital requirements with the purpose of solvency. According to the international practices of supervision, from January of 2011 all the insurance companies must have additional capital to cover credit risks, also existent in reinsurance and retrocession operations that are tools used by the insurance companies to risks transfer. The exposition to real estate has been limited, at the same time that it has been sought to exclude intangible and other assets such as works art and precious stones. In 2010, the insurance market presented a 17.58% growing compared to 2009, overcoming easily the Brazilian GDP oscillation. The Country has been also working to introduce the microinsurances, 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 insurances. In March of 2010, SUSEP founded the Permanent Special Committee, joining the high direction of the Autarchy and the main leaders of the market, with the purpose to analyze the economic moment of the insurances and to propose alternatives to increase the growth and development of the supervised markets. In December of the same year, the Board of SUSEP approved the Strategic Planning for the period from 2011 to 2015, with the main definitions to achieve, at the end of this period, the view of future “to be recognized by excellence in the supervision and promotion of the markets supervised”.

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 its tasks. Add to 34 new commission-paid positions, this will strengthen the performance of SUSEP before insurance consumers and people in general, according to statutory provision associated with the hiring of 136 new servants through competitive civil-service examination, who have taken office during the period from October to December, 2010. The major changes made include the extinction of former Departments and the creation of eight General Coordination Offices,

streamlining, better structuring and distributing the technical and occupational activities performed so far. The four Directions, which in the previous model had not direct hierarchical bound with the technical sectors, became legally liable for specific duties and authorities, separated into the segments of Supervision, Technical, Authorization and Management, as follows:

• In the Direction of Authorizations (DIRAT) are allocated the General Coordination Offices of Registration and Authorizations (CGRAT) and of Products (CGPRO);

• In the Technical Direction (DITEC) is the

General Coordination Office of 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 General Coordination Office of Direct Supervision (CGFIS) and the new General Coordination Office of Trials (CGJUL), where it will be administered and tried all the sanctioning administrative processes;

• In the Direction of Management (DIRAD), are the General Coordination Offices of Management, (CGADM), of Planning (CGPLA), and of Information Technology (CGETI);

• In the structure of the Cabinet, reporting

directly to the Superintendent, were the Internal Audit, the Disciplinary Body, the Federal Attorney’s Office bound to SUSEP and the General Office, which embodied the Customer Service, expanded in this new model with the purpose to provide best service to the insurance consumer and the people in general.

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

Supplementary Health System The Law no. 9.656/98 defines Health Care Plan Provider as the Legal Entity constituted under the modality of civil association or business corporation, cooperative or selfmanagement entity, operating product, service or contract for continued 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, by the faculty of access and service by health practitioners or services, freely chosen, part or not of the accredited, agreed or referenced network, aiming the medical, hospital and dental care, payable fully or partially at the expense 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 contract of group plans as offeror 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 active and retired employees, pensioners and former employees and corresponding 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 civil

society of persons, constituted as set forth in the Law no. 5.764/71 (General Law of the Cooperatives), that operates private health care plans;

• Dental Cooperative: non-profit civil society of persons, constituted as set forth in the Law no. 5.764/71 (General Law of the Cooperatives), that operates exclusively dental plans;

• Philanthropy: non-profit entities that

operate private health care plans and that obtained Certificate of Philanthropic Entity issued by 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 in the previous modalities;

• Group Odontology: companies or entities that operate solely dental plans, unless those classified in the previous modalities;

• Specialized Health Insurance Company:

insurance companies authorized to operate health insurance, in its Articles of Incorporation whereof should prohibit the operation in any other lines of insurance. In 2001, the Law no. 10.185 required the insurance companies that have already operated in the health insurance segment would change into specialized insurance companies, becoming subject to a new regulatory and supervision structure bound to the Ministry of Health, jointly with other modalities of private health plans operators.

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, the Council of Supplementary Health is collective 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, as Secretary of the meetings. The authority of CONSU 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 set general guidelines for the constitution, organization, operation and supervision of the products’ operators companies referred to in the Law no. 9.656/98;

• To deliberate on the creation of technical chambers, of advisory nature, 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 governed by special regime, bound to the Ministry of Health. Its mission is to promote the defense of the public interest in 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 the supplementary health sector;

• To establish quality and coverage

parameters and indicators in health care for the services provided by the operators themselves and those provided by third parties;

• To establish standards of 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 compliance 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 determined jointly by the Ministry of Finance and the Ministry of Health;

• To promulgate rules and standards to

send economic-financial information by the operators, aiming the ratification of the readjustments and reviews;

• To supervise the activities of the operators of private health care plans and to oversee that the rules relevant to their operation are being complied with;

• To become joined to the consumer

protection bodies, aiming the effectiveness of the protection and defense of the consumer of private health care services, complying with the set forth in the Law no. 8.078, dated September 11th, 1990.

Supplementary Health Chamber (CAMSS) Advisory nature body of the structure of ANS, 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:

• the CEO of ANS, or his/her deputy, as President;

• one Director of ANS, as Secretary; • one representative of the following Ministries: Finance, Social Security, Work and Job, Justice, and Health;

• one representative of each body and

entity as follows: 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 the National Federation of Health (FenaSaúde); Brazilian Medical Association;

companies; dental services cooperatives that operate in the supplementary segment;

• two representatives of the following entities: consumer protection, associations of consumers of private health care plans, entities of people with special needs and pathologies.

Collegiate Executive Board

• one representative of each entity as follows:

The decisions in the ANS are made by the Collegiate Executive Board, whose composition in December, 2010 was the following:

self-management segment of health care; group medicine companies; medical services cooperatives that operate in the supplementary health; group odontology

Maurício Ceschin

Eduardo Sales

Leandro Reis Tavares

Chief Executive Officer

He joined ANS in November, 2009 when he has taken position as Director of Sectorial Development. In April, 2010 he became to accumulate the position as CEO, succeeding Fausto Pereira dos Santos.

Director of Products Rules and License

Since Augus, 2010, succeeding Alfredo Luiz de Almeida Cardoso.

Director of Supervision

In July, 2006 he has taken the first term as Director of Supervision, to where he returned in August, 2010 for his second term.

Acting Director of Management

Since October, 2010, succeeding Hésio de Albuquerque Cordeiro.

Director of Operators License Rules

He joined ANS in November, 2009 when he has taken position as Director of Supervision, where remained up to August, 2010 when became holder in the position as Director of Operators Rules and License.

Acting Director of Sectorial Development

ANS Organization Chart PRESI - Presidency DIFIS

SECEX – Executive Secretariat

DIPRO

DICOL – Collegiate Executive Board OUVID

DIOPE

DIDES – Direction of Sectorial Development

AUDIT DIGES

DICOL

DIOPE – Direction of Operators Rules and License DIFIS – Direction of Supervision

ANS

PPCOR

ORG. VINC.

DIDES

DIPRO – Direction of Products Rules and License SEGER – Secretariat General Related Bodies

PROGE

Bound Bodies OUVID – Ombudsman Service

SEGER

PRESI

CEANS

AUDIT – Internal Audit PPCOR – Disciplinary Body

CAMSS SECEX

DIGES – Direction of Management

PROGE – Federal Attorney’s Office in the ANS CEANS – Committee on Ethics CAMSS – Supplementary Health Chamber

Institutional Representation of the Insurance Market National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg)* CNSeg, established in August, 2008, is an entity of associative nature, while Fenaseg remains as higher level representation entity, of trade union nature, associated to the National Confederation of the Financial System (CONSIF). The action of CNSeg aims at:

•

• The increasing participation of the Market in •

• •

•

the Brazilian economics; The promotion of the Insurance, Private Pension, Supplementary Health and Capitalization in all of their aspects, making clear to society its role as promoters of the development, representatives of the progress and participants of the future; The incentive and use of practices and behaviors that distinguish the Market; The inclusion of new consumers for products and services of the Market, especially by supporting to the development of new insurance coverages and new operational patterns; The promotion to research and to generation of knowledge in the Market, establishing

• • • •

partnerships with the National School of Insurance and other education centers in Brazil and abroad, for the knowledge development actions and political, social and economical use of products and services by its associates and affiliates; The cooperation with the regulatory agencies, with the purpose to improve the Regulatory Milestone of the Market, particularly in seeking its simplification and consequent reduction of costs, for the benefit of the consumer; The development of studies and maintenance of databases for shared use by its associates and affiliates; The systematic prevention and fight against the abuse and fraud in operations of the insurance industry; The identification and facing of the inhibitor factors to growth of the Market; The strengthening of the Market in all of its segments, considering the plurality of the companies that operate in such sector. * Full Report on Chapter III

National Federation of General Insurance (FenSeg)* FenSeg is intended for developing specific activities of the lines of insurance whose segment is referred to as “general insurance”. Its purpose is to bring together and to represent its associates, even before Government, seeking to strengthen the economic segments it represents and its relations with society, so that to contribute to the economical and social development of the Country. Its purposes are the following:

• Exercise the political and institutional

representation of the general insurances segments;

• Promote the permanent defense of the

interests of the segment represented in the market, government, institutions of the civil society and further entities; • Represent the associates judicial or extrajudicially; • 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;

• Establish and implement policies aiming

• Promote the disclosure of the sector actions

• Support and develop actions in order to

• Promote and hold events; • Form and coordinate Technical Committees

the market development, in the scope of its operations; put into effect public and private policies of interest by the represented sector;

• Promote the integration amongst the associates; • Indicate or nominate representatives in the public and private agencies, in the scope of its operations;

• Develop research and projects, in the scope of its operations;

• Develop program for training, qualification and professional certification;

• Divulge relevant information to the

and produce material for disclosure and enhancement of the institutional image;

and Working Groups;

• Enforce the Code of Ethics and put into effect self-regulation actions;

• Meet the requests made by its associates to guide initiatives or arrangements related to the performance of their own activities;

• Create and keep the required structures in order to achieve their goals and meet the associates needs.

* Full Report on Chapter IV

associates on topics about its operations;

National Federation of Open Private Pension and Life (FenaPrevi)* FenaPrevi is a non-profit civil association that congregates and represents companies and entities that compose the segments of open private pension and life acting in the country, in addition to similar or fellow institutions that operate in the regional or national scope. In December of 2010, FenaPrevi counted on 79 permanent associates, amongst them, 64 insurance companies and 15 non-profit open private pension entities. We present below the View, the Mission and the Values of FenaPrevi: View of Future Being an independent institution, recognized and valued by the associates, market and community, contributing for the personal insurance and private pension segments. Mission Contribute for developing of the personal insurances and private pension segments, representing institutionally its associates within the regulatory bodies, market and community. Values • Focus on the Associates: perform actions in consonance with strategic interests, listening

to and respecting their needs and analyzing their impacts in the companies;

• Continuous Excellence: work focused on strategic goals, creating alternatives that bring tangible benefits and results to the associates;

• Transparent Communication: make

available information that add value, working seamlessly with the associates and community;

• Teamwork: develop actions jointly with

the associates, respecting differences and interests of the sector;

• Respect for Diversity: develop and sponsor actions that respect and valorize the individual and cultural differences;

• Ethics: preserve our values, through

rectitude as independent institution, aiming the associates and community interests;

• Commitment to Community: build credibility by means of responsible action and in concert with the values of FenaPrevi;

• Innovation and Creativity: develop

innovative and creative solutions for the sector challenges. * Full Report on Chapter V

National Federation of Supplementary Health (FenaSaúde)* The President Marcio Serôa de Araujo Coriolano took position in the Federation in March, 2010, succeeding the then President Heráclito Brito de Gomes Junior, for a term that will end in 2012. 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, stimulating discussions on sector challenges and identifying effective solutions for the market expansion. The entity shoulders the mission to make society conscious on the importance of the supplementary health for Brazil. This is the summary for the goals of FenaSaúde, entity established in February of 2007, with principal business office in Rio de Janeiro. The supplementary health segment faces huge challenges. On the one side, there is a long regulatory agenda by the ANS, what requires attention in respect of the several provisions that may affect seriously the market. On the other side, in health it may be noted an increasing inclusion of new technologies, intended by people and with relevant impacts on the costs. FenaSaúde, within its role of institutional representation before society and government, valorizes the ideas and aims convergence amongst its associates, seeking a more balanced, efficient an capable sector to satisfy the population wishes, with the peculiarities of each company respected. The union for these goals makes the Federation an acting and increasingly recognized entity as sound institution in the market defense.

Within this context, the mission of FenaSaúde is contribute to consolidation of the health care private market, sharing experiences and appraisals of common interest themes, elaborating proposals for the growth of the market and strengthening itself as institutional representation of the private operators of supplementary health. The values of FenaSaúde are the following:

• Be an important representation channel of

the associates, 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;

• Appreciate the associates, respecting and embracing their diversity and freedom of opinion;

• Provide the best conditions within its reach

in order to keep the associates informed on key issues of common interest;

• Keep permanent forums of discussions,

exchange of experiences, production of knowledge and development of proposals regarding care, economic and financial, legal, technical and operating aspects of the supplementary health care sector;

• Seek permanently the teamwork,

encouraging the participation of all the associates;

• Keep agility in the works development of

with well-scaled operational structures to meet the associates needs;

• Aim constantly the seamlessness in the communication with the society;

• Encourage practices of citizenship and social responsibility.

* Full Report on Chapter VI

National Federation of Capitalization (FenaCap)* FenaCap is the entity of institutional representation of the capitalization companies, recognized by the society and its associates, with capacity to promote the capitalization bond as economical and social development instrument. Among other objectives, Fenacap promotes the permanent defense of the segment interests; represents the associates, 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 performing studies and projects, promoting diffusion of actions of the sector as well of improving the institutional image of the market, and also contributing to the training, qualification and providing professional certification. *Full Report on ChapterVII

State Trade Unions* The trade unions remain affiliated to Fenaseg, that even with the creation of the CNSeg, continues existing as entity of trade union representation. The non-profit Open Private Pension Entities are joined in a single National Trade Union, which is affiliated to FenaPrevi.

List of Trade Unions: 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, 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, Open Private Pension and Capitalization and Reinsurance Companies of the States of Minas Gerais, Goiás, Mato Grosso and Distrito Federal President: Luciano Macedo de Lima 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 Trade Union of Private Insurance, Capitalization, Reinsurance and Open Private Pension Companies of the State of Rio Grande do Sul President: Júlio César Rosa Trade Union of 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 State of North and Northeast President: Múcio Novaes de Albuquerque Cavalcanti National Trade Union of Open Private Pension Entities President: Francisco Alves de Souza

National Federation of the Insurance Brokers (FENACOR) The National Federation of Private Insurance and Reinsurance Brokers, Capitalization, Open Private Pension and Insurance and Reinsurance Brokerage Companies (FENACOR), is a higher level trade union entity, recognized by the Ministry of Labor and Employment, by the State Trade Union Letter issued on March 21st, 1975, that represents judicial and extra-judicially 26 Affiliated Trade Unions, in the Federation Units, and whose essential aim is protect and defend the interests of the economic category it represents, before private entities and public authorities. Affiliated to the National Trade Confederation in Goods, Services and Tourism (CNC), the Federation also has as mission cooperate with the public authorities in the studies and in looking for solutions to the problems related to the category and the insurance market; and provide technical and legal assistance to the affiliated Trade Unions, including technical and operational advice to policyholders and beneficiaries of DPVAT Insurance, through its network of affiliated Trade Unions and its state offices. Further, by authorities delegation of SUSEP, FENACOR is liable for the examination of applications for professional registration of insurance brokers for General Insurance, Life, Capitalization and Open Private Pension, for the enrollment changes and also the reenrollment of natural persons and legal entities, held every three years, since 2002.

Full Executive Board The Full Executive Board for the 2010/2014 term is composed by the following members: President Vice-President Vice-President Vice-President Vice-President Vice-President Chief Secretary Treasurer Director

Armando Vergílio dos Santos Júnior Robert Bittar Paulo Roberto Sousa Thomaz Roberto Silva Barbosa Celso Vicente Marini Nelson Peixoto Feijó Filho Joaquim Mendanha de Ataídes Cláudio Simão

State Vice Presidencies In order to expedite the compliance with request made by Trade Unions and practitioners around the Country and thus increasing the performance reach of the entity, FENACOR created five State Vice Presidencies. Currently, the state Vice Presidents are Geraldo Cavalcante Ramos (North), Carlos Alberto Valle (Northeast); Dorival Alves de Sousa (Midwest), Leôncio de Arruda (Southeast), and Odair Roders (South).

Political Committee The purpose of the Committee is protect the interests of the category represented in Brasília or even in state or local forums. It is composed by five representatives, the Presidents of the following Trade Unions: Rio Grande do Sul (Celso Marini) and Distrito Federal (Dorival Alves); the deputy of the Executive Board of SINCOR Goiás (Jair Cunha); the DirectorSecretary of FENACOR (Joaquim Mendanha) and the Vice President of FENACOR (Roberto Barbosa).

Code of Ethics The creation of the Category 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 liable for deciding by the trial court, the information of irregularities committed by insurance brokers within their jurisdiction. The National Committee of Ethics, established by FENACOR, will be liable for deciding by the court of appeals. This judgment will be sent to the Superintendence of Private Insurance (SUSEP), in order to be taken the steps provided for in law

Digital Certification Since 2005, FENACOR, in partnership with SERASA, is confirmed as Certifier Agency, and it may issue Digital Certificates – FENACOR.

Certificates Issued Natural Persons

Legal Entities

Total

Number

FENACOR

2,329

54%

2,890

55%

5,219

54%

CA. Oper. SERASA

1,964

46%

2,400

45%

4,364

46%

Total

4,293

100%

5,290

100%

9,583

100%

System of Trade Union Management Expertise (SEGS) Program implemented in partnership with National Trade Confederation in Goods, Services and Tourism (CNC) that encourages the management expertise development of the Federations and Trade Unions affiliated to the Sicomercio, by criteria based on fundamentals of the National Quality Award (PNQ).

Entities Certified SEGS Performance

2008 2009

Trade Unions affiliated to FENACOR

Trade Unions affiliated to SEGS

Trade Unions certificated in the SEGS

Acting Brokers The category of insurance brokers is present around the country, totalizing 69 thousand brokers, being 42,4 thousand natural persons and 26,8 legal entities, which operate in general insurance and also in life insurance. Amongst the Brazilian regions with larger penetration, we highlight the Southeast region. Acting Brokers Natural Persons

Number

Legal Entities

Number

Total %

Number

Life

13,888

33%

6,473

24%

20,361

29%

All Lines of Insurance

28,581

67%

20,395

76%

48,976

71%

Total

42,469

100%

26,868

100%

69,337

100%

Acting Brokers by Region Natural Persons

Number

Total %

Number

North

1,031

696

1,727

Northeast

4,116

10%

2,424

6,540

Midwest

2,254

1,739

3,993

27,861

66%

17,047

63%

44,908

65%

South

7,207

17%

4,962

18%

12,169

18%

Total

42,469

100%

26,868

100%

69,337

100%

Southeast

Number

Legal Entities

National School of Insurance Established in 1971, the National School of Insurance has as mission to spread teaching, research and knowledge in insurance. The institution meets the Brazilian professionals needs through continued education, assisting them to face a hard competitiveness market

Executive Board President

Robert Bittar

Executive Director

Renato Campos Martins Filho

Director of Research and Development

Claudio Roberto Contador

State Director of São Paulo

João Leopoldo Bracco de Lima

Director of Education

Nelson Le Coq (até novembro de 2010)

Administrative and Financial Superintendent

Paola Casado

Commercial Superintendent

Henrique Berardinelli

In 2010, the National School of Insurance gave continuity to the investments intended for expanding its activities all over the national territory, leading the professional qualification of the sector to all the regions of the Country. The institution has succeeded in its strategy. All in all have been accounted more than 36 thousand attendances in lectures, seminars and other educational programs developed by the School, in several cities. Once more, the 14 state unities of the entity have been decisive in the accomplishment of the programs, being that four representations received improvements of infrastructure: Ribeirão Preto, Santa Catarina, Rio Grande do Sul e Distrito Federal. In several cities the partnerships with trade unions and education institutions have been kept, especially to hold lectures and the Course for Insurance Brokers Qualification. During 2010, 42 cities received qualification classes of brokers, the same number of 2009. At the end of the year, taking into account courses and examinations, 5,969 new

qualifications have been granted, considered the three phases of the course – Capitalization, Life and Pension, and Other Lines of Insurance. In 2010 the Graduation in Administration with Emphasis in Insurance and Pension graduated its octave and ninth class in Rio, and the second and third in São Paulo, closing the year with 281 graduates, considering the two cities. In October, the Federal Official Journal published ordinance of the Ministry of Education, recognizing the graduation in Rio de Janeiro. The Ministry of Education and Culture evaluation granted degree four, considering the scale up to five. The Executive MBA in Insurance and Reinsurance, created in 2008, remains obtaining great acceptance of the sector and today is the main option for professionals seeking expertise. Totally, nine classes are ongoing, being five in Rio de Janeiro, three in São Paulo and one in Goiânia that graduated its first class. The MBA ended the year with 278 postgraduate. Other two postgraduate courses that deserve highlight are Insurance Management – Life and Pension and Specialization in Insurance Management. The both have been given in the closed modality, respectively for employees from Bradesco Vida e Previdência, in São Paulo, and from Par Corretora de Seguros (former Fenae Corretora), in Brasília. In Rio de Janeiro there was an expressive increase in the number of closed technical courses, including with company of other sectors. As samples of this trend were the CPM Braxis that is among the 10 world largest companies of information technology, and Light that provides electricity services. Also in the education area, the distance learning modality made possible the qualification of professionals who live in places where the School does not count on state

unity. With the support of new tools and of a methodology that prioritize the personalized service, 3,649 students participated in the activities of distance learning modality, a 80% increase comparing with 2009. Other activities that have been shown growth every year are the lectures – given in the big capitals and in small cities – and the seminars. Together, such events have been attended by more than 15 thousand participants, in 91 different cities. In the editorial area, the School remained as reference in the publication of titles relating to insurance, capitalization, open private pension, reinsurance and risk. Throughout the year, 25 new works were launched, and published six editions of the “Cadernos de Seguro”, the main technical magazine of the market, which circulates continuously for 30 years. Created in 2009, the website Tudo Sobre Seguros (www.tudosobreseguros.org.br)is a milestone in the communication between the insurance market and the people that interact with it, mainly customers and press. Addressed to the society in general, the website has as purpose clarify doubts on the several insurance modalities. The environment seeks the interactivity with the internet user by means of two windows: “Fale conosco” and “Pergunte ao especialista”. The simplest questions are answered by a

permanent team and complex questions count on the assistance of market technicians. In the section “Fases da Vida” are detailed all the products related to every stage of the life, with links intended for the children, students, single, married, divorced and people of the third age. The website contents is updated periodically, with the inclusion of information about the several modalities of insurance. Weekly, a new theme is raised in the section “O Seguro Cobre?” and the more sound texts are reviewed or included every two months, in average. During the year have been performed countless campaigns by e-mail, relating facts of impact such as floods, terrorist attacks and disasters, to the respective coverages, always intended for the specific areas of the site. In 2010, Tudo Sobre Seguros presented an expressive growth, reaching peaks of up to 4,500 access per day and more than 60,000 visits in November, with average of 48.000 visitors in the last three months of the year. Upon a great effort of disclosure and acculturation, the propose is that, gradually, the site will consolidate as reference for the sector and also for all the people who have not a direct relation with the insurance market, but use its products and services.

Chapter II

The Brazilian Insurance Market 29

New Concept The Brazilian insurance market acts in the following segments: general insurance; personal; open private pension, capitalization; and supplementary health, achieving not only the specialized insurance companies in health, but all the modalities of operating companies. Having in mind that insurance is a way of risks management used primarily for financial protection against events whose occurrence, frequency and severity are uncertain, we understand as opportune the increase of the “insurance operations” concept, so that to comprehend the supplementary health providers. Such our vision is strengthened by the fact that, in addition to offer access to hospitals, private clinics and skilled professionals, as the insurance companies specialized in health, the providers of the further modalities of health

plan are also regulated and supervised by ANS, apply the prudential and solvency rules, the risks mutuality and underwriting concepts in their activities and have in FenaSaúde their higher body of institutional representation. This concept change reflects the importance that our segment has currently in the Country economics, as the relevant participation in the GDP that has already surpassed the baseline of 5% when evaluating in terms of income. In order to enable the comparison with information made available in previous reports, we present the data regarding to income and to income as GDP percentage, under two views: the “extended view”, based on this new concept, and the “traditional view”, where only the health insurance companies are considered as part of the Brazilian insurance market.

Operation Structure by Segments, Groups and Branches To operate in the insurance market the insurance companies shall be constituted as corporation, with registered shares (Laws nos. 6.404/1976 and no. 10.303/2001). The license to operate is granted by SUSEP Superintendent, in compliance with the Ordinance no. 151 of the Ministry of Finance, dated June 23rd, 2004 or by ANS, if health insurance companies and further health plan providers. The companies controlled by SUSEP are authorized to operate in general insurance (Non Life), Life or in the both. Companies authorized to operate solely in Life may also commercialize pension plans, according to the Complementary Law no. 109/2001. SUSEP, when regulating the insurance companies products offer, classify them in 92

branches, separated into 16 groups, included in three great segments: general insurance; personal, including the operations of open private pension; and capitalization. The general insurance segment is composed by 12 groups that include 77 branches. Within such segment are classified the risks coverage insurances that comprehend goods and properties, and their related responsibilities. In the personal segment, and within the Life and Personal Accident group, which is composed by 12 branches, VGBL stands out; in Pension group are included two types of plans, of PGBL and the traditional plans. The segment encompasses all the operations related to life insurance in general, annuity constitution and supplementary retirement.

The capitalization is the segment that provides a tool to assist the population in the effort to accumulate short and long term financial reserves in order to constitute savings, combined to the playful aspect of the drawings.

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 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

Supplementary Health Segment Regulated by ANS, the supplementary health segment which guarantees to people the access to private medicine – hospitals, clinics and skilled practitioners –, is composed by three branches: individual; business group; and group per adherence (“associations”). The companies interested in operating in the supplementary health segment, as insurance company, must be skilled, as set forth in the Law no. 10.185, of 2000. The activities of the further modalities of health plan providers are similar to those of the insurance companies, because they are based on the same insurance concepts: risk assessment and prudential rules. Health Group Medical and Hospital Odontological

Institutional Representation The companies may be affiliated to the sectorial Federations according to their acting field:

• National Federation of General Insurance (FenSeg): 67 insurance companies

• National Federation of Open Private

Pension and Life (FenaPrevi): 79 permanent associates, amongst them are 64 insurance companies and 15 non-profit open private pension entities

• National Federation of Supplementary

Health (FenaSaúde): 27 associates, being 12 insurance companies specialized in Health, 12 group medicine and 3 group dentistry

• National Federation of Capitalization

(FenaCap): 11 capitalization companies

Data from the Market Operations The Brazilian insurance market ended the year of 2010 with 1,785 acting companies. From this number, 129 are insurance companies, being 31 life and pension insurance companies and 13 specialized in health. There are also 28 open private pension entities (EAPCs), 1,614 health plans providers and 14 capitalization companies.

Income In 2010, the market accounted a total of R$183.89 billion in premiums, contributions and capitalization bonds. A figure that represented 14.24 growth compared to R$160.96 billion in 2009. The most significant growth (17.94%) was recorded in the Personal, Life and Pension segment, which earned global revenue of R$ 61.76 billion, against R$ 52.37 billion in the previous year. With up or down slight indexes fluctuations this good performance also repeated in the other segments of the market: 14.47% in the General Insurance; 10.82% in the Supplementary Health segment; 16.60% in the Capitalization segment. The major branches as regards income â&#x20AC;&#x201C; VGBL and Motor â&#x20AC;&#x201C; presented a growth of 21.81% and 15.26%, respectively, in the year of 2010. The following branches, due to their individual increase, have also highlighted: Home/Housing (21.87%), Property (20.08%) and Cargo (16.80%). DPVAT insurance, with total premiums exceeding R$2.89 billion, recorded a 7.92% growth in 2010. Between 2005 and 2010 the production of the market recorded accumulated growth of 94.57%, as result of the global growth for the

Personal segment (122.63%), for which VGBL competed significantly (212.14% growth in the period), whose production jumped from R$11.76 billion in 2005 to R$36.70 billion in 2010, keeping a steady growth trajectory in the period. Even on Personal segment, deserve to be highlighted the Personal Accident insurances, that accumulated a growth of 123.82% from 2005 to 2010, with income going from R$1.30 billion to R$ 2.92 billion. In this same period, the General Insurance segment registered accumulated growth of 66.96%, when going from a production of R$22.55 billion in 2005 to R$ 37.65 billion in 2010. A marked growth of 343.04% deserves highlight in the financial risks branch, with production of R$202.8 million that jumped to R$898.5 million and also in the rural insurance, that accumulated growth of 279.63%, with production going from R$ 269.4 million to R$ 1.02 billion last year. Even on General Insurance segment, regarding the total volume of business, the Motor branch keeps leading the production since 2005. It accounted a premiums income of R$20.05 billion in 2010 against R$12.13 billion in 2005 - a growth of 65.38% in the period. Following, the Property branch stands out, going from a production of R$4.51 billion in 2005 to R$7.79 billion in 2010, with 72.85% accumulated growth within the period. In the same date range, the Supplementary Health segment grew from a production of R$37.31 billion to R$72.69 billion, representing an accumulated increase of 94.85%. As regards the Capitalization segment production it jumped from R$6.91 billion in 2005 to R$11.78 billion in 2010, an accumulated growth of 70.48% within the period.

Income, Contributions and Premium Revenue - 2005-2009-2010 Segments / Groups Motor

Values in R$ thousand

2005

2009

2010

% Variation 2010/2005

% Variation 2010/2009

12,125,057

17,398,186

20,052,338

65.38%

15.26%

Hull

474,317

548,336

571,932

20.58%

4.30%

Credit

481,177

426,684

426,153

-11.44%

-0.12%

1,952,805

2,683,869

2,896,385

48.32%

7.92%

405,811

906,874

1,105,235

172.35%

21.87%

DPVAT Home/Housing Property

4,505,843

6,486,165

7,788,497

72.85%

20.08%

Liability

452,946

632,850

750,099

65.60%

18.53%

Special Risks

210,518

235,056

172,703

-17.96%

-26.53%

Financial Risks

202,805

867,937

898,499

343.04%

3.52%

Rural

269,436

1,023,597

1,022,846

279.63%

-0.07%

Cargo

1,471,519

1,686,007

1,969,231

33.82%

16.80%

Other

13 22,552,247

32,895,562

37,653,919

66.96%

14.47%

Individual / Group Life / CPA / Other

6,941,134

11,142,077

12,796,024

84.35%

14.84%

Personal Accident

1,304,491

2,540,825

2,919,772

123.82%

14.91%

VGBL

11,759,004

30,132,802

36,704,259

212.14%

21.81%

PGBL

4,476,975

5,201,848

6,083,284

35.88%

16.94%

Traditional Plans

3,261,613

3,352,583

3,260,340

-0.04%

-2.75%

27,743,217

52,370,136

61,763,678

122.63%

17.94%

7,912,489

12,403,605

13,979,366

76.67%

12.70%

Other Modalities

29,393,431

53,187,078

58,710,914

99.74%

10.39%

Supplementary Health Segment

37,305,920

65,590,683

72,690,280

94.85%

10.82%

6,910,339

10,104,143

11,780,949

70.48%

16.60%

94,511,723

160,960,523

183,888,825

94.57%

14.24%

General Insurance Segment

Personal Segment Insurance Companies Specialized in Health

Capitalization Segment Insurance Market, Private Pension, Supplementary Health and Capitalization

Source: SUSEPâ&#x20AC;&#x2122;s Statistical Data System (SES) - 2010/12 Base and ANS.

Income by Segment â&#x20AC;&#x201C; Extended View 6% 20%

General Insurance Personal Supplementary Health Capitalization

40% 34%

Income by Segment â&#x20AC;&#x201C; Traditional View 10% 11%

General Insurance

30%

Personal Supplementary Health Capitalization

49%

Income of the Insurance Market in Relation to GDP insurance market participation was equivalent to 4.40%, that is, there was an accumulated growth of 17.54% of the insurance market participation in the GDP during the last five years.

In 2010, with a global production of R$183.89 billion, the Brazilian insurance market participation in the GDP represents 5.17% of the R$3.554 trillion in goods and services produced in Brazil during 2010. In 2005, the

Income of the Insurance Market in Relation to GDP Income* Year

Participation relating to GDP (%)

Nominal GDP (R$ million)

Traditional View

Extended View

Traditional View (R$ million)

Extended View (R$ million)

2005

65,118

94,512

2,147,239

3.03

4.40

2006

73,695

107,014

2,369,484

3.11

4.52

2007

84,334

127,579

2,661,344

3.17

4.79

2008

95,076

144,322

3,004,881

3.16

4.80

2009

107,773

160,961

3,143,015

3.43

5.12

2010

125,178

183,889

3,554,436

3.52

5.17

* Insurance Premiums, Retained Contributions, and Retained Revenue and Capitalization

4.40 3.03

4.79

4.52 3.11

3.17

3.16

5.17

5.12

4.80 3.43

Sources: SUSEP, ANS, IPEADATA and CNSeg/SISCORP

3.52 Traditional View Extended View

2005

2006

2007

2008

2009

2010

Income in relation to Inflation Between 2006 and 2010, the Brazilian insurance market registered 94.6% of income growth, but the inflation in Brazil, measured by IPCA, accumulated increase of 33.22%. In 2010, considering an inflation of 5.91%, the insurance market increased its income in 14.2%. Income x Inflation – Extended View

Values in R$ thousand

Growth 2006-2010

Growth 2010

Accumulated

Income Growth

2005

2009

2010*

Insurance Market

94,511,723

160,960,523

183,888,825

14.2%

7.9%

94.6%

46.0%

14.2%

7.9%

General Insurance Segment

22,552,247

32,895,562

37,653,919

14.5%

8.1%

67.0%

25.3%

10.8%

4.6%

Personal Segment

27,743,217

52,370,136

61,763,678

17.9%

11.4%

122.6%

67.1%

17.4%

10.8%

Supplementary Health Segment

37,305,920

65,590,683

72,690,280

10.8%

4.6%

94.8%

46.3%

14.3%

7.9%

6,910,339

10,104,143

11,780,949

16.6%

10.1%

70.5%

28.0%

11.3%

5.1%

100

125,79

133,22

Capitalization Segment IPCA – Accumulated Index

Nominal Actual

Annualized

Nominal Actual Nominal Actual

Sources: SUSEP, ANS, IPCA/IBGE (Suma Econômica) and CNSeg/SISCORP

Claims, Benefits and Surrenders Measured in percentage, the loss ratio of the market in 2010 (66.54%) was below the index reported in the previous year (69.92%), while in values with a sum of R$ 89.27 billion paid in claims, benefits and surrenders, it has been accounted a growth of 7.33% over the sum paid in 2009 (R$83.17 billion). Values in R$ thousand

2009

% Variation 2010/2009

Earned Income (*)

Claims/ Benefits/ Surrenders

Loss Ratio

Earned Income (*)

Claims/ Benefits/ Surrenders

Loss Ratio

Earned Income (*)

Claims/ Benefits/ Surrenders

General Insurance

27.238.868

16.399.620

60.21%

30.932.656

17.820.805

57.61%

13.56%

8.67%

Personal Insurance

15,925,860

4,916,449

30.87%

18,163,115

5,227,234

28.78%

14.05%

6.32%

12,802,639

4,556,437

35.59%

14,186,157

4,845,212

34.15%

10.81%

6.34%

Open Private Pension

3,123,221

360,012

11.53%

3,976,958

382,022

9.61%

27.34%

6.11%

Supplementary Health

66,045,252

53,757,038

81.39%

73,395,181

58,030,450

79.07%

11.13%

7.95%

Capitalization

9,737,078

8,100,281

83.19%

11,678,841

8,192,177

70.15%

19.94%

1.13%

Total Market

118.947.058

83.173.387

69.92%

134.169.793

89.270.667

66.54%

12.80%

7.33%

Segments

Life + PA

* Earned Income

2010

= Earned Premium + Earned Revenues from Pension + Earned Revenues from Capitalization

Source: SISCORP (SUSEP and ANS)

Earned Income 2010 8.7% 23.1%

General Insurance Personal Supplementary Health

13.5%

54.7%

Capitalization

Claims, Benefits, Surrenders and Drawings 2010

9.2% 20.0%

General Insurance

5.9%

Personal Supplementary Health

65.0%

Capitalization

Technical Reserves The insurance, open private pension, supplementary health and capitalization operations play a crucial role in the constitution and administration of long term domestic savings that are important and needful components to the economic and social development of the Country. When administrating this increasing domestic savings, reflected in the balance of technical reserves, it may be noted another relevant role played by the market, the prudent investment of these funds in assets to offer safety and liquidity, so as to be able to comply full and timely with the contractual commitments to customers.

In 2010, the technical reserves of the Brazilian insurance market accumulated the amount of R$ 290.9 billion, value above 20.79% if compared to the value of R$240.8 billion in 2009. In order to illustrate, it is worth mentioning some samples of technical reserves that the companies should constitute monthly, according to the market segment, from regulations enacted by SUSEP and ANS:

â&#x20AC;˘ Unearned Premiums; Premiums

Complementary; Premium Insufficiency; Mathematic for Accrued Benefits; Losses Payable; Losses 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 but Not Reported, Accrued Benefits, Benefits Granted, Administrative Expenses, Risks Fluctuation, Contributions Insufficiency, Unexpired Risks, Premiums Complementary, 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; As much the technical reserves collateral as the companies’ equity 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.

Technical Reserves

Values in R$ thousand

Segments Insurances and Pension Supplementary Health Capitalization Total – Market

% Variation 2010/2009

2009

2010

217,368,777

262,515,826

20.77%

8,536,885

11,144,713

30.55%

14,937,575

17,254,549

15.51%

240,843,237

290,915,087

20.79% Source: SISCORP (SUSEP and ANS)

Collateral Investments In the fixed-income segment, the funds should be invested individual or cumulatively, up to 100% in government bonds and investments funds whose portfolios are represented solely 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 the funds is limited from 3% to 49% of all the investments, individual or cumulatively,

depending on the following issues: nature of the characteristics of the shares issued by companies, subscription bonus, subscription receipts and deposits certificates from first-line companies, in addition to investment funds quotas in shares of the mentioned companies. In the real estate segment, up to 8% of the funds should be invested in urban real estate. In 2010, the companies of the Brazilian insurance market kept the conservative policy of investments for their technical reserves, which remain invested, mostly, in government bonds.

Investments of Technical Reserves of the Insurance Market 2010 1%

18%

Fixed-Income Investment Fund Investments Funds Quotas - Government Bonds National Treasury Notes Other Fixed-Income Investments

46%

14%

Variable Income 0,0% Real Estate

21%

Equity In 2010, the consolidated equity of the market achieved R$84.4 billion, representing a growth of 13.92%% in relation to the year of 2009, when such number was R$74.1 billion. Equity Segments

Values in R$ thousand

% Variation 2010/2009

2009

2010

Insurances and Pension

45,731,219

52,719,407

15.28%

Supplementary Health

22,498,419

25,519,555

13.43%

5,875,192

6,182,132

5.22%

74,104,830

84,421,095

Capitalization Total â&#x20AC;&#x201C; Market

13.92% Source: SISCORP (SUSEP and ANS)

Total of Investments In 2010, the total of investments in the insurance market achieved R$375.3 billion, a sum equivalent to 10.56% of the GDP. This representativeness emphasizes the relevance of the insurance market for the economy, as well as its growth of 19.17%, against the year of 2009, reveals its great potential to promote the economic and social development of the Country. Values in R$ million

% Variation 2010/2009

Accounts

2009

2010

Investments

314,948

375,336

19.17%

Technical Reserves

240,843

290,915

20.79%

74,105

84,421

13.92%

3,143,015

3,554,436

13.09%

10.02%

10.56%

Equity Nominal GDP Participation in the GDP

0.54 pp Source: SISCORP (SUSEP and ANS)

Chapter III

CNSeg The Institutional Representation of the Insurance Market 41

National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNSeg) With principal business office in the City of Rio de Janeiro, the National Confederation of 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 is entity of associative nature, while Fenaseg, established in 1951, remains as the entity of higher level representation, of trade union nature, associated with the National Confederation of the Financial System (CONSIF).

Institutional Representation of the Insurance Market

On March 30th, 2010, it was held the election for the executive board of CNSeg, with single plate headed by Jorge Hilário Gouvêa Vieira, who succeeded the president João Elisio Ferraz de Campos. The solemnity where the new executive board took office was held on April 15th, 2010, 18h30 pm, at Hotel Sofitel, Rio de Janeiro.

committed to draw up the Strategic Plan of CNSeg for 2010/2013 period, when have been made the following decisions: The Board, elected by General Meeting, now referred Board of Directors; it was established the Executive Board to manage the operation of CNSeg; and it was approved the establishment of the Center of Studies and Plans, whose purpose is to develop mid and long term plans aligned with the interest of the insurance industry.

On August 20th and 21st, the new executive board met in Itaipava, Rio de Janeiro,

General Meeting Audit Committee Board of Directors Higher Council

Council of Ethics

Council of Management of CESER

Presidency

Advisory

Center of Studies and Plans Executive Board

Board of Governmental Relations

Administrative and Financial Superintendence

Superintendence of Communication and Events

Superintendence of Institutional and Consumer Affairs

Legal Superintendence

General Superintendence of the Central of Services

Technical Superintendence

Board of Directors President Jorge Hilário Gouvêa Vieira

Sul América Companhia Nacional de Seguros

1st Vice President Patrick Antônio Claude de Larragoiti Lucas

Sul América Companhia Nacional de Seguros

Founding Vice Presidents Jayme Brasil Garfinkel

Porto Seguro Cia. de Seguros Gerais

Marcio Serôa de Araujo Coriolano

Bradesco Saúde S.A.

Marco Antonio Rossi

Bradesco Seguros S.A.

Ricardo José da Costa Flores

Brasilcap Capitalização S.A.

Vice Presidents Antonio Cássio dos Santos

Mapfre Vera Cruz Seguradora S.A.

Nilton Molina

Mongeral AEGON Seguros e Previdência S.A.

Directors Alexandre Malucelli

J. Malucelli Seguradora de Crédito S.A.

Antonio Eduardo Márquez de Figueiredo Trindade

Itaú Seguros S.A.

Luis Emilio Maurette

Liberty Seguros S.A.

Mário José Gonzaga Petrelli

Icatu Seguros S.A.

Paulo Miguel Marraccini

Allianz Seguros S.A.

Pedro Cláudio de Medeiros B. Bulcão

Sinaf Previdencial Cia. de Seguros

Pedro Pereira de Freitas

American Life Companhia de Seguros

Pedro Purm Junior

Zurich Brasil Seguros S.A.

Guests

Luiz Tavares Pereira Filho

Bradesco Seguros S.A.

Renato Campos Martins Filho

Escola Nacional de Seguros

Higher Council President Jorge Hilário Gouvêa Vieira

Sul América Companhia Nacional de Seguros

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.

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 Vida e Previdência S.A.

José Roberto Marmo Loureiro *

Metropolitan Life Seguros e Prevdência Privada S.A.

Luis Emilio Maurette

Liberty Seguros S.A.

Marcio Serôa de Araujo Coriolano

Bradesco Saúde S.A.

Marco Antonio Rossi

Bradesco Seguros S.A.

Mário José Gonzaga Petrelli

Icatu Seguros S.A.

Nilton Molina

Mongeral AEGON Seguros 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.

Higher Council - Honorables Alberto Oswaldo Continentino de Araújo

Eduardo Baptista Vianna

João Elisio Ferraz de Campos

José Américo Peón de Sá

Representatives of the State Trade Unions João Gilberto Possiede

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

Júlio César Rosa

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

* up to October, 2010

Audit Committee Permanent Members Haydewaldo Roberto Chamberlain da Costa

Bradesco Seguros S.A.

Laênio Pereira dos Santos

Sul América Seguros de Pessoas e Previdência S.A.

Lúcio Antonio Marques

Companhia de Seguros Previdência do Sul

Deputy Members José Maria Souza Teixeira Costa

Companhia de Seguros Aliança da Bahia

Luiz Sadao Shibutani

Allianz Seguros S.A.

Council of Ethics The Council of Ethics of CNSeg, chaired by Jayme Brasil Garfinkel since it was formed, on July 3rd, 2008, consolidated in 2010 as body for supervising the compliance with the standards of ethic behavior by the associated enacted by Itaipava Letter and as precursor environment for the self-regulation of the market. On December, 2010, the Board of Directors was also composed by José Américo Peón de Sá (vice president) and by the following Directors: Antônio Eduardo M. F. Trindade, Marcio Serôa de Araújo Coriolano, Mário Teixeira de Almeida Rossi, Maria Helena Darcy de Oliveira and Oswaldo Mário Pego de Amorim Azevedo - with vacancies to be filled in 2011. The Council of Ethics of CNSeg met four times in 2010 to analyze insurance, capitalization and private pension cases. In the first of such meetings, on March 4th, it has been decided to divulge generally the amendment to the Article 3 of the Code of Ethics for the Insurance, Open Private Pension and Capitalization Market, approved in the meeting held by the Higher Council of CNSeg, on September 16th, 2009. The current wording of the Article is the following: “Article 3 – The guidelines of this

Code are applied to all the operators of the insurance market and the follower institutions, namely: I – followers insurance companies, capitalization companies, open private pension entities and reinsurance companies, understood such as the companies constituted in accordance with the Brazilian law for all these purposes and that are committed to comply with the standards of this Code. Single paragraph – This Code shall be subject to voluntary, individualized and express writing adhesion by each of the follower companies that shall be represented, as the case may be, as per their articles of incorporation.” In 2010, the Guide of Good Practices of Motor, drawn up by FenSeg, has been incorporated to the Code of Ethics of CNSeg, bringing recommendations to improve the relations, in the scope of such branch, amongst insurance companies, amongst insurance companies and assureds, brokers, suppliers, service providers, government, consumer protection bodies, supervision and control agencies, in addition to procedures that contribute for preserving the environment. Also in 2010, the Council of Ethics updated the Code of Ethics of the Market, including the health care operators and the reinstatement of the members whose term would end in 2010.

111 companies had already adhered to the Code of Ethics: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Ace Seguradora S.A. Alfa Previdência e Vida S.A. Alfa Seguradora S.A. Allianz Seguros S.A. American Home Assurance Company American Life Cia. de Seguros Aplub – Prev. Previdência Aplub Capitalização S.A. Assurant Seguradora S.A. Atlântica Companhia de Seguros Azul Cia. de Seguros Gerais Banestes Seguros S.A. BCS Seguros S.A. Berkley International do Brasil Seguros S.A. Bradesco Auto/Re Cia. de Seguros Bradesco Capitalização S.A. Bradesco Saúde S.A. Bradesco Seguros S.A. Bradesco Vida e Previdência S.A. Brasilcap Capitalização S.A. Brasilprev Seguros e Previdência S.A. Brasilsaúde Cia. de Seguros Brasilveículos Cia. de Seguros Caixa Capitalização Caixa Seguradora Caixa Vida e Previdência S.A. Cardif do Brasil Seguros e Garantias S.A. Centauro Vida e Previdência S.A. Cescebrasil Seguros de Crédito S.A. Cescebrasil Seguros de Garantia e Crédito S.A. Chartis Seguros Brasil S.A. Chubb do Brasil Cia. de Seguros Cia. Itaú de Capitalização Cigna Seguradora S.A. Companhia de Seguros Aliança da Bahia CompanhIa de Seguros Aliança do Brasil Companhia de Seguros Gralha Azul Companhia de Seguros Previdência do Sul Companhia Excelsior de Seguros Companhia Mutual de Seguros Confiança Cia. de Seguros Cosesp – Companhia de Seguros do Estado de São Paulo Fairfax Brazil Seguros Corporativos S.A. Fator Seguradora S.A. Federal de Seguros S.A. Gboex – Grêmio Beneficente Generali Brasil Seguros S.A. HDI Seguros S.A. HSBC Empresa de Capitalização (Brasil) S.A. HSBC Seguros (Brasil) S.A. Icatu Capitalização S.A. Icatu Seguros S.A. Indiana Seguros S.A. IRB - Brasil Resseguros S.A. Itaú Seguros de Auto e Residência S.A. Itaú Seguros S.A.

57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111

Itaú Vida e Previdência S.A. Itáú Xl Seguros Corporativos S.A. J. Malucelli Seguradora S.A. Kyoei do Brasil Cia. de Seguros Liberty Seguros S.A. Liderança Capitalização S.A. Luizaseg Seguros S.A. Mapfre Nossa Caixa Vida e Previdência S.A. Mapfre Vera Cruz Seguradora S.A. Mapfre Vera Cruz Vida e Previdência S.A. Mares-Mapfre Riscos Especiais Seguradora S.A. Marítima Saúde Seguros S.A. MarÍtima Seguros S.A. MBM Seguradora S.A. Metropolitan Life Seguros e Previdência Privada S.A. Minas Brasil Seguradora Vida e Previdência S.A. Mitsui Sumitomo Seguros S.A. Mongeral AEGON Seguros e Previdência S.A Nobre Seguradora do Brasil S.A. Panamericana de Seguros S.A. Paraná Companhia de Seguros Porto Seguro – Seguro Saúde S.A. Porto Seguro Cia. de Seguros Gerais Porto Seguro Vida e Previdência S.A. Pottencial Seguradora S.A. Prudential do Brasil 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 Seguros Gerais S.A. Santander Capitalização S.A. Santander Seguros S.A. Seguradora Brasileira de Crédito À Exportação Seguradora Líder dos Consórcios do Seguro DPVAT Sinaf Previdencial Cia. de Seguros Sul América Capitalização S.A. - Sulacap Sul América Companhia de Seguro Saúde Sul América Companhia de Seguros Gerais Sul América Companhia Nacional de Seguros Sul América Seguro Saúde S.A. Sul América Seguros de Vida e Previdência S.A. Tokio Marine Brasil Seguradora S.A. Tokio Marine Seguradora S.A. UBF Garantias & Seguros S.A. UBF Seguros S.A. Unibanco AIG Seguros S.A. Unibanco AIG Vida e Previdência S.A. Unibanco Companhia de Capitalização Unimed Seguradora S.A. Usebens Seguros S.A. Vida Seguradora S.A. Virginia Surety Companhia de Seguros do Brasil Yasuda Segiros S.A. Zurich Brasil Seguros S.A. Zurich Minas Brasil Seguros S.A.

Councils, Commissions, Chambers and Committees In 2010, CNSeg counted on institutional representation, by its president or its representatives, in the following bodies:

Brazilian Center of Intermediation and Arbitration (CBMA) Member: José Américo Peón de Sá

National Confederation of the Financial System (CONSIF) Permanent Director: Jorge Hilário Gouvêa Vieira Commissaries: Marco Antonio Rossi and Patrick Antônio Claude de Larragoiti Lucas

Council for Economic and Social Development (CDES) Member: João Elisio Ferraz de Campos

Inter-American Federation of Insurance (FIDES) CNSeg: associated member International Insurance Society (IIS) CNSeg: corporate member Director elected: Jorge Hilário Gouvêa Vieira International Association of Insurance Supervisors – IAIS CNSeg: observer member Mercosul WSG-4 – Banks and Services: Maria Elena Bidino WSG-5 – Cargo: José Carlos de Almeida

Advisory Commission of Microinsurance (CNSP) Holder Members: Antonio Cássio dos Santos and Jayme Brasil Garfinkel Deputy Members: Solange Beatriz Palheiro Mendes and Hélio Oliveira Portocarrero de Castro Council of Appeals of the National System of Private Insurance (CRSNSP) Holder Member: Maria da Gloria Faria Deputy Member: Salvador Cícero Velloso Pinto Brazilian Center for International Relations (CEBRI) Curator Council: Jorge Hilário Gouvêa Vieira

Business Action Executive Committee: Jorge Hilário Gouvêa Vieira

Deliberative Council of the Workers’ Support Fund (CODEFAT) Holder Member: João Elisio Ferraz de Campos Deputy Member: José Ricardo José Flores

National Association of Credit, Financing and Investment Institutions (ACREFI) Director: Jorge Hilário Gouvêa Vieira

Consortium for Insurance Market Regulation (CRMS) Executive Committee: José Américo Peón de Sá

Brazilian Association of Financial and Capitals Market Entities (ANBIMA) Council of Regulation and Best Practices for the Qualified Services to the Capital Market: Tarcísio Godoy Council of Regulation and Best Practices for the Continued Certification Program: Osvaldo do Nascimento Council of Regulation and Best Practices for the Investment Funds Industry: Paulo Miguel Marraccini

National School of Insurance (FUNENSEG) – Board of Directors Members: Mauro César Batista and Miguel Junqueira Pereira

Administrative Council of Fiscal Resources – 4th Chamber (CARF) Deputy Member: Maria da Gloria Faria

SUSEP – Permanent Special Committee Representatives of CNSeg: Jorge Hilário Gouvêa Vieira and Nilton Molina (CNSeg),

Capital Market Masterplan (IBMEC) Executive Committee: Nilton Molina Group of Business Leaders (LIDE) Members: Jorge Hilário Gouvêa Vieira and Patrick Antonio Claude de Larragoiti Lucas

Jayme Brasil Garfinkel (FenSeg), Marco Antonio Rossi (FenaPrevi) and Ricardo Flores (FenaCap) SUSEP - Actuarial Technical Chamber Holder Members: Haydevaldo Roberto Chamberlain da Costa, João Augusto S. Xavier and Elizeu da Silva Souza Deputy Members: Laênio Pereira dos Santos, Denis dos Santos Morais, Carlos Augusto dos Santos Correa and Javier Miguel López SUSEP - Actuarial Technical Chamber – Liability Adequacy Test (LAT) Almir Martins Ribeiro and Jair de Almeida Lacerda Junior

SUSEP - Technical Group – Credit Risk Almir Martins Ribeiro, Anna Paula N de Almeida, Paulo Henrique M Annes, Antonio Carlos de Carvalho and Fabio Bastos de Souza SUSEP - Working Group on Circular no. 380/08 – Money Laundering 10 representatives of the insurance market: Alan Hammond Rua, Assizio Aparecido de Oliveira, Carlos Eduardo Corrêa do Lago, Danilo Campos, Fabio Bastos de Souza, José Ismar Alves Tôrres, Luiz Felipe de Paiva Wancelotti, Sandro Leal Alves, Sérgio Antonio Borriello and William Alan Yates

Strategic Planning - 2010/2013 The purposes for the Strategic Planning of CNSeg were the following:

• Deﬁne a process of strategic guidance

intended for selecting the Institutional Representation Model to be put into effect.

• Identify the essential requirements for the

Governance Model and define, objectively and ideally consensual, the actions recommended for the effective compliance with its institutional mission as highest representation entity of the insurance companies, private pension and life entities, capitalization companies and supplementary health companies.

• Define the coordination of the actions of its

associated federations and affiliated Trade Unions, aiming at unifying its interests, particularly before regulatory agencies of the market, government and society.

During the meeting, the Executive Board knew the information obtained by the Control Consultoria, by means of individual interviews and workshops with advisors and superintendents of CNSeg, executive officers of the federations and presidents of technical committees, and also by means of individual interviews with officers of the Confederation, in

order to identify questions of the New Model of Institutional Representation for the Insurance, Pension and Capitalization Market, approved in 2005 that have not been fully put in place. After a large debate, have been approved Mission, View and Objectives of the CNSeg, as single institutional representation entity of the insurance market, and a Governance Model that considers organizational structure focused on professionalization of the entity, based on well defined roles and duties.

Mission • Promote the development of General

Insurance, Private Pension and Life, Supplementary Health and Capitalization, aiming at satisfying the insurance coverages needs of institutions, companies and citizens by supporting and strengthening of its Associates, representing them before society and government.

View • Be recognized as the major Brazilian representative

• Consolidate as the Excellence Center for the market

• Be a market perception driver, adding value for the economics, society and opinion poll

Objetives • The increasing participation of the market in the Brazilian economics

• The promotion of the Insurance, Private

Pension, Supplementary Health and Capitalization in all of their aspects, making clear to Society its role as promoters of the development, representatives of the progress and participants of the future

• The incentive and use of practices and behaviors that distinguish the market

• The inclusion of new consumers for goods and services of the market, especially by supporting to the development of new insurance coverages and new operational standards

• The support to research and to generation

of knowledge in the market, establishing partnerships with the National School of Insurance and other education centers in Brazil and abroad, for the knowledge development actions and political, social and economical use of goods and services by its Associates and Affiliates

• The co-operation with the regulatory

agencies, with the purpose to improve the Regulatory Milestone of the Market, particularly in seeking its simplification and consequent costs reduction, for the benefit of the consumer

• The development of studies and

maintenance of databases for shared use by its Associates and Affiliates

• The systematic prevention and fight against the abuse and fraud in operations of the insurance industry

• Identification and facing the inhibitor factors of market growth

• The strengthening of the market in all of its segments, considering the plurality of the acting companies

Management Actions • Support the development of Education Program for Society

• Support the drawing up of Permanent Plan of Education

• Develop the Plan of Institutional Communication

• Carry out study for reducing the tax burden • Promote disclosure of the processes and instruments of the Council of Ethics

• Coordinate the actions to introduce the

Guides of Good Practices addressed to the major branches

• Put in place register of the cases analyzed by the Ombudsman Services

• Coordinate the implementation of the Technical Capacity Program

• Develop Project of Agreement Simplification and knowledge asymmetry reduction

• Create the Top Ten for all the branches • Develop the CNSeg glossary of the market terminology

• Leader center of statistical, actuarial,

economical studies for the market, as well as other centers

• Invest in evolutionary maintenance of the Consultation System of Bills

• Reinforce the institutional presence in the

Legislative, Executive and Judicial Branches

• Establish policy and procedures to improve the relationship with regulatory agencies

• Divulge the policy established for institutional performance in the regulatory agencies

• Develop ways to promote the inclusion of

new consumers for the goods and services of the market

• Support the growth of the segments

intended for managing the Agri-business, Financial Risks and Environmental Risks

• Develop studies aiming at proposing

amendments to the market law, including the review of the Decree-Law no. 73/66

• Establish internal program for developing its staff

Projects Plans • Develop Governance Model • Develop Institutional Representation Model • Market development plan - concept • Quantify and identify actions to reduce the regulatory cost

• Propose model and make viable the

introduction of Microinsurance and Insurance products for Low-Income People

• Monitoring the introduction of the Strategic Plan, Management and Projects Actions.

The meeting held in Itaipava, Rio de Janeiro, has been attended by the president, Jorge Hilário Gouvêa Vieira; the 1st vice president, Patrick Antônio Claude de Larragoiti Lucas

(SulAmérica); the following vice presidents: Jayme Brasil Garfinkel (FenSeg/ Porto Seguro), Marcio Serôa de Araujo Coriolano (FenaSaúde/ Bradesco Saúde), Marco Antonio Rossi (FenaPrevi/Bradesco Seguros), Ricardo José da Costa Flores (FenaCap/Brasilcap) and Nilton Molina (Mongeral); the following officers: Antonio Eduardo Marques de Figueiredo Trindade (Itaú Unibanco Seguros), Luis Emilio Maurette (Liberty), Mário José Gonzaga Petrelli (Icatu Seguros), Pedro Cláudio de Medeiros Bulcão (Sinaf), Pedro Pereira de Freitas (American Life), Luiz Tavares Pereira Filho (Seguradora Lider DPVAT) and Renato Campos Martins Filho (National School of Insurance); the superintendent-general of the Central of Services and Protection to Insurance, Julio de Souza Avellar Neto; and the advisors of the Presidency of CNSeg, Cláudia Wilson, José Américo Peón de Sá and José Arnaldo Rossi. The major resolutions as regards Strategic Planning of CNSeg are contained in the Itaipava Letter, fully reproduced in the pages 6 and 7

Presidency President: Jorge Hilário Gouvêa Vieira The president, in the performance of his duties, counted on direct co-operation of the advisors Claudia Wilson, José Américo Peón de Sá and José Arnaldo Rossi. During this year of 2010, it was interest to the insurance industry to apprize the candidates to the Presidency of Brazil as regards the main demands of the market. For that, it has drawn up official document consolidating suggestions and complaints. It has been noted the need for carrying out a Strategic Planning to adjust the Confederation and the four sectorial Federations performance, and the entities position was expressed in the document named Itaipava Letter. It has been observed the need for consolidating CNSeg as entity that mirror the insurance industry wishes as regards the future and, for that, it has been approved the creation of the Center of Studies and Projects, aiming at developing mid an long term projects for the industry. Similarly, it has been encouraged the constitution, by SUSEP, of the Permanent Special Committee, that counts on the attendance of the presidents of CNSeg, FenSeg, FenaPrevi and FenaCap. The offer made by IRB Brasil-Re for selling rooms of its property in Brasília, at the same building where are located the CNSeg facilities, has been accepted with great interest, since it complies with the guidelines to strengthen our representation before Executive, Legislative and Judicial Branches, so that the rooms have been bought.

State-Owned Insurance Company - Chronology of the Facts The idea to constitute a State-Owned insurance company surprised the insurance

industry on May, 2010, when a draft of Provisional Presidential Decree (PPC) arose with the proposal to constitute the Empresa Brasileira de Seguros (EBS). The most surprising were also the government arguments that the market had not capacity to meet the requests of the guarantee insurance for the major infrastructure works, especially those relating to the Growth Acceleration Program (PAC). Furthermore, the PPC was creating the possibility for the government to operate in branches already largely met by the industry, such as property insurance, guarantee insurance and home/ housing insurance for low-income people, and also, including but not limited to projects of infrastructure, energy and shipping industry. Immediately, CNSeg sought to denounce the conflict of interests existent, since the government is simultaneously, assured and insurer of its own businesses, showing that the private market is the best fiscal of the government works than the own government – that could not also operate in branches already fully covered and consolidated by the private market. In order to prove that there is not required federal intervention within these segments, the market showed the strength of its performance: a premiums volume of R$109 billion in 2009, that should achieve R$150 billion in 2012, and, therefore, with all the conditions to offer the guarantees for the infrastructure works of the Country within the PAC schedule, without the need for the government intervention. It is worth remembering, also, the throwback that would be the constitution of a State-Owned insurance company, before the end of the State monopoly of the reinsurance, two years ago, that made possible Brazil accessed global capacity of resources, assuring so, that there will be no difficulties to insure works and businesses of any extent.

Since the opening of the Reinsurance, 118 companies have already came to Brazil, including some of the greatest global players, which, by means of the Brazilian Association of Reinsurers (ABER) demonstrated their concern and the need to continue relying on the stability of the Brazilian government rules. The strong reaction of the private insurance market reversed the government attempt to constitute a State-Owned insurance company. Before the market mobilization, headed by CNSeg, the government backed and decided to negotiated with the market a general agreement solution, that resulted in the proposal of constitution of the Brazilian Guarantee Agency (ABG), or Collateral Manager Agency, name suggested by CNSeg in the last meeting, held in the end of August, to close the proposal. Up to December, 2010, it has not been yet sent to the National Congress a Bill on the subject matter.

Center of Studies and Projects Advisor in charge: José Américo Peón de Sá The constitution of this Center began in June, 2010 upon contracting of the actuary Fernanda Chaves. The Center carried out some projects and advised the other sectors of CNSeg, especially in the following subject matters: Solvency/Credit Risk – Detailed analysis of the model presented by SUSEP on April, 2010, that gave rise to a CNSP Resolution no. 228/2010. From that point, it has been drawn up, in the scope of the Actuarial Committee of CNSeg, a calculation spreadsheet for guidance to the market, including a comparison between the impact study presented by SUSEP and the use of internal data of the companies. Such study counted on attendance of 24 companies of the sector. International Finance Reporting Standards (IRFS) – Liability Adequacy Test (LAT) – It was useful to consolidate proposal sent to SUSEP by the Confederation, as well in contracting an economic advisory to analyze the discount rate to be used in the test.

International Association of Insurers Supervisors (IAIS) – Fernanda Chaves attended the IAIS Annual Conference held in Dubai, from October 25th to 29th. In such forum it was possible to combine the performance – jointly with SUSEP and ANS – of an event with international lectures that would occur before the meeting of the Committee on Solvency and Actuarial Affairs of the IAIS to be held in Rio de Janeiro. Thus, it was held in this City, on November 30th, the event named “New worldwide developments in the Solvency field”, that counted on attendance of four international lecturers, with simultaneous translation, and more than 150 people, including regulators and representatives of the Brazilian market. But the subcommittee meeting of the IAIS, held between December 1st and 3rd, counted on attendance of five experts of the Confederation and Federations, jointly with about 10 attendees from the industry under coordination of such center. Amongst other activities, the center gave data for the text of the Presidential Candidate Project; it gave advisory to the discussion on subsidy and catastrophe fund of the rural insurance; attended all the meetings held by the Actuarial Committee (CAT) (six) and in almost all held by the Committee on Management and Finances (three), since July, 2010; it provided support to draw up and contact the National School of Insurance to provide actuary courses proposed by CAT; it assisted to develop the event program named “The impacts of the new accounting and actuarial standards in the financial statements of 2001”, that would be held on November, 2010 and have been postponed for 2011; it gave lectures on solvency in the “Lectures Cycle” for those who have passed on the examinations for civil servant of SUSEP; and acted to strengthen the relation between CNSeg and Brazilian Institute of Actuary (IBA). In addition to this, are in progress the following works: validation of the DataSeg Project for establishing a market databank within CNSeg; the analysis of the insolvencies of insurance companies occurred in the market and the proposal of new format for assessing the supervision rate to be payable to SUSEP.

Executive Board Executive Officer: Solange Beatriz Palheiro Mendes In the meeting of the Executive Board of CNSeg, held on September 30th, 2010, the president Jorge Hilário Gouvêa Vieira announced officially the constitution of the position of executive office of CNSeg to be taken by Solange Beatriz Palheiro Mendes, who took office on November 1st, after resigning the position of executive office of FenaSaúde. The Executive Board is in charge of put the Strategic Plan into effect, as well as support the positive agenda of the sector, value the institutional image of the insurance and coordinate the actions of common interest to the Federations, among other activities.

subcommittees are constituted from specific subject matters determined by a technical committee, that may be or not by indefinite term. The committees are constituted by indefinite term, have a multi-disciplinary composition, in charge of analyze some points and with the duty to put some actions into effect. And the working groups are constituted to proceed with specific and punctual themes, that may operate in partnership with other entities and accept advisors, and may have extended duration or terminate with the works conclusion. Committees and Subcommittees of CNSeg Actuarial Committee (CAT)

It has been engaged consultancy to present, up to February, 2011, proposal of new governance model for CNSeg.

Committee on Management and Finances (CAF) Committee on Arbitrage (CARB) (it will be absorbed by CAJ) Committee on Legal Affairs (CAJ)

The activities developed by the subordinate superintendences are following reported:

Technical Committees and Subcommittees, Committees and Working Groups The technical committees, bound to specific superintendences, are provided for in the Articles of Incorporation of CNSeg and are in charge of apprize technical matters, upon analyzing, discussing and proposing on subject matters of common interest to the insurance market, for which they issue opinions, draw up working plans and suggest performance standards aiming at solving problems and unifying procedures, with normative or general recommendations.

Committee on Internal Controls (CCI) Committee on Ombudsman Service (COUV) Committee on Information Processes and Technology (CPTI) Committee on Human Resources (CRH) Committee on Reinsurance (CR) Committee on Fiscal Affairs (SCAF) Committees Permanent Committee on Governmental Affairs (CPAG) Committee on Consumption Relations (CRC) Working Groups Workers Compensation Insurance (SAt) Multi-disciplinary – Reinsurance Accounting Intermediation (with FENACOR) Small and Mid Size Companies

While the technical committees are constituted for indefinite term and deal with a group diversified of subject matters, the technical

“Estou Seguro” Project Confederative on Microinsurance

Executive Board of Governmental Affairs Officer: Antonio Mazurek The Executive Board of Governmental Affairs, with principal business office in Brasília, has as Mission to represent CNSeg before federal, state and local governments, with the following duties:

• Monitor daily the process of propositions presented in the Legislative Branches

• Coordinate the Projects Monitoring System (SISPROLEG)

• Send amendments to the technical

committees within regimental terms, as well as submit opinions and/or technical notes to the authors and reporters of the matters presented in the Chamber, Senate and State Legislatures

Main actions in 2010 • Nearly 300 hearings and contacts, made

personally and by phone, with federal and state parliamentarians about matters in progress and of interest to the insurance market, including the sending of:

• Ordinances: 54 • Opinions: 46 • Amendments: 49 • Requests: 16 • Miscellaneous (Votes Separately, Highlights, etc):8

• Emails and varied mailings: 170

• Assist CNSeg and sectorial Federations in

Permanent Committee on Governmental Affairs (CPAG)

• Monitor the sittings en banc and technical

No. of meetings held: 6 No. of members: 32 (represenatives of CNSeg, FenSeg, FenaPrevi, FenaSaúde, FenaCap and Seguradora Líder DPVAT) No. of projects discussed and analyzed: 93

the strategies to be adopted to monitor the Bills committees in the scope of the Legislative Branch

• Manage the information enrollment and

updating as regards matters of interest to the insurance market

• Provide the sending and monitoring of

processes in the Executive and Judicial Branches

• Make agendas for hearings with federal and state authorities, and those from Distrito Federal

• Follow the president and officers of CNSeg in their activities in Brasília

• Participate of hearings granted to CNSeg, by authorities of the Executive, Legislative and Judicial Branches

• Meet with the media in Brasília, after

previous release and guidance of the lines to be considered for each case. Such performance line aims at giving uniformity and coherence to the institutional postures of the Confederation

The Permanent Committee on Governmental Affairs (CPAG), chaired and coordinated by the Executive Board of Governmental Affairs of CNSeg, analyzes, identifies distortions and suggests amendments to the bills, proposals of constitutional amendments and provisional presidential decrees, by sending opinions and amendments to the parliamentarians; and monitors the matters in progress and further actions developed in the National Congress and State Legislatures.

SISPROLEG The Projects Monitoring System, coordinated by the Executive Board of Governmental Affairs, allows the enrollment, feeding and monitoring of all the Bills of interest to the market, offering subsidies and support to the works of Legal Superintendence and the Executive Board of Governmental Affairs, as

well as to the technical and strategic areas of CNSeg and Federations. On the other hand, SISPROLEG constitutes the database for

performance of the Permanent Committee on Governmental Affairs (CPAG), currently with nearly 900 projects enrolled.

Legislative Process Bills and Provisional Presidential Decrees the presentation of opinions and amendments to be sent to the parliamentarians pointing distortions and therefore suggesting amendments to the Bills drafting.

The progress of the Bills, constitutional amendments, provisional presidential decrees and other actions developed in the National Congress and State Legislatures is analyzed and, as the case may be, is recommended Legislative Branches 700 600 500 House of Representatives

400

Federal Senate

300

State Legislature

200 100

577

202

212

Projects by Segments

250 220 150 100 50 0

Health 220 Consumer 106 DPVAT 91 Insurance 83 Motor 80 Miscellaneous 49 Traffic Code 36 Labor Law 33 Civil Law 25 Tax Law 24 Life 21 Pension 20 Criminal Law 19 Financial System 19 Taxes 19 Personal Accident 15 Civil Liability 15 Procedural Law Home/Housing 10 Workers Compensation 9 Databank Consolidation of the Labor Laws (CLT) 8 Others

Bill no. 3.555/2004 The legislative action in the period that deserves to be highlighted is the operation of the Special Committee (temporary), constituted by the House of Representatives addressed to the appraisal, discussion, octaves of sectors associated with insurance activity and, finally, resolution in respect of the Bill no. 3.555/2004, suggested by the lawyer ErnestoTzulrinik and presented by the deputy José Eduardo Cardozo (PT-SP), whose purpose is to regulate the conditions of the insurance policies and agreements executed in the Country. Finished the legislature and once the Special Committee, notwithstanding the works developed, did not decided on the matter, the said Bill should be filed definitely by the Board of the House of Representatives. It is worth mentioning, however, that the deputy Moreira Mendes (PPS-RO), president of the Special Committee, before the failure of the proposition analyzed by that body, presented, at the end of the legislature, a new Bill, whose number is 8.034, of 2010, which although the building and drafting is different from the Bill about to be filed, has the same purpose: “Establishes general standards for the private insurance agreements and revokes provisions to the contrary”. Such Bill, in compliance with the Internal Regulations of the House of Representatives, should be filed as occurred with that previously suggested. However, the author, deputy re-elected, has the right to require its restart and, thus, the Bill will be subject to appraisal again.

Other Relevant Matters House of Representatives • Bill no. 3.411, of 2008, of the deputy

Giacobo (PR-PR), aiming at extending the insurance policies period equivalent to the permanence time of automotive land-road vehicles within repair shops, was rejected based on brief of the appellee presented by CNSeg

• Bill no. 3.266, of 2008, of the deputy

Adilson Soares (PR-RJ), on microinsurance. Although approved by the Committee on

Finances and Taxation, its progress has not been concluded

• Bill no. 7.080, of 2010 (Senate Bill no.

437, of 2008), on DPVAT installment plan: approved in the Federal Senate, is in progress in the House of Representatives

• Many other Bills deserved, each one within its time, to be duly monitored

Federal Senate • Senate Bill no. 81, of 2006, of the senator

Gilvan Borges (PMDB-AP), aims at changing the Insurance Policies into Extra-Judicial Bonds, was filed, after several negotiations

• Further Bills have been monitored during the period

Matter Changed into Legal Norm Presidential Provisional Decree no. 472, of 2009, changed into Legal Norm by the Law no. 12.249, of 2010 as regards, amongst other subject matters, Supervision Rates charged by SUSEP. The matter required special negotiations, since the rates primarily proposed would expose the insurance activity because of the burden excessively hard. The mentioned rates have been reformulated into Conversion Bill and approved by the two Houses of the National Congress, in acceptable parameters.

Matter Approved and Depending on Signing into Law by the President of Brazil Senate Bill no. 372, of 2005, of the senator Romeu Tuma (PTB-SP) – Bill no. 345, of 2007, in the House of Representatives –, regulates the commerce of parts and component of vehicles damaged. Approved in the Federal Senate, the Bill was amended in the House of Representatives. When returning to its House of origin, the Federal Sanate deliberated on the amendments of the House of Representatives in the sitting held on December 14th, 2010 and, therefore, the matter was sent to signing into law by the President of Brazil. The general belief is that the matter, once converted into

Legal Norm, will impact the uses and practices related to the question of the automotive parts in the Country.

Executive Branch The Federal Government will decide to edit Presidential Provisional Decree aiming at constituting a State-Owned company to act in the insurances segment, mainly those related to major government works. Under guidance, coordination and direct participation of the presidency of CNSeg, several actions and dialogues with the economic sector of the government have been developed in order to prevent the State-Owned intervention in the private market. The action was successful

and the government decided to postpone the implementation and no more to constitute the State-Owned insurance company, changing the focus to a partnership with the private insurance market in the Country.

New Political Scenario With the elections held in 2010, under the egis of our democratic process, have been initiated a new legislature and a new government undertook the destinations of the Country. And within this new scenario, the insurance market is liable for, like the further economic activities, establishing a new institutional relationship with the governments of Brazil and Federated Units.

Superintendence of Management and Finances Superintendent: Luís Felipe F. de O. Santos The year of 2010 was marked by changes in the management of the Superintendence of Management and Finances, whose efforts were focused as much in maintaining the service level to current requests as in appraising and planning their developments. The Superintendence is in charge of the administration and financial management of the following institutions: • Fenaseg/CNSeg • FenSeg; FenaPrevi; FenaSaúde and FenaCap • CRMS (Seguradora Mineira) • State Trade Union of the Insurance Companies - RJ/ES The holder of the Superintendence of Management and Finances is, currently, in charge of the vice presidency of the Imobiliária Seguradoras Reunidas S.A., company of which FENASEG is majority shareholder. The organizational structure of the Superintendence of Management and Finances has been changed aiming at eliminating the superpositions existent and promoting the professional development of its employees,

currently composed by the following managements: • Financial • Accounting • H. R. & P. D. • Operational and Budgetary • Administrative The Management of IT Infrastructure was embodied to the structure of the Central of Services and Protection to Insurance, as per Executive Board decision. The Superintendence of Management and Finances absorbed the activities of issue and delivery of the invoices (NFS-e) as regards SNG and SIRCOF (nearly 4 thousand invoices per month), obtaining costs reduction of R$14 thousand per month. It has also embodied to its duties the need to meet the new requirements of information requested by the City Hall of Rio de Janeiro in relation to the service providers engaged. As regards compliance, actions have been taken to meet the Ordinance 1.510 of the Ministry of Labor and the law that governs the wages payment.

Special attention has been given to the review and/or establishment of Internal Policies, Rules and Procedures. The improvement of processes has been subjected to constant analysis. In 2010, it has been introduced the centralization of the judicial freezing (DPVAT lawsuits) in single deposit account, the use of the EBTA when paying the airplane tickets and the simplification of activities pursuant to the taxes payment.

Good results have been achieved in the renegotiating of agreements, obtaining costs reduction in the renewal of property and motor insurances and in the renewal proposal of printers rent agreement. In respect of Human Resources it has been run the policies of educational training and assistance, health and motivation of the employees.

Superintendence of Institutional and Consumer Affairs Superintendent: Maria Elena Bidino In 2010, deserve to be highlighted the actions addressed to the insurance consumer, in the year where the Consumer Protection Code celebrated its 20th anniversary, mainly the performance of the 1st and 2nd Interactive Conferences on Insurance Consumer Protection and the implementation of the “Estou Seguro” Project, whose purpose is to provide information on risks and insurance for the low-income people. It may be concluded that the works developed by the Committee on Consumption Relations, the Committee on Ombudsman Services of the Insurance Market and the “Estou Seguro” Project focused their actions on consumer protection. The Committee on Consumption Relations has been intended for performing the two conferences and proposing to identify the fundamental information in order that the consumer may understand the insurance coverages he is buying. It is known that the assured did not read the insurance conditions and, even if doing so, the technical and legal terminology hinder him to understand the agreement. The adoption of a clear, objective and of easy comprehension wording is the challenge of the insurers to meet the wishes of their consumers. The Lectures Cycle developed by the ombudsmen also deserves to be highlighted,

since its intent has been better prepare the practitioners in charge of meet the assureds complaints and mediate the possible conflicts in the consumption relation. CNSeg believes that the insurance consumer protection means the industry protection.

“Estou Seguro” Project Coordinator: Maria Elena Bidino It is a project of CNSeg initiative which counted on adhesion of 17 insurance companies and the participation of SUSEP, FENACOR and National School of Insurance. Aiming at studying the proper communication to arouse consciousness and comprehension on insurance, highlighting the meaning of risk prevention and insurance protection, CNSeg presented a project to the International Labor Organization (ILO). Through the Microinsurance Innovation Facility, ILO selects projects within international scope for developing the Microinsurance and the CNSeg project has been one of the 18 selected in the round held on March, 2009, that had 180 projects enrolled. The ILO subsidy to support the development of the CNSeg project amounted to US$350 thousand, considering the CNSeg counterpart in the amount of US$150 thousand.

The trade name of the project was “Estou Seguro” and aimed at changing the insurance perception in the low-income population. Its objective has been the creation and validation of a replyable methodology to inform and touch low-income populations, in urban agglomerates, on risk and insurance management. To put the project into effect, it has been choosed the Institute of Studies of Work and Society (IETS), taking into account its expertise in microcredit. The Project included the exhibition of a film, the broadcasting of soap operas and performances of street theater with texts on risks and several insurance coverages. Such information are available in the site of CNSeg. For constituting the WG and committing the insurance companies, have been held two preliminary meetings in the Confederation auditorium, on January 7th and 14th, aiming at presenting the project for the insurance companies and representatives of SUSEP, National School of Insurance, FENACOR and IETS.

Working Group on “Estou Seguro” Project Meetings held: 8 WG attendees: 17 representatives of the insurance companies (Ace Seguradora, American Life, Bradesco Auto/RE Companhia de Seguros, Bradesco Vida e Previdência, Caixa Seguradora, Capemisa Vida e Previdência, Cia. Excelsior de Seguros, Companhia de Seguros Aliança do Brasil, Icatu Seguros, Itaú Seguros de Auto e Residência, Mapfre Vera Cruz Seguradora, Mongeral AEGON Seguros e Previdência, Sinaf Previdencial Cia. de Seguros, Sul América Capitalização - SULACAP, SulAmérica Cia. Nacional de Seguros, Tokio Marine Seguradora, Zurich Seguros) and representatives of SUSEP, FENACOR, National School of Insurance and CNSeg.

Major Phases • Approval of the texts used in the media (short film, street theater, and soap opera)

• Definition of the sales policy to be adopted in

the project • Definition of the broker liable for commercializing the products in the Favela Santa Marta (Emílio Rodrigues Gomes) • Course to qualify capitalization and life and pension insurance broker, offered by Bradesco Seguros for people selected in the community to assist the broker • “Casa do Seguro” (insurance information and sales station) – reform financed by the insurance companies, CNSeg and National School of Insurance. • Commitment of five dwellers from the community in the intermediation process, with monthly remuneration of one minimum wage (during four months) • Approval of the project logo and the publicity pieces • Presentation of the research results: quantitative (in 600 dwelling) and qualitative (two focus group) carried out by IETS • Distribution of CD/DVD to the insurance companies with research result and short film about the project • Report of the broker in charge on training and sales • Distribution of t-shirts with the project logo to the people in charge of the information diffusion and products sale. • Visit of the WG attendees to the Favela Santa Marta • Visit of Craig Churchill, person in charge of the Microinsurance Innovation Facility, of ILO, to CNSeg and Favela Santa Marta – drafting of the agenda • Samba Competition on the theme “Seguro”, with award financed by IETS • Report on the result of the projects commercialization • Presentation by IETS of schedule and budget for Phase II of the project

Cobertura-Performance Award Due to the rebound and relevance of the “Estou Seguro” Project, CNSeg has been elected “Entity of the Year” in the 13th Edition of the Cobertura-Performance Award. The

advisor of the presidency, José Américo Peón de Sá represented CNSeg in the award solemnity, held on November 29th, in São Paulo.

Committee on Consumption Relations President: Maria Helena Darcy de Oliveira (Icatu Seguros) Mettings held: 8 ordinary (the first on January 28th), and 2 of the Executive Center constituted by the Committee for directed studies and specific actions No. of members: 35 (19 holders, 2 deputies, 3 guests, 4 representatives of the Federations and 7 of CNSeg)

Major Actions • Analysis of the most relevant Bills in relation to consumer defense and protection

• Organization and performance of the 1st and 2nd Interactive Conferences on Consumer Protection of the Insurance Market

• Drafting of the Letter for the1st Conference • Relationship strengthening with Government

(regulatory agency and consumer defense bodies), market federations (Fenseg, FenaPrevi, FenaCap and FenaSaúde), media and clients

• Discussion on issues with the Extended Guarantee Insurance

• Constitution of sub working groups to draw up training on insurance consumer rights

• Establishment of adhesion indexes to the

Letter of the 1st Interactive Conference on Insurance Consumer Protection; and to advise the Federations work as regards drawing up the key points by business line

Proposals • Development of key points • Drafting of document with questions and

answers about insurance to diffuse in the CNSeg site

• Creation of databank on consumers who have opted do not receive suppliers calls

• Definition of guidelines for the e-commerce

Extraordinary Meetings • Meeting held on January 26th, in Brasília,

with Ricardo Morishita, officer of the Department of Consumer Defense and Protection (DPDC), and Juliana Pereira da Silva, general coordinator of the National Information System on Consumer Defense (SINDEC). The purpose was to know the result of the enrollment of the complaints justified and not answered by the financial system, particularly by the insurance market

• Meetings held in the FenaPrevi, with the

Committee on Risk Products and the Committee on Survival Products, to present the proposal about publicity of life insurance for the consumer and identification of the key points for the life insurances

• Meeting held with the Central of Services

and Protection to Insurance in order to present to the Committee on Consumption Relations of the Telemarketing Calls Block System (SIBLOQ), which centralizes all the telephone data from the different Programs of Consumer Orientation and Protection (PROCONs) of Brazil, in a database administered by the Central of Services of CNSeg, aiming at facilitating the research work of the insurance companies

• Meetings with journalists of the Folha de SP

and of Valor Econômico newspapers and visit to TV Globo e to GloboNews, in São Paulo, held on July 27th; with journalists of the O Globo newspaper, in Rio de Janeiro, held on August 6th; and with journalists of the Jornal da Tarde (Grupo Estado), held on August 25th.

• Meetings with the president and the officers

of PROCON SP, in São Paulo, held on August 18th; and with the president and the lawyer of the Brazilian Institute of Consumer Defense (IDEC), in São Paulo, held on August 25th, for reporting on the constitution of the Committee on Consumption Relations and its purposes

Actions Performed • 1st Interactive Conference on Insurance

Consumer Protection (General Insurance, Open Private Pension, Supplementary Health and Capitalization), held on March 3rd, in Rio de Janeiro • 2nd Interactive Conference on Insurance Consumer Protection, held on September 10th and 11th, in São Paulo

Committee on Microinsurance President: Antonio Cássio dos Santos (Mapfre Vera Cruz Vida e Previdência) Meetings held: 2 No. of members: 21 (representatives of the four sectorial Federations, from 9 insurance companies and 1 external advisor)

• Manage the complaints sent via SUSEP with

frauds evidence, and also the complaints sent via PROCON, BACEN, IRB-Brasil Re, Federations, State Legislatures and further consumer defense bodies • Establishing the Standard System for Measuring Claims Management Indexes (SIGER) • Consolidation of suggestions for amendments to the draft of rule placed by SUSEP in Public Hearing no. 07/2010, that disposes on the compulsory constitution of ombudsman services for the companies that compose the insurance market

Proposals • Establishing the channel comissão. •

Major Subject Matters Analysis of the Bill no. 3.266/2008, that disposes on the constitution of insurance companies specialized in microinsurance, brokers specialized and makes other provisions; comments on suggestions sent by FenaPrevi.

Committee on Ombudsman Services of the Insurance Market This committee is composed by representatives of the insurance groups that instituted their ombudsman services, which correspond to 95% of the insurance market total premium. President: Mário Teixeira de Almeida Rossi (Grupo Mapfre) Meetings held: 7 No. of members: 68 (34 holders, 29 deputies e 5 employees of CNSeg)

Major Subject Matters • Statistics on complaints received by

the ombudsman services by branch of insurance • Statistics from SUSEP on consumer complaints and information

• • • •

ouvidoria@cnseg.org.br in the site of CNSeg Updating the ombudsman services of the insurance companies in the site of CNSeg and the inclusion of the ombudsmen resume Establishing key points by branch of insurance Recommendations as regards minimum standardizing to deal with the complaints Commitment of the insurance brokers, through FENACOR, in the process for reducing the complaints Divulging the operational procedures of the ombudsman services amongst the Committee members

Lectures Cycle • The Ethics and the Consumer Behavior –

April 8th, São Paulo. Lecturer: Sérgio Nery; debater: Paulo Amador (Seguradora Líder DPVAT); mediator: Mário Rossi (Grupo Mapfre) • The Consumption Relation in the Insurance – May 13th, Rio de Janeiro. Lecturer: Angélica Carlini; debater: Maria da Glória Faria (CNSeg); mediator: José Júlio C. Melo (Grupo Porto Seguro) • Ombudsman Service As Practice of Corporate Governance – June 17th, São Paulo. Lecturer: Floreal Rodriguez; debater: José Eduardo Batista (Kyoei do Brasil); mediator: Carlos Manuel Martins (Royal & SunAlliance Seguros)

• Conflicts Handling System and the Business Environment – August 12th, Rio de Janeiro. Lecturer: Gabriela Asmar; debater: Maria Helena Darcy (Grupo Icatu Seguros); mediator: Luciana Galvão de Oliveira (Brasilprev Seguros e Previdência) • Arbitrage and the Insurance in Brazil – October 20th, Rio de Janeiro. Lecturer: Pedro Batista Martins; mediator: Sérgio Mello (Pellon & Associados)

Committee on Reinsurance President: Marcus Viana Clementino (Sul América Cia. Nacional de Seguros) Meetings held: 7 ordinary and 1 extraordinary (Multi-disciplinary WG) No. of members: 46 (26 holders, 16 deputies e 4 employees of CNSeg)

Major Subject Matters • Development of a Reinsurance Offers • • • • •

• • •

Control System – Gestor-Re (former SISCOR) Intragroup operations Tax on Financial Transactions (IOF) over Reinsurance Operations Drafting proposal to account the Excess of Loss Reinsurance Premium Information that should be sent by the insurers and reinsurers – SUSEP Circular no. 385/2009 Accounting of the reinsurance commission, reimbursement to ceding company by the reinsurer, of the administrative and acquisition expenses paid Named and Operational Risks – Article 9 of the Circular no. 395/2009 CNSP Resolution no. 173/2007 Constitution of subgroups to draw up a Reinsurance Glossary; review of the Recommendations on the Drafting of Reinsurance Agreement, available in the site of CNSeg; development of a Guidance of Good Practices for Reinsurance Contract (Contract Certainty); and on-line technical certification on reinsurance, such as the certification of the Lloyd’s and London Market Introductory Test (LLMIT)

• Reinsurance Conference held in 2011, in Rio de Janeiro • CNSP Resolutions nos. 224 and 225, dated December 10th, 2010

Committee on Human Resources President: Maria Helena Cardoso Monteiro (Sul América Cia. Nacional de Seguros) Meetings held: 6 ordinary and 1 extraordinary No. of members: 63 (32 holders, 26 deputies and 5 employees of CNSeg)

Major Subject Matters • Ending of the 2010 Joint Convention of • • • • • •

Work (CCT) Amendments to the Accidentary Prevention Factor (FAP) Research on the insurance market wages Electronic Time Register (Ordinance no. 1510/2009) Safety issues of the new system of Electronic Time Register (REP) HR Meeting in the insurance market / National School of Insurance Drafting of employer agenda for negotiating the 2011 Joint Convention of Work (CCT)

In 2010, were held 24 studies on themes of the work agenda and other themes requested by the Committee members to guide the Human Resources management.

Thematic Committee: Employer/Trade Union Meetings held: 4

Major Subject Matters • Trade Union Contribution. • Rest Paid • Institution of the insurance technician position

• Reduction of the working journey • Complaint agenda of the 2010 Joint

Convention of Work of the Insurance Companies’ Employees.

Technical Certification The CNSP Resolution no. 115/2004 establishes minimum conditions for the Technical Certification of Emplyoees and Similar of the Insurance Companies, Capitalization Companies and Open Private Pension Entities. FENASEG was one of the accredited entities to perform the technical certification, as regulated by the SUSEP Circular no. 290/2005, enabling it to issue the Certificate by Working Time for eligible practitioners and similar and with five or more years of continuous working in the certification area. It has been established a system for this purpose, whose instructions were informed to the market by PRESI Circular no. 014/2005, dated June 21st, 2005. The person in charge of HR of the insurance company begins the requirement process when accessing the Databank for Technical Certification by Working Time (BDCT) system, available in the site of CNSeg that issues such certificate only if the data filling and the conditions meet are in compliance with the regulations requirements. The certificate validity is five years, from the date of its issue. Finishing this period, the system sends notice to restart the process. In 2010, CNSeg issued 109 certificates. From the beginning of the technical certification, on December, 2005 to November, 2010, were issued a total of 7,682 certificates in the following certifiable areas/segments:

• • • • • • • • • •

Public Service – Insurance: 2,470 Public Service – Pension: 593 Public Service – Capitalization: 207 Internal Controls: 815 Losses Adjustment – Motor: 1,235 Losses Adjustment– Insurance: 1,186 Losses Adjustment – Pension: 173 Direct Sale – Insurance: 247 Direct Sale – Pension: 667 Direct Sale – Capitalization: 89

National Institutional Relations Lectures Given Lecturer: Maria Elena Bidino

• IV Brazilian Congress of Insurance and

Pension Law of AIDA, in the panel “The Insurance and the Brazilian development, insurance perspectives and possibilities as peace and social development tool”, held on March 19th, Porto Alegre, Rio Grande do Sul • Lectures Cycle of the Group on Tax Debates of Rio de Janeiro (GDT Rio), on “Taxation in the Insurance and Reinsurance Market”, held on July 13th, in the Centro Cultural da Justiça Federal, Rio de Janeiro, RJ • I Coloquium on Microsseguro, about the theme “Change in the Insurance perception by the C and D classes”, held on August 17th, in the National Academy of Insurance and Pension (ANSP), São Paulo, SP • Lectures Cycle of environment for those who made the 2010 examinations for civil servant in SUSEP, held on October 18th, in the Brazilian Central Bank Auditorium, Brasília, DF Lecturer: Ricardo Tavares Pereira

• 6th State Congress of Insurance Brokers of

Minas Gerais state, on Microinsurance, held on August 20th, in Caeté, Minas Gerais

Attendance in Seminars and Congresses • II Brazilian Annual Conference on

Reinsurance, held on March 4th and 5th, in the Copacabana Palace Hotel, Rio de Janeiro, RJ • 2nd Seminar of Lloyd’s, held on July 27th, in the Copacabana Palace Hotel, Rio de Janeiro, RJ • Joint Meeting on Reinsurance – AIDA/ANSP GNT, held on July 27th • V National Forum on Life Insurance and Private Pension, promoted by FenaPrevi, on September 15th and 16th, in São Paulo, SP

• Event “Reinsuring the future”, of Munich Re, held on September 17th, São Paulo, SP

Relations with National School of Insurance Partnership between National Confederation of the Brazilian Agriculture and Livestock (CNA) and National School of Insurance, aiming at drafting the content of the textbook for clarifying and guiding the farmer on the rural insurance importance to mitigate production risk and to improve the management of the farming activity, entered into on January 21st. Classes in 2010 in the courses promoted by the National School of Insurance, given by Maria Elena Bidino: “Reinsurance MBA” – on March 10th, September 21st and 23rd ; inaugural class “Reinsurance Practices” – on March 15th; inaugural class “Insurance and Reinsurance MBA” – on May 3rd, “Reinsurance Course for those who made the 2010 examinations for civil servant in SUSEP” – from November 18th to December 19th.

International Relations Attendance in international forums on insurance.

Inter American Federation of Insurance (FIDES) FIDES congregates, as acting members, several representative entities for the private insurance companies, located in 18 countries of Americas and Iberian Peninsula, amongst them, CNSeg. Representing the president of CNSeg, the holder of this Superintendence attended the FIDES Annual Meeting, held on October 5th, in Montevideo, Uruguay. Major Subject Matters • Management Report of the Secretariat General • Microinsurance Project – Multilateral Investment Fund / Inter American Development Bank (FUMIN / BID) • Microinsurance Database Project - World Bank - FUMIN / BID

• Alta Dirección de Aseguradoras Seminar • Eminence Award to the Ibero American Insurer • Proposal of the Montevideo Statement

FIDES entered into agreement with Inter American Development Bank (BID) and Multilateral Investment Fund (FUMIN) as regards a Microinsurance Project in Latin America and Caribbean, to be performed during 36 months (from November, 2009 to November, 2012). The following countries were selected and accepted to adhere to the project: Brazil, Mexico, Venezuela, Guatemala, Colombia and Peru. The program is composed by four phases:

• Appraisal of the well succeeded experiences • Preparing a pattern of minimum requirements by country • Capacities Building Plan • Institutional strengthening and diffusion of lessons learned

The project also includes the transfer of US$50 thousand, for each of the countries that will present a microinsurance project to be put into effect in the proposer country. On October 6th, in Montevideo, Uruguay, was held the I Inter-American Forum on Microinsurance that is also part of such project.

Latin American Integration Associaton (ALADI) With principal business office in Montevideo, ALADI holds and manage all the regional agreements in Latin America, such as Southern Cone, Mercosul, Andean Pact and Central American Association Countries, assisting and supporting all bilateral agreements. Southern Cone CNSeg is invited to support the Insurance sector, by the following organisms and institutions:

• National Land Transportation Regulatory

Agency (ANTT) – To operate basically in Cargo Insurance; Performance Bonds, in its several modalities; Passengers’ Liability,

in addition to aspects of the road safety and frontier controls. Such actions include, basically, FenSeg.

• Ministry of Transportation – To operate in

the same areas requested by ANTT, and also in the several modalities of the Marine and Air Cargo Insurance, including, basically, FenSeg

• Foreign Ministry – In addition to the above

themes that are discussed in the meetings held by the Frontier Committee, it is the organism in charge of the Green Letter Agreement. Such actions include, basically, FenSeg

• NTC & Logística and Brazilian Association

of International Transportation (ABTI) – They ask for the insurance segment support to draft business and agenda suggestions in the meetings coordinated by the government organisms aforementioned, and also meetings to guide the associated carriers, including, basically, FenSeg

Mercosul In the Mercosul, the subject matters discussed in 11 Working SubGroups (WSGs). The WSG4 approaches the matters related to Banks and Services, including, however, Insurance. The insurance approaching is institutional, considering that in addition the need to approve formally all the themes related to specific insurances, handled and approved in any of the further 11 WSGTs, it is in the WSG4 where is managed the exclusion of asymmetries for the prospect integration of the sector within the Mercosul scope. Thus, the action includes, basically, CNSeg. Amongst the most controversial themes, are those related to Solvency Standard, Reinsurance, Currencies, Products and Acquisition Structure. The WSG5 approaches the matters related to Transportation, including, basically, FenSeg. 10 meetings were held, being two within the Mercosul scope and eight within the ALADI scope, in which CNSeg was represented by external advisor.

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 190 supervisory authorities of insurance of more than 140 countries, as members, and also counts on participation of more 120 insurers, reinsurers and insurance associations of countless countries, as Observers. SUSEP is taking part of the composition of its Members since 1996 and CNSeg, as Observer Member, since 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 developing their systems standards and their practices to control the insurance activity. The 17th IAIS Annual Conference was held from October 27th to 29th, in Dubai, approached the theme “The portal to rely upon the insurance industry”. The event convened 468 practitioners from 91 countries that shared experiences about the new supervision standards imposed by the 2009 financial crisis. CNSeg was represented by the president Jorge Hilário Gouvêa Vieira, the superintendent Maria Elena Bidino and the actuary Fernanda Chaves. The Conference also counted on participation of Osvaldo do Nascimento and Carlos André Guerra Barreiros (Itaú Vida e Previdência) Major Subject Matters

• Financial Stability and Systemic Risk:

differential between the banking and the insurance segments as source of systemic risk; change in the supervision focus, including the insurance companies; macroprudential watch to identify new types of risks that may arise from the insurance market • Impacts of the International Financial Reporting Standards on the insurance companies and the insurance regulation:

•

presentation of the International Accounting Standards Board (IASB); single standard for the insurance accounting coherent to the regulation; the major concerns as regards the draft presented are related to the discount rate and the provisions for the transition ComFrame Project: supervision structure tailor made for Internationally Active Insurance Groups (IAIGs): common language used by the national supervisors by the convergent and comparable regulation Regulatory Framework for Insurance Companies Liquidation: insured protection fund; pre-financing to guarantee a liquidation that causes the least possible disturbance in the market; international co-operation and coordination need Similarities and Differences amongst the Supervisors Answers to Financial Crisis: questions and scenarios not expected were very difficult to manage; insurance companies need to be aware of the impact of extreme events; supervisors should study the International Monetary Fund (IMF) and Financial Stability Board (FSB) publication IAIS Standards implementation

International Insurance Society (IIS) Non-profit institution, formed in 1965, is composed by more than 1,000 members from 92 countries. CNSeg is its affiliated since 2007, as corporate member. In 2010, by invitation of the CEO of IIS, Michael J. Morrissey, the president of CNSeg, Jorge Hilário Gouvêa Vieira, filled the vacancy left by Osvaldo do Nascimento in the Board of Directors of the institution. The 46th IIS Seminar was held in Madrid, Spain, from June 6th to 9th, and the theme approached was “The consequences of the financial crisis”. Major Subject Matters

• Recovery of the market confidence,

threatened due to the financial crisis

• Impacts of additional capital requirements for the consumer • Impact of the regulatory amendments to the business strategies and investors perspectives in the insurance market

CNSeg was represented by the president, Jorge Hilário Gouvêa Vieira and the superintendent Maria Elena Bidino. The seminar also counted on attendance of Marco Antonio Rossi (Bradesco Seguros), Carlos Eduardo Corrêa do Lago (Bradesco AutoRe), Osvaldo do Nascimento (Itaú Vida e Previdência), Paulo Miguel Marraccini (Allianz). The representatives of the National School of Insurance, Robert Bittar, Renato Campos Martins Filho, Claudio Roberto Contador and Maria Luiza de O. Martins also attended the seminar. During the event, was confirmed the City of Rio de Janeiro to host the 48th IIS Annual Seminar, to be held in 2012.

European Insurance and Reinsurance Federation (CEA) The European Insurance and Reinsurance Federation is composed by 33 representative entities of insurance and reinsurance, including 95% of the total premium income from the European Union. The 2nd International Insurance Conference was held on June 11th, in London, and the theme was “The insurance as a world of changes”, being debated by 20 of the major international insurers and regulators, during the three panels:

• The Presidents View: How did the insurers

react and survive to the international financial crisis? How they are preparing themselves for the world in change? • The Assureds View: What do the assureds expect from the insurers? • The Regulators View: How the regulators will react before the consumers and industry expectation? CNSeg was represented by the president Jorge Hilário Gouvêa Vieira and the superintendent Maria Elena Bidino. The

Conference also counted on attendance of Paulo Miguel Marraccini (Allianz), Carlos Eduardo Corrêa do Lago (Bradesco AutoRe) and Renato Campos (National School of Insurance). The CEA reports “Insurance: a unique sector. Why insurers differ from the Banks?” and “Why excessive capital requirements harm consumers, insurers and the economy?” were made available in the site of CNSeg.

International Meeting of Insurance Associations (IMIA) The Insurance Associations promote annual meetings that precede the CEA and the IAIS Conferences in order to handle themes related to the Standards in discussion on control and supervision, as well as to define positions that reflect the common interest to the insurance industry. In meeting held on June 10th, in London, IMIA presented its members position on the subject matters that were approached during the “2nd International Insurance Conference” promoted by CEA, held in the same place, on June 11th. Major Subject Matters

• Insurance Scenario in the world in change • Recognition of the difference between banks

and insurers • Risk of an excessive capital requirement • Strengthening of the Network International of the Insurance Associations CNSeg was represented by the president Jorge Hilário Gouvêa Vieira, the superintendent Maria Elena Bidino, the superintendent general of the Central of Services and Protection to Insurance, Julio Avellar, and the superintendent Renato Pita. The meeting counted also on attendance of Carlos Eduardo Corrêa do Lago (Bradesco AutoRe). On October 25th and 26th, in the City of Dubai, Arab Emirates, was held the second meeting of IMIA.

Major Subject Matters

• Standards on fight against money laundering • Proposal to found an International Federation that was not approved • Draft of letter sent to the G-20 leaders • Subject matters that would be approached during the lectures given in the17th IAIS Conference held between October 27th and 29th.

CNSeg, was represented by the president Jorge Hilário Gouvêa Vieira, the superintendent Maria Elena Bidino and the actuary Fernanda Chaves.

IMIA Members Association of British Insurance (ABI), Association of Bermuda Insurers and Reinsurers (ABIR), American Council of Life Insurers (ACLI), All Russian Insurance Association (ARIA), American Insurance Association (AIA), Association of Savings and Investment of South Africa (ASISA), Association of Life Insurance Companies (ALIC), Association of Spanish Insurers Unespa, Canadian Life & Health Insurance Association (CLHIA), European Insurance and Reinsurance Federation (CEA), Brazilian Insurance Confederation (CNSeg), Federación Interamericana de Empresas de Seguros (FIDES), Fédération Française des Sociétés d’Assurances (FFSA), German Insurance Industry Association (GDV), General Insurance Association of Japan (GIAJ), Group of North American Insurance Enterprises (GNAIE), International Insurance Society (IIS), Insurance Council of Australia (ICA), International Underwriting Association (IUA), Korea Insurance Research Institute (KIRI), Life Insurance Association of Japan (LIAJ), Lloyd’s, Property Casualty Insurers Association of America (PCI, PIOB and Toronto Centre), Polish Chamber of Insurance (PIU), Reinsurance Association of America (RAA), Russian Association of Motor Insurers (RAMI), South African Insurance Association (SAIA), The Geneva Association.

Network of Insurance Associations Relationship network composed by representative entities from the Insurance and Reinsurance market, with 40 associations representing 68 countries of five continents. On November, it was sent to the G-20 leaders the letter signed by such associations group, defending the adoption of specific regulation for the Insurance market, different from that used for the financial market, before the particular features of the Insurance operations. CNSeg subscribed such letter. Participants In addition to CNSeg, the following institutions endorsed such letter: Association of British Insurance (ABI), Association of Bermuda Insurers and Reinsurers (ABIR), American Council of Life Insurers (ACLI), American Insurance Association (AIA), Association of Savings and Investment of South Africa (ASISA), Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), Association of the Insurance and Reinsurance Companies of Turkey, Austrian Insurance Association (VVO), America´s Health Insurance Plans (AHIP), Asociación Mexicana de Instituciones de Seguros (AMIS), Association of Spanish Insurers (UNESPA), Czech Insurance Association (CAP), Canadian Life & Health Insurance Association (CLHIA), European Insurance and Reinsurance Association (CEA), Chilean Insurance Association (AACH), Dublin International Insurance and Management Association (Dima), Dutch Association of Insurers, Federación Interamericana de Empresas de Seguros (FIDES), Fédération Française des Sociétés d´Assurances (FFSA), German Insurance Industry Association (GDV), General Insurance Association of Japan (GIAJ), Group of North American Insurance Enterprises (GNAIE), Hong Kong Federation of Insurers, Insurance Association of Pakistan, Insurance Bureau of Canada (IBC), Insurance Council of Australia (ICA), Irish Insurance Federation, National Association of Insurance Companies (ANIA), Italy, Korea Life Insurance Association (KLIA), Life Insurance Association of Japan (LIAJ), Life Insurance Association of Malaysia,

Life Insurance Association of Singapore, Lloyd’s, Philippine Life Insurance Association (PLIA), Property Casualty Insurers Association of America (PCI), Polish Chamber of Insurance (PIU), Reinsurance Association of America (RAA), Russian Association of Motor Insurers (RAMI), South African Insurance Association (SAIA), Thailand Insurance Association.

Munich Re Foundation The Munich Re Foundation aims at solving key issues that may be affect the future of the society. Its main interest is to play an active role in searching for innovating solutions in the scope of globalization and international development and their impacts on the future of the humankind in countries that present different development stages. Within this context, the segments in which the Foundation may be involved actively are so many and diversified, including education and training, science and research, disasters prevention, environment protection and public health. The 6th Microinsurance Conference, promoted by Munich Re Foundation, was held between November 9th and 11th, in Manila/Philippines, counted on 520 participants from 50 countries. At the end of the conference, the superintendent Maria Elena Bidino highlighted that in Brazil, as in other countries where microinsurance is consolidating, it is a great challenge to be overcame to offer insurance for the poorest people. On behalf of the president of CNSeg, it was formalized invitation to have Brazil as the next hostess of the International Microinsurance Conference, scheduled for November 8th to 10th, 2011.

The Geneva Association – International Association for the Study of Insurance Economics It is an organism that convenes the major insurance executives of the world and whose purpose is to develop research and studies on the insurance economy and to diffuse information that are important to the sustainable performance of the market. The Geneva Association has been acting jointly with the international regulators and standardization organisms, such

as IAIS, International Accounting Standards Board (IASB) and others, seeking for solutions to improve the regulation and supervision of the insurance industry. CNSeg established partnership with Bradesco and SulAmérica insurance groups, members of this Association, to coordinate and to organize the 38th General Meeting, to be held in Rio de Janeiro, in 2011. International Labor Organization (ILO) The International Labor Organization (ILO), through its Microinsurance Innovation Facility of the International Labor Office, stimulates the creation of projects to develop Microinsurance. CNSeg competed in the selection resulting from the third round of grants and its project “Estou Seguro” has been selected. On December, 2010, CNSeg informed the Brazilian insurance market about the fifth round of the ILO grants, in international scope.

Visits of Foreign Commissions to CNSeg Related to the “Estou Seguro” Project • June: president of Allianz Seguros da Índia,

• •

•

Kamesh Goyal; president of Allianz do Brasil, Max Thiermann; vice president of the Board of Directors of Allianz, Paulo Marraccini, and the officer for Social Projects of Allianz, Rose Oliveira July: Herman Smit, of Center for Financial Regulation & Inclusion (CENFRI) October: Craig Churchill, in charge of Social Finance Programme Employment, of the Microinsurance Innovation Facility sector, from ILO, and its executive José Miguel Solana, to appraise the project and cooperate in the next actions November: Anibal de Oliveira, officer of Ophavela, non-profit microfinance institution in Mozambique, with clients for savings and revolving credit and its advisor Carlos Assumpção Even on November: Douglas Wm. Barne, president of Barnet Companies

and executive officer of the Group of North American Insurance Enterprise (GNAIE); Francisco Javier Garayoa, officer of the Spainish Forum of Socially Responsible Investments and Katherine Munt, the European Insurance Federation representative General Affairs

• Barnert Global – Ed Stepherson, officer for • • • •

•

Governmental Affairs, on January 25th Mapfre Re – Bosco Francoy and Ramon Aymerich, on February 3rd Clientele Ltd. – Noel Prendergast and Gavin Soll (South Africa), on May 18th AXCO – Barry Barnet, on July 15th Lord Mayor of the City of London, Alderman Nick Anstee andits entourage: Paula Walsh, British consul-general in Rio de Janeiro, Alan Charlton, British ambassador in Brazil and other executives, on October 18th IIS – Colleen McKenna Tucker, executive officer, from September 27th to 30th, for planning the 48th Seminar, in 2012, to be held in Rio de Janeiro Patrick Liedtke, Secretary-General of The Geneva Association and Barbara Botterill, coordinator of the Conference, from November 28th to December 1st

Related Links CEA: http://www.cea.eu FIDES: http://www.ﬁdes.org.br IAIS: http://www.iaisweb.org IETS: http://www.iets.org.br IIS: http: //www.iisonline.org ILO: http://www.oitbrasil.org.br MIN Microinsurance Network: http://www.microinsurancenetwork.org/ Munich Re Foundation: http: //www.munichre-foundation.org The Geneva Association: http: //www.genevaassociation.org

Superintendence of Communication and Events Superintendent: Leonardo Laginestra The mission of the Superintendence of Communication is to provide services addressed to qualification and maintenance of the CNSeg image, complying with the strategic and political issues of the Confederation. Its duties are the following: manage the activities and responsibilities of the Managements of Communication, of Events and Publications and of the Library; program mid and long term communication actions; meet and monitor requests from external and internal press advice and from Seguradora Líder DPVAT; carry out technical analyses as regards the sponsorship requests.

Communication Management Manager: Ângela Cunha

Press Advice Provided to CNSeg, FenSeg, FenaSaúde and Seguradora Líder DPVAT. In the last years, the insurance industry also developed as theme of interest to the general public, not only for its duty to protect people and properties, but above all, due to its ability to generate long term savings. The recognition of this by society is reflected in the relationship of CNSeg, FenSeg, FenaSaúde and Seguradora Líder DPVAT with the press that became more intense and frequent, totalizing this year about 200 journalistic requests, generating around 2,600 contacts by email and telephone. On August, FenaSaúde contracted the CDN services to optimize its relationship with media and society in general, aiming a larger clarification by population on the supplementary health segment. On November, CNSeg established partnership with CDN Comunicação Corporativa to reinforce the CNSeg communication with its several

publics, meeting the recommendations on the entity’s strategic plan for the next years. The themes of greatest rebound in the press in 2010 were the following: the two Interactive Conferences on Consumer; the Report on Vehicles Robbery and Theft – 1st quarter, 2010; the “Estou Seguro” Project; and the edition of the 7th Cycle of the Fraud Quantification System – all of them promoted and performed by CNSeg. In the General Insurance segment, the following events were the highlights: the impact of the floods in São Paulo, Rio de Janeiro and Minas Gerais; the introduction of the Police Pacifier Units (UPPs) in the favelas of Rio de Janeiro; the cars fired by traffickers as revenge; the parts replacement in vehicles. In the Supplementary Health segment, the journalists showed great interest for the impact of the new List of Procedures of ANS, the portability of the health plans, the new rules of collective plans, the physicians’ compensation, the new Normative Resolutions of ANS and the Preliminary Investigation Notice (NIF). It has been also relevant the availability of a number of matters on fraud against DPVAT Insurance published in the newspapers Hoje em Dia, from Belo Horizonte, and O Povo, from Fortaleza, with the journalist in charge of the later being awarded the 2010 Allianz Seguros’ prize. And also the institutional campaign of the DPVAT Insurance, broadcasted on television, radio, outdoor, busdoor and magazines.

Communication Relations Opinion poll carried out in the insurance industry about CNSeg media, following mentioned, revealed, amongst other information, that the products have sound

credibility, mainly due to the CNSeg trademark, what creates opportunity to work even more the communication of the trademark.

Revista de Seguros Considered as reference amongst the publications of the segment, as revealed the opinion poll, Revista de Seguros is the official divulgation body of the insurance market, being the oldest market magazine that circulates since the 1920s. In its quarterly issues, the magazine approaches the most current subject matters related to insurance, reinsurance, private pension, supplementary health and capitalization segments, in matters and articles signed by specialized journalists, consultants and experts of the market. Revista de Seguros goes through periodic changes to become more efficient in its mission of corporate edition, being opened to address other economic and cultural subject matters, in order to be closest to an increasing number of readers. In 2010, were distributed over 20 thousand copies of the four editions to a mail of subscribers that includes insurers, international reinsurers, executives of the insurance, private pension and capitalization market, unions of the sector, insurance brokers, libraries of universities, self-employed professionals of the insurance activity, companies and other economics segments, authorities of the Executive, Legislative and Judicial Branches, governmental organisms, cultural institutions, journalists and consultants of several expertises. In the four editions of 2010 were produced around 70 matters, amongst news and articles signed by experts. The major themes addressed were related to the consumer, microinsurance, market performance – in a year also marked by the international economic crisis – and the 2011 perspectives.

“Living Safe in Action” At the end of 2010, the newest communication channel of CNSeg with the market reached its

57th edition complying with its duties to keep informed the associated of CNSeg, FenSeg, FenaPrevi, FenaSaúde and FenaCap, as well as the entities and other professionals of the market, on the major activities and actions developed monthly by all the working areas of the Confederation and the Federations, including the news on reinsurance, private pension, supplementary health and capitalization. With monthly edition, the “Living Safe in Action” is distributed in digital version to a public of more than 1,500 people.

Internet The “Living Safe” portal is active since 2008, hosting the sites of CNSeg and the four sectorial Federations - FenSeg, FenaPrevi, FenaSaúde and FenaCap. In only one website address the user finds a huge range of information on the entities of the Market, with fixed sections and others that count on periodic updating. Totally, around 140 information fields, amongst them, the on-line news where were published about 2,400 matters, and the interviews section, that this year hosted 26 interviews with experts and representatives of the market entities. Other innovation of 2010 was to make available statistical digests on the insurance market performance, carried out by the SISCORPS Corporate Systems. The portal also makes available to the user, data related to organizational charts, board of directors and executive board; “Publications” – such as the Social Balance Sheet of the insurance, open private pension and capitalization activity in Brazi, CNSeg Annual Report and the Guides edited by the entity; “Presidency” – profile of the holder of CNSeg and his professional career; “Central of Services” – which includes 13 databases (such as SIAC, SNG, SESEG and FIPE Table); “Events” – of CNSeg and/or those where its representatives participate, in addition to market events in general; “Market” – updated information on the National System of Insurance, Merco Insurances, FENACOR, National School of Insurance and companies

that compose the segment; “Statistics” – of Insurance, Open Private Pension, Capitalization and Reinsurance. To access the portal just type: www.viverseguro.org.br.

Events and Publications Management

Intranet

Events

Vehicle of interdepartmental communication operating in CNSeg since 2001, Intranet, in addition to universalize and give immediacy to diffusion of the most relevant facts of the administrative and working life of CNSeg, Federations and market, also provided opportunity to divulge matters of social and cultural nature. Simultaneously, Intranet promotes the improvement of the communication between its personnel staff and the management, and contributes for enhancing the quality of interpersonal relationships. During 2010 Intranet divulged about 700 information.

In 2010, there has been a 6% increase in the number of events held in relation to 2009, as per the comparative table below:

Jornal Mural Communication channel that completed five years of activity in 2010, Jornal Mural seeks to provide information divulged in the Intranet to the employees who are strange to the computer, becoming a kind of printed version of the Intranet, summarized and of appropriate language. In 2010 were printed more than 500 newspapers, with the major institutional breaking news and of general interest divulged in the Intranet. Recently, Jornal Mural has sustained graphic change, presenting a new layout with the purpose to be increasingly adjusted to the proposal to offer to the reader short and precise information.

Graphic Designer and Web Services In addition to the maintenance of the “Living Safe” Portal, were provided around 150 services to CNSeg, the four Federations and Seguradora Líder DPVAT.

Manager: Leila Pontes

Year

2010

2009

Events Requested

Events Held

66%

4,721

5,337

11%

Events Cancelled/Postponed Participants

Comparative % 19%

The demands from CNSeg, Federations and Seguradora Líder DPVAT were the following: Entity

Demand

CNSeg

CNSeg/Líder

FenSeg

FenaPrevi

FenaSaúde

FenaCap

Seguradora Líder

Major Events held in 2010 • Cerimony of position transmission of the new executive board • V National Forum of Life Insurance and Private Pension • Insurance Service Meeting – 2010

Events Plan for 2011 • 5th CONSEGURO • 37thGeneral Assembly of the Geneve Association

Publications • Annual Report / Social Balance Sheet of the

Market. Edition: 4,000 copies. Distribution mailing: insurers, reinsurers, related entities, SUSEP, ANS, parliamentarians, trade unions and also distribution in events. In 2010, the distribution process was more effective reaching delivery percentage of 92.5%.

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, has a collection of about 24,200 thousand titles, which are consulted daily by professionals of the insurance industry, researchers and

students. Amongst the works catalogued, books on insurance, related matters, technical manuals, yearbooks, a collection of Brazilian laws, 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. Its collection may be accessed by online catalogue that makes available to the user 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 the following email: biblioteca@cnseg.org.br.

Legal Superintendence Superintendent: Maria da Gloria Faria Actions of matters’ advisory and coordination in the CNSeg/FENASEG and the sectorial Federations have been developed, as much to draw up and analyze agreements as to present opinions and answers to consultations made. The work developed by the Legal Superintendence to monitor the Bills, the new or those in progress, at the National Congress, State Legislatives and Chambers of the Distrito Federal, met all the Federations as well as the Seguradora Líder of the Consortiums for DPVAT Insurance In 2010, it has been noted an increase in demands against the previous year. 1,193 letters, 913 circulars and 832 ordinances have been issued, aiming at obtaining information related to the existence of insurance, claim, denial of agreement, amongst others. The Legal Superintendence drafted and/or analyzed 416 agreements, issued 28 opinions to support the actions taken by the Executive Board of Governmental Affairs, in addition to further 18 to meet de other sectors of CNSeg and Federations.

Coordinated and Monitored Actions Among the actions taken by the Superintendence in 2010, deserve to be highlighted the monitoring, following and coordination of the Public Civil Actions proposed by the Prosecution Office of Goiás against 51 insurance companies on total indemnity, most of them decided favorably to the insurance market. In progress in the Federal Supreme Court is the Direct Action of Unconstitutionality no. 4.293 against the Law (RO) no. 2.026/2009 on the record of irrecoverable vehicles (total loss) in the State Road Traffic Department – DETRAN/RO presented by CNSeg. The two subject matters should continue throughout the year of 2011. The Bill no. 3.555/2004, whose intention is to establish the Insurance Code, remained subject to monitoring throughout the year of 2010, which currently has the Bill no. 8.034/2010 attached to it. It has been drafted edition with opinions by national and international jurists and experts, as well as the public hearings held by

representatives of the insurance market. The edition has been sent to the several congress members and the presidents of the following bodies: IRB, National School of Insurance, FenSeg, FenaPrevi, FenaSaúde and FenaCap, and also the State Trade Unions of the Insurance Companies all over the Country. Working Groups (WGs) were even constituted to address specific issues: National Program of Human Resources (PNRH-3) and Amendment Project of the Code of Civil Procedure. The Legal Superintendence attended the Forum of Consumer Relations co-operating permanently in the analysis, discussion and establishment of strategies in respect of consumer issues that affect the market. Such task counted on contribution and support of advisory developed by the lawyer Angélica Carlini, particularly in the analysis of the Bills that amend the Consumer Defense Code, the draft on private data and review of the Consumer Defense Code. As regards Health Insurance, the Legal Superintendence attended meetings on reimbursement to Single Health System (SUS), regulation of the Articles 30 and 30 of the Law no. 9.656/1998, on retired and fired people, monitored the joint action for settlement of the Court of Appeal of the state of São Paulo and the physicians actions for readjustment of the fees in the states of Espírito Santo, Maranhão and Distrito Federal. The Superintendence also monitored the legal actions, especially on Supplementary Health Rate, readjustment for elders and enrollment in the Medicine and Dentistry Councils. CNSeg and FENACOR remain acting together against the illegal activity in the scope of the insurance.

Legal Report Produced by the Legal Superintendence, the Legal Report is a monthly digital edition with information of general interest to the insurance market. Through its links for the affiliated Federations and DPVAT, the Legal Report makes available sectorial legal information.

Composed by an editorial on common theme to the market, the Report is separated into five specific areas – Capitalization, DPVAT, Private Pension and Life, Supplementary Health and General Insurance – containing case law, consultation solution, news, precedents and normative recently published, of interest to the market and each Federation, besides information on presentation, progress and filing of state and federal Bills. Matters that were in evidence in the Country, such as the Mandatory Contract of Workers Compensation Insurance (88/10 edition), Legal Certainty (90/10 edition), State-Owned Insurance Company (92/10 edition), Consumer Protection (93/10 and 95/10), Data Protection and Secrecy (94/10 edition) and Environmental Risks (96/10 edition) were some of the topics approached in the Legal Report editorials in 2010.

Events In 2010, CNSeg, through the Legal Superintendence, sponsored the “IV Brazilian Congress of Insurance and Pension Law”, organized by AIDA and the Bench School of the Association of Judges of Rio Grande do Sul, on March 19th and 20th, in Porto Alegre, RS; the seminar “Identify and Remove Obstacles to the Development – Economic and Social Aspects”, organized by the Effective Panel of State Bench Schools (COPEDEM), from September 23rd to 26th, in Praia do Forte, Bahia; and the seminar “Suicide and the Insurance”, promoted by the National Academy of Insurance and Pension, held on December 2nd, in São Paulo.

Permanent Committee on Governmental Affairs (CPAG) The Legal Superintendence composes, supports and assists the Permanent Committee on Governmental Affairs, coordinated by the Executive Board of Governmental Affairs. During 2010 were monitored 992 projects, of which 100 are new projects, and have been issued 28 opinions. In the six meetings performed by the Committee during the year have been discussed and analyzed 93 projects.

Committee on Legal Affairs President: Ricardo Bechara Santos Meetings held: 10 No. of members: 107 No. of guests: 87 Total of attendees: 194 Subject matters discussed: 138

Council on Appeals of the National System of Private Insurance (CRSNSP) Holder Member: Maria da Glória Faria Deputy Member: Salvador Cícero Velloso Pinto The Council on Appeals of the National System of Private Insurance (CRSNSP), of the Ministry of Finance, aims at deciding, in last administrative instance, the appeals of SUSEP decisions. In 2010, the holder and deputy

members reported 185 processes and revised 89, from a total of 500 processes decided in the 23 sessions held in 2010.

Administrative Council on Fiscal Appeals (CARF) Deputy Member: Maria da Glória Faria The Administrative Council on Fiscal Appeals (CARF), of the Ministry of Finance, aims at deciding, in last administrative instance, the appeals on enforcement of the law regarding the taxes administered by the Brazilian Federal Revenue Service. The holder of the Legal Superintendence took office as Deputy Member of the CARF on February 2nd, for a 2 years term. In 2010, she attended sessions held on March 8th and 9th and from 22nd to 24th, and on April 25th to 28th, when were decided more than 300 appeals.

Technical Superintendence Superintendent: José Ismar Alves Tôrres The Technical Superintendence coordinated the works of three technical committees of CNSeg: – Management and Finances (CAF), Internal Controls (CCI) e Actuarial (CAT). It also coordinated the Working Group on Intermediation and the Working Group on National Program for Human Rights (PNDH-3).

Superintendence drew up a project, contracted with the Central of Services and Protection to Insurance of CNSeg, for creating and maintaining such database. In the first stage of the project, already concluded, it has been created a database with information required to update the “Living Safe” portal.

As consequence of its participation in the technical committees of CNSeg, the Technical and Operational Superintendence attended the Working Groups and Committees constituted within the scope of SUSEP to discuss subject matters addressed internally in CNSeg. It may be highlighted, therefore, the Special Permanent Committee, the Accounting Committee, the Technical and Actuarial Chamber, and the Technical Group on Credit Risk.

The second stage of the project, in progress, is the research with the sectorial Federations on the specific information of every segment that shall be made available in such database. The project also includes the training of CNSeg and Federations practitioners in using the tools required to operate the database and to generate reports. Logins to access the system may be obtained by associated companies, in order that they may develop their analyses and reports based on the data made available.

In order to meet the CNSeg and sectorial Federations need, they have a database consolidated, with information on the Brazilian insurance market and that may be consulted and used for the common interest to the market, the Technical and Operational

The Technical and Operational Superintendence also made available the publication of two periodic digests in the “Living Safe” portal. The first, named “Resultado do Mercado de Seguros”, monthly

updated and with a short view under several indicators and aspects on the insurance, open private pension and capitalization segments, in addition to compare the values realized in the periods considered with the projections for the end of the year. The second, “Resultado do Mercado de Saúde Suplementar”, of quarterly periodicity, highlights some information of the health market. From 2010, it has been made available a projections spreadsheet for the current year, as well as for the next years (view of more three years ahead), with annual projections of the Market by the following segments: General Insurance, Health, Personal (Life, Personal Accident and Pension) and Capitalization. The differential of these projections in relation to the previous years is that they are dynamics, with periodic updating, so that any relevant fact occurred in the economics or in the insurance market is captured and considered in the next updating. Until then, the projections were statistic and became outdated fast, as occurred in the international financial crisis initiated in the second quarter of 2008. It is worth highlighting the attendance of the holder of the Technical and Operational Superintendence in the first meeting of the Permanent Special Committee, constituted in 2010 upon requesting sent to SUSEP on November, 2009, through PRESI Ordinance no.163/2009. During this meeting were discussed some of the topics contained in the agenda of prioritized subject matters of the insurance market, also contained in the already mentioned ordinance, such as, amendments to the Circular 380, IFRS adequacy and periodicity for sending the digital entries (SPED). Throughout 2010, the Technical and Operational Superintendence conducted the discussions related to the SUSEP surveillance rate. By the Provisional Presidential Decree no. 472/2009, the Government changed the surveillance rate charged from the insurance, open private pension and capitalization companies, and also became to charge such rate from the local and admitted reinsurance companies.

The readjustment in the value charged achieved the average of 280%, overtaxing excessively the small size companies. The executive board of CNSeg constituted a Working Group, coordinated by the holder of the Technical and Operational Superintendence and composed by the executive offices of FenSeg, FenaPrevi and FenaCap and by representatives of the WG on Small and Mid Size Insurance Companies. It has been developed a series of studies and simulations that provided a more precise view on the characteristics and impacts on the change of the surveillance rate in the several segments of the market. Based on the work performed it was possible to negotiate with the Government the reduction of the adjustment percentage over the surveillance rate charged from the small size companies that operate in the life, pension and capitalization branches, enacted by the Law 12.249/2010, in addition to constitute a WG, with participation of representatives of the insurance market and SUSEP, in charge of draft a proposal for reviewing the base for calculating the surveillance rate of the insurance and reinsurance markets.

Committees Actuarial Committee (CAT) President: Almir Martins Ribeiro (Marítima Seguros) No. of members: 93 (43 holders, 43 deputies e 7 representatives of CNSeg and sectorial Federations) Meetings held: 10, with average of 27 attendees Major Subject Matters New Branches Code (SUSEP Circular 395, dated December 3rd, 2009) The source of this circular was the Public Hearing 2/2009, dated January 8th, 2009, that establishes the insurance branches code and disposes on the coverages classification contained in the insurance plans, with

the purpose of accounting. The SUSEP Circular 395 divulged these new rules and the accounting needed to be adjusted to consider the changes from January 1st, 2011. Throughout the year of 2010 happened intense negotiations with SUSEP, consolidated in CNSeg actions and in meetings held in SUSEP, from the constitution of working subgroups (personal and general insurance), aiming at seeking to clarify the questions on the understanding of such normative, due to the hard impacts caused in the operational and managerial systems of the companies. Additional Capital of Credit Risk (CNSP Resolution 228, dated December 6th, 2010) A technical chamber in SUSEP, composed by representatives of the insurance market, was formed to discuss a report on credit risk, dated March, 2010, that presented the initial way that autarchy intended to regulate the matter. Countless negotiations happened with SUSEP during 2010, always aiming at understanding and improving the normative that would be issued in respect of the theme, as well trying to measure its impacts in the insurance market. Despite of the importance and nature of such matter, SUSEP decided not to place in public hearing the draft that would regulate the theme. Public Hearing 4/10 (SUSEP Circular 410, dated December 22nd, 2010) – Liabilities Adequacy Test (LAT) This theme became to be discussed in 2009, when a technical chamber in SUSEP was constituted, with representatives of the insurance market, when several questions have been made on some definitions contained in the technical report presented by the entity on May, 2009. Since then, there have been countless negotiations with SUSEP, notably in relation to the branches grouping and the discount rate to be used, as well on the need of study on previous appraisal as regards their impacts, before disclosure the standard. Course on Actuary Throughout 2010 have been performed studies in order to establish, in partnership with the National School of Insurance, an

“Course on Actuary”, to be made available for the practitioners who act in the insurance market, taking into account the lack of professionalization courses offered in this area.

Committee on Internal Controls (CCI) President: Assízio Aparecido de Oliveira (Grupo Mapfre) No. of members: 118 (61 holders, 50 deputies e 7 representatives of CNSeg and sectorial Federations) Meetings held: 11, with average of 32 attendees Major Subject Matters Circular 380 and Themes Related to Money Laundering The CCI participated actively in the analysis of the SUSEP Circular 380, comparing this normative with the international practice against anti-laundering money in the insurance market. The Committee issued a report on the conclusions of such work, so that CNSeg may place the theme in public hearing, where will be proposed to SUSEP several amendments to the standard in force, resulting from the understanding of several markets of the standards of the Financial Action Group (GAFI) SIPLAV Project The System for Identifying Politically Exposed People (PEPs) and Anti-Money Laundering (SIPLAV) has been developed by the Central of Services and Protection to Insurance of CNSeg, to comply with the Circular 380 requirements, from the identified need to seek a standardization of the information provided to SUSEP, as well as to seek a costs reduction for the companies that compose the insurance market. In December, have already occurred the first adhesions to the project. Research on Internal Controls of the Insurance Companies The research performed in 2006 was updated, so that it may be possible to have a diagnosis of how the insurance market is developing in the theme of internal controls.

This new research was already consolidated and will be divulged to the market in 2011. Course on Internal Controls An unedited extension course on Internal Controls, with classes to be given in the first quarter of 2011, has been already developed in Rio de Janeiro and São Paulo, in partnership with the National School of Insurance. Lectures Cycle Every meeting held by the Committee on Internal Controls, one of its members presented a successful case or reported how your company is structured to act with the internal controls. Seminar on Internal Controls Held on August 31st, 2010, at the Tívoli Mofarrej Hotel, in São Paulo, with attendance of 176 people, amongst them the president of FenaPrevi and Grupo Bradesco Seguros, Marco Antonio Rossi, and the president of the Brazilian Social Security Institute (INSS), Valdir Moysés Simões, who talked about their experiences and on the importance of the internal controls in their corresponding companies.

Committee on Management and Finances (CAF) President: Haydewaldo Roberto Chamberlain da Costa (Grupo Bradesco Seguros) No. of Members: 102 (52 holders, 43 deputies e 7 representatives of CNSeg and sectorial Federations) Meetings held: 11, with average of 24 attendees Major Subject Matters Reports on Meetings held in SUSEP The meetings of the Committee on Management and Finances usually occur at the same day of the meeting of the Accounting Committee of SUSEP, being then reported the matters discussed. IFRS and Financial Statements in 2010 The impacts in the companies are relevant, reason for which it has been requested to

SUSEP a better alignment with Brazilian Central Bank, as regards the time for the IFRS implementation and its scpe. Public Digital Bookkeeping System (SPED) SUSEP intended to create new accessory responsibilities for the insurance companies, such as the quarterly delivery of the Digital Bookkeeping System (ECD), in addition to full access to ECD and without opening fiscal procedure or equivalent. The market showed contrary to the changes planned, what resulted in a movement regarding to this matter. The subject matter was solved with the issue of the SUSEP Circular 406, dated June 28th, 2010, that revoked the SUSEP Circular 397, dated December 14th, 2009, meeting the market demand. General Chart of Accounts It has been identified the need to elaborate a new general chart of accounts because of the countless adjustments made recently (reinsurance opening, preparatory changes resulting from IFRS, new branches code, etc.). PIS/COFINS and ISS on Reinsurance commission The incidence of PIS/COFINS and ISS on reinsurance commission is a theme that has given rise to a series of discussions, since some insurance companies understand that the reinsurance commission is not in the list of the revenues over which such taxes are applied. There are, however, audit companies that are questioning such understanding. Adjustment to e-Invoicing Discussion on the adjustment to the procedures such as, as regards the issue of invoice to sell salvages or the commission paid to brokers in the e-invoicing environment. Public Hearing 4/10 (SUSEP Circular 410/2010) – Liabilities Adequacy Test This matter was in the permanent agenda of the Committee on Management and Finances, since the first moment that SUSEP placed the theme in discussion, participating of working groups to deep the matter.

Public Hearing 5/10 – Adjusted Equity The CNSP Resolution 222, dated December 6th, 2010, on adjusted equity, has been discussed when it was in public hearing.

Subcommittee on Fiscal Affairs (SCAF) Coordinator: Antonio Carlos Nogueira Pedrosa (Sul América Companhia de Seguros) No. of members: 93 (43 holders, 41 deputies e 9 representatives of CNSeg and sectorial Federations) Meetings held: 2

WG on Small and Mid Size Insurance Companies (PME) Coordinator: Pedro Pereira de Freitas (American Life Companhia de Seguros) No. of members: 30 (25 representatives of insurance companies and 5 of CNSeg) Meetings held: 11, with average of 13 attendees Major Subject Matters Principle of the Proportionality The core question of this theme would be to address unequally the unequals. This matter

was addressed to SUSEP, via Permanent Special Committee, that permitted to carry out study to be presented to the Autarchy. The WG evaluated the proposals sent by five consultancies and the company selected will develop the study from 2011. Surveillance Rate This matter was largely discussed, due to its relevance for small and mid size insurance companies. One of the members of the WG of CNSeg – Francisco Alves (COMPREV) – will attend the WG to debate the question with SUSEP in 2011. Joint Solutions to Reduce Costs This theme has been recurring in discussions of this WG, since its constitution. For example, bank charge and outsourcing (SulAmérica experience with IBM). Further Subject Matters The WG on Small and Mid Size Insurance Companies analyzed, among other subject matters, IFRS and statement of accounts in 2010, SPED, Credit Risk, Liabilities Adequacy Test and Adjusted Equity.

Central of Services and Protection to Insurance Superintendent General: Julio Avellar Superintendent: Renato Pita After changing in the management of CNSeg, there were also changes in the structure of the Central of Services and the Executive Board of Protection to Insurance. The two Executive Boards have been consolidated as a unique body, named Central of Services and Protection to Insurance. The “New CESER” has as superintendent general, Julio Avellar, and a superintendent, Renato Pita. According to Executive Board of CNSeg, have been made the following changes: Extinguishment of the Council on Management (of the Central) and on Protection to Insurance (of the former DISEG) , and constitution of two new Councils – a Council on Management for the Central of Services and Protection to Insurance, named CODAM, already invested, whose composition is presented below, and a Council on Development – named CONDE, to be invested in 2011. CODAM composition President Jorge Hilário Gouvêa Vieira

CNSeg

branch of CNSeg and Federations (FenSeg, FenaSaúde, FenaPrevi e FenaCap), addressed to increase the efficacy and efficiency of the insurance market and improve the quality of services provided

• Mission: Provide, with priority, services of

data access and exchange and implement services of interest to CNSeg

Carrying out the following changes in the Organizational Structure of the Central of Services and Protection to Insurance:

• Transfer to the National School of Insurance the duties of Education and Training related to the Fight Against Fraud

• Transfer to the Central of Services the

Management of IT Infrastructure that was in charge of the Superintendence of Management and Finances

• The commercial duty is no more specific

duty of a management and will be duty of each project manager.

The managerial line of the Central was composed as below:

Members Casimiro Gomez

FenSeg

Fernando Mota

CNSeg

Francisco Alves de Souza

FenaPrevi

Luiz Tavares Pereira Filho

CNSeg

Márcio Coriolano

FenaSaúde

Natanael de Castro

FenaCap

Oswaldo Mário

CNSeg

Establishing new View and Mission for the Central of Services and Protection to Insurance:

• View: The Central of Services and

Protection to Insurance is an operational

Management of

1st dimension

2nd dimension

Projects I

Re and Capitalization

Public Safety

Projects II

Health and Personal

Providers

Projects III

Special Projects

Public DBs

Projects IV

Banks and Financial Institutions

Traffic System

Protection to Insurance IT Projects IT Infrastructure

Prevention

Fight

IT of Projects

Managerial Information

Hardware and Operation

Basic Software

Definition of new Business-Related Focus and View for the Central • Larger dedication to the services provided to the affiliated that developed in lower rhythm than that expected, with a very limited adhesion to the services made available

• Result of international benchmarking,

including Germany, Argentina, Spain, France, Italy and England, it revealed as the opportunity to seek a larger efficacy, repeating in Brazil the American ISO trajectory (that wishes to execute Convention with CNSeg), also in compliance with the new business practices of GPSA (French) and GDV (German). The purpose is to structure the Central of Services as business-related way, in order that it may answer with larger effectiveness the insurance market demands.

The Central Activities in 2010 The Central of Services manages 27 own and of third parties databases, by means of conventions and agreements with public and private entities, whose content is made available to the insurance market and accredited entities directly and/or by service providers. The insurance companies use the information for risks underwriting, pricing, loss adjustment and prevention and fight against fraud. The information and services made available add and improve the goods, services and processes of the clients, promoting efficacy, efficiency and providing a virtuous cycle to the final consumer, the society.

Services Available Database of Insurance Brokers (BDCOR) BDCOR contains enrollment information and copies of documents as regards all the insurance brokers, enabling individual and in group consultations, as well enrollment of the list of insurance brokers the insurance company works with, so that it is noticed always an enrollment change is performed.

Database of Vehicles Insured that Sustained Losses of Unrecoverable Full Indemnity (BDSII) BDSII, of public access, enables the consultation in order to know if a specific license or chassis number refers to a vehicle that has been subjected to full indemnity considered

unrecoverable. It is fed from the National Record of Losses – Motor (RNS Motor)

Central of Bonus Operating since July 2011, the Central of Bonus enables to verify automatically the bonus class of clients amongst the insurance companies.

Tickets Paid – DPVAT The access to tickets paid databank of the DPVAT Insurance enables to obtain information as regards the tickets paid, identification of the vehicle (chassis and license) and the owner (name and CPF/CNPJ).

Frontiers Project / SINIVEM System that enables to identify vehicles that pass by eight frontier points of the Country and by the Presidente Dutra Highway, that also counts on a station, indicating for the Federal Highway Police, in real time, if the vehicle is robbed or should be monitored. It keeps data of vehicles that passed by the station, enabling subsequent appraisals.

National Record of Drivers Licensed (RENACH) DENATRAN database that enables to check the status of the drivers license.

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

National Record of Losses (RNS)

National System of Deaths (SINOB)

The National Record of Losses is currently composed by the following database: • Motor • Personal (life, personal accident and pension) • Property • Cargo (being developed) • Credit and Guarantees (being developed) • Rural (being developed)

The National System of Deaths (SINOB), under management of the DATAPREV, aims at recording, processing and centralizing the national database of deaths.

RNS Motor counts on commitment of 98% of the insurance Companies operating in the Motor branch.

Central Service of Protection to Credit (SCPC) The convention executed with the Commercial Association of São Paulo (ASCP) enables the insurance companies consult their several database, which provide enrollment and credit information. System of Consultation to Motor Policies for Recovering the Loss (SCA Motor - Recovery) System that enables the registered insurance company to identify the other insurance company that is in charge of the third party policy, for the purpose to recover losses.

SCA Motor – Legal Patio It enables the access to policies database of Motor assureds, by the operator company of the “Legal Patio” in Rio de Janeiro, Duque de Caxias and Búzios, “Safety Patio” in Minas Gerais and of others that may be established, for the purpose to provide information to such insurance company of the recovery of insured vehicle.

Data Confirmation System (SICON) – CPF/CNPJ It enables the access to the database of the Federal Revenue Office in order to check the enrollment status and other information as regards natural persons and legal entities.

National System of Liens (SNG) The system was initiated in 1998, after FENASEG has entered into agreements with several representative association of the financial segment: 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 is used by its affiliates and also by other companies enrolled in DETRANS to perform the liens. SNG has established as a high safety and effectiveness system due to its ability to prevent frauds in the records of liens related to the contracts of Fiduciary Sale, Leasing, Domain Reserve and Vehicle on Lien.

Vehicles Financing Contracts Record System (SIRCOF) SIRCOF is a system that allows data recording of vehicles financing contracts (fiduciary sale, leasing, domain reserve and vehicles on lien) by financial institutions, digital and simultaneously to the inclusion of lien in DETRAN, when the vehicle is licensed.

Integrated Base of Vehicles (BIV) The creation of a consolidated database of vehicles enables the generation of studies and management reports, as well as provides larger flexibility to the insurance companies when accessing the several databases.

Systems To Be Introduced Insurance Market Statistics System (DATASEG) System that consolidates information from several sources, mainly SUSEP and ANS, so that to produce reports and provide monitoring analyses of the indicators from the insurance market, capitalization, health and private pension companies.

Management Reinsurance Offers System (Gestor Re) System that aims at controlling the distribution of preferred reinsurance offers to local reinsurance companies, enabling the identification of every offer sent.

SIDE controls the transfer of technical provisions amongst private pension insurance companies in cases of change requested by the participant of the plan (portability).

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

Weather Forecast Monitoring System (INFOTEMPO)

Anti-Money Laundering System (SISPLAV)

Provision of newsletters by CLIMATEMPO, with information related to weather and climate forecasts.

It aims at providing anti-money laundering information, in compliance with the SUSEP Circular no. 380 and the anti-money laundering international agreement. By means of two information providers, SIPLAV enables the access to information on politically exposed people or those under criminal surveillance and to information on income and revenue supposed from natural persons and legal entities.

Telemarketing Calls Block System (SIBLOQ)

Projects In Progress Enrollment of Support Service Providers This system will make available information on service providers to the insurance market.

Automatic Lien Settlement and Release of Fully Indemnified Vehicles System (SILAG) SILAG will enable the information exchange between insurance companies and financial institutions, for the knowledge of the balance due by the assureds.

Electronic Document Exchanging System (SIDE)

SIBLOQ will collect information of telephone numbers whose owners have requested the block to receive telemarketing calls.

Database â&#x20AC;&#x201C; Policies and Proposals Primarily are expected the development for the following branches, in addition to Motor, already introduced: Personal, Credit and Guarantee.

Technical Committee The Central of Services and Protection to Insurance coordinates the works of the Committee on Processes and Information Technology (CPTI) that addresses the subject matters related to the IT infrastructures, adoption of standards by the insurance market and the compliance with the SUSEP regulations.

Committee on Processes and Information Technology (CPTI)

• Censo 2011 – Standard definition to perform

President: Roberto C. P. Almeida (Porto Seguro)

• National School of Insurance Course –

Meetings held: 12 No. of members: 53 (25 holders, 21 deputies, 6 representatives of CNSeg and 1 representative of FenSeg) Amongst the activities performed in 2010, it may be highlighted: Dentre as atividades realizadas em 2010, destacam-se:

• The Committee re-structuration after taking office the new presidency, definition of the CPTI Mission and View and sound performance in the mission for convening new members and new companies of the insurance market for the Committee

• Circular 395 – Disclosure and monitoring

of the implementation of the Circular 395 among the insurance companies, questionnaire on the difficulties and sharing of IT and Accounting best practices for applying in the insurance market companies.

• Public Hearings – Analysis on systemic and

of processes impact, related to the Public Hearings, in order to define the projection of development effort and sharing amongst the ITs of the insurance market companies.

• Vertical of Standards – Creation of

standardized devices, metrics and controls as base in the CMMi/MPSBr good practices. Beginning of the works aiming at a possible certification of the partners with factory of software and development to a register of prices, with the possibility to commoditize the services provided to the insurance companies. This includes all the services, such as telemarketing, file change and services providing.

the 2011 censo of the technology sector of the insurance companies of the market.

Creation and performance of the pilot course of Specialization and Management of Processes and Information Systems in Companies of the Insurance Market, based on processes plan and architecture created by the Committee on IT of CNSeg. After drafting the amendment and application of the pilot course in the National School of Insurance, the new course may be repeated in companies interested in, during the next years.

• 2010 IT Meeting– The traditional IT Meeting

Seminar developed in 2010 to an Insurance Service Meeting, extending its scope to include other service providers, not solely of Information Technology. The event, whose general theme was “Conscious Consumer – The Future in the Services Providing”, counted on total of 310 attendees, being 181 representatives of the insurance market (37 of the top management, among presidents, vice presidents, CEOs and officers of companies; 52 executives, among superintendents, presidents of Councils, presidents of Committees and Technical Committees, advisors and experts); 87 experts (managers, analysts, advisors, coordinators, ombudsmen, supervisors and assistants); 5 journalists and 128 representatives of the 30 sponsor companies: Accenture, Audatex, BSI Tecnologia, Compuletra, CPM Braxis, Dekra, Delphos, eBaoTech, Ebix, Everis, Equifax, Executivos Financeiros, GRV Solutions, IBM, Indra, Infor, ITG, Provider IT, Politec, SAP, Quality Software. SCPC, Stefanini, Tivit, Telvent Global Services, Vayon and Vixia.

• 2010 EInsurance Award – Prize addressed

to systemic and of processes solutions, aiming at divulging the insurance industry as generator of efficient solutions.

Services in the Fraud Prevention and Fight Denouncement Hot-Line against Insurance Fraud Under covenants with the State Denouncement Hot-Lines operators, 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 service guarantees the citizen anonymity and provides a register number for monitoring the process of denouncement. When assisting the police authorities to elucidate the frauds committed, this service contributes to the insurance market strength and protects 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. In the states of São Paulo, Pernambuco, Rio Grande do Sul and Espírito Santo the service works through national call by the number 181.

Relationship with the Government, Technical Organizations and Representative Entities CNSeg, through partnerships with governmental agencies, technical organizations and representative entities, collaborates with the Government, by request and demand, in the cases it is called to provide information in order to clarify the cases of fraud and further felonies.

Information Intelligence Systems CNSeg is in charge of develop and manage, 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.

Fraud Denouncement In 2010 it was developed an institutional policy with the purpose to foment the offer of news on frauds committed, in compliance with the SUSEP Circular no. 344/2007.

Fraud Quantification System (SQF) Through the SQF, fed annually since 2004 by the insurance companies in all the branches of insurance, excepting Health and Open

Private Pension, are generated the indicators of fraud against insurance, compounding thereby, unpublished historical series of such occurrences. The consolidated results of the 7th Cycle were divulged during Meetings held in Rio and São Paulo, with attendance of FENACOR, SUSEP and National School of Insurance, when were presented successful cases e discussed actions to improve the prevention and fight against fraud.

The greatest challenge for the 8th Cycle, in 2011, is to integrate the Health data to the SQF. The consolidated results of the 7th Cycle indicate that in 2009 there was R$2,10 billion of claims in questionable losses, the correspondent to 11.1% of the total value of losses. The value of the frauds that could be confirmed amounted to R$230 million, representing 10.7% of the value of questionable losses. The commitment of the insurance companies to this edition of the survey achieved 91% in participation and 79% in considered answers.

Fraud Indicators – All the Branches* - 2009

Values in R$

Loss

11.1%

1.5%

2,10 bi 18,9 bi

Questionable Loss Loss

Confirmed Fraud

1.2% ➡➡

➡

Investigated Fraud

➡

Questionable Fraud

Loss with Confirmed Fraud Loss

0,28 bi 18,9 bi

Questionable Loss

0,23 bi 18,9 bi

Loss with Confirmed Fraud Loss

Investigated Loss Confirmed Fraud

13.3%

10.7%

16.8%

13.5%

0,28 bi 2,10 bi

➡

Loss with Investigated Fraud 0,23 bi Ivestigated Loss 2,10 bi

Loss with Confirmed Fraud Ivestigated Loss

0,28 bi 1,67 bi

➡

Investigated Fraud

➡

Confirmed Fraud

Loss with Confirmed Fraud Ivestigated Loss

0,23 bi 1,67 bi

➡

Investigated Fraud

Loss with Confirmed Fraud Ivestigated Loss

Earned Premium

6.7%

0.9%

➡

Investigated Fraud

Confirmed Fraud

0.7% ➡➡

➡

2,10 bi 31,2 bi

Investigated Fraud

Questionable Loss Earned Premium

0,28 bi 31,2 bi

Loss with Investigated Fraud Earned Premium

0,23 bi 31,2 bi

Loss with Confirmed Fraud Earned Premium

➡

* Excepting Health and Open Private Pension. Variation in relation to 2008: larger, smaller, ➡➡ the same.

The full results of this 7th 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 a Whole Report, with printing edition of 9,200 and 3,000 copies, respectively, the latest being bilingual, in Portuguese and English. Such publications are also available at the CNSeg website.

Public Access to Web Information The access to the information on the actions of prevention to insurance fraud is also available at the portal www.viverseguro.org.br, in the area reserved to CNSeg, in the menu Serviços, under the title Proteção ao Seguro. Among the options offered are the numbers of fraud

quantification, the content of awareness lecture on fraud theme, the conventions of the Denouncement Hot-Line against Insurance Fraud, among other information. This content is also addressed to the consumer and the society in general, in order to inform the population about the consequences such illicit acts may cause.

Lectures, Courses and Seminars The partnership with National School of Insurance provides trainings on Prevention of Insurance Fraud, of compulsory attendance for students of the Insurance Broker License Course, as part of the curriculum.

Unlawful Activity CNSeg was aware of countless denouncements sent to SUSEP related to the insurance activity by entities non authorized to operate within this segment, mainly associations and cooperatives constituted with such specific purpose in their social objectives. In 2010, a consultant has been contracted to deep the analysis on the performance of entities that commercialize “Protection Programs” similar to insurance and the service itself, under the commercial, legal and operational aspects, aiming at measuring the impacts on the insurance market and redefining the institutional acting.

The increasing practice of such activity forced SUSEP to constitute, by the Ordinance no. 2.986, dated July 14th, 2008, a Permanent Special Committee “to study and propose measures in order to fight against the irregular insurance activity by entities non authorized to operate as insurance companies, so that to make agile the checking of denouncements and repression actions, taking the necessary complementary arrangements in the scope of the Federal Policy, State and Federal Prosecution Office and other competent authorities.” The supposed criminal implication of such behavior motivated the formalization of denouncements to the Federal Prosecution Office by SUSEP and other interested entities, so that only in Minas Gerais have been instituted 11 investigative procedures by the Federal Police, kept by the Fragoso Advogados Office, according to CNSeg request. In addition to that, supporting the legal opinion of the lawyer Condorcet Rezende, contracted by CNSeg, FenSeg and FENACOR, SUSEP informed the Brazilian Federal Revenue Service the supposed illegality of this activity, aiming at verifying the transgressions to the tax order, with the adoption of the competent measures. In the states of SP, AL and MG, the Prosecution Office proposed public-interest civil actions against some of such entities, backed by supposed injury to the consumer rights.

Chapter IV

FenSeg The General Insurance Segment 91

The Good Expectations of the General Insurance The general insurance segment showed significant growth in 2010 when the volume of premiums income amounted to R$37.7 billion, 14.5% above the 2009 income. As the mainspring of the sector remained the motor insurance with volume of premiums of R$20.1 billion, what represented a 15.3% increase against the previous year and a 53.3% share in total premiums of the sector. It was also relevant the growth of the property insurance, whose premiums amounted to R$7.7 billion, a 20.1% growth in relation to 2009. The major highlight in the property insurance was the extended guarantee that grew 90.0% in 2010, with premiums amounting to R$2.1 billion against R$1.3 billion in the previous year. The 2011 projections are optimists with intensification of the investments intended for the World Cup in 2014 and the Olympics Games in 2016, but the growth rhythm of the written premiums of the motor portfolio tends to be lower than in 2010, due to measures taken to limit the credit and to probable increase of the interest rates. In the further portfolios, it is worth highlighting the Rural Insurance portfolio, whose development depends on a larger agility by the government to free up funds from the subsidy to the rural insurance premium and from the Catastrophe Fund regulation, instrument that will stimulate a large number of insurance and reinsurance companies to take part in such specific market; the Civil Liability Insurances portfolio, with the increasing demand for the professional civil liability and the D&O (Directors & Officers); and the Home/Housing Insurance portfolio that due to the reactivation of the real estate financings has been presenting annual growth above 20% in the last years. Relevant fact in 2010 was the launching of the Good Practices Guide for the Motor Insurance occurred on September 10th, 2010, in S達o Paulo, during the II Interactive Conference on Insurance Consumer Protection.

Jayme Brasil Garfinkel President of FenSeg

FenSeg in 2010 The National Federation of General Insurance – FenSeg, national representation entity of companies operating in the damage insurance segment, in its third year of acting, prioritized the following topics: Motor Insurance, with the creation of the Good Practices Guide, implementation of operations within an environment of Open Reinsurance, Home/

Housing Insurance, Rural Insurance and updating of the standards for Cargo and Civil Liability Insurance. With principal business office in Rio de Janeiro, FenSeg counted on the following Executive Board in 2010:

Executive Board of FenSeg President Jayme Brasil Garfinkel

Porto Seguro Cia. de Seguros Gerais

Vice presidents Pedro Purm Junior

Zurich Brasil Seguros S.A.

Thomaz Luiz Cabral de Menezes

Sul América Companhia Nacional de Seguros

Officers Antonio Eduardo Trindade

Itaú Seguros S.A.

Arlindo da Conceição Simões Filho

Allianz Seguros S.A.

Francisco Caiuby Vidigal Filho

Marítima Seguros S.A.

João Francisco Silveira Borges da Costa

HDI Seguros S.A.

Júlio Cezar Alves de Oliveira

Brasilveículos Companhia de Seguros

Luis Emilio Maurette

Liberty Seguros S.A.

Luiz Felipe Smith de Vasconcellos

Tokio Marine Seguradora S.A.

Mauro César Batista

Mapfre Vera Cruz Seguradora S.A.

Ricardo Saad Affonso

Bradesco Auto/RE Companhia de Seguros

Sidney Gonçalves Munhoz

Chubb do Brasil Cia. de Seguros

Executive Officer Neival Rodrigues Freitas

Associates to FenSeg ACE Seguradora S.A.

Generali Brasil Seguros S.A.

Alfa Seguradora S.A.

HDI Seguros S.A.

Allianz Seguros S.A.

HSBC Seguros (Brasil) S.A.

Assurant Seguradora S.A.

Indiana Seguros S.A.

Atlântica Companhia de Seguros

Itaú Seguros de Auto e Residência S.A.

Austral Seguradora S.A.

Itaú Seguros S.A.

Azul Companhia de Seguros Gerais

Itaú XL Seguros Corporativos S.A.

Banestes Seguros S.A.

J. Malucelli Seguradora S.A.

BCS Seguros S.A.

Liberty Seguros S.A.

Berkley International do Brasil Seguros S.A.

Mapfre Vera Cruz Seguradora S.A.

Bradesco Auto/RE Companhia de Seguros

Mares-Mapfre Riscos Especiais Seguradora S.A.

Bradesco Seguros S.A.

Marítima Seguros S.A.

Brasilveículos Companhia de Seguros

Mitsui Sumitomo Seguros S.A.

BVA Seguros S.A.

Nobre Seguradora do Brasil S.A.

Caixa Seguradora S.A.

Panamericana de Seguros S.A.

Cardif do Brasil Seguros e Garantias S.A.

Paraná Companhia de Seguros

Cescebrasil Seguros de Garantias e Crédito S.A.

Porto Seguro Cia. de Seguros Gerais

Chartis Seguros Brasil S.A.

Pottencial Seguradora S.A.

Chubb do Brasil Cia. de Seguros

QBE Brasil Seguros S.A.

Coface do Brasil Seguros de Crédito Interno S.A.

Royal & Sunalliance Seguros (Brasil) S.A.

Companhia de Seguros Aliança da Bahia

Rural Seguradora S.A.

Companhia de Seguros Aliança do Brasil

Seguradora Brasileira de Crédito à Exportação S.A.

Companhia de Seguros Gralha Azul

Seguradora Líder dos Consórcios do Seguro DPVAT S.A.

Companhia de Seguros Previdência do Sul

Sul América Companhia de Seguros Gerais

Companhia Excelsior de Seguros

Sul América Companhia Nacional de Seguros

Companhia Mutual de Seguros

Tokio Marine Brasil Seguradora S.A.

Conapp - Companhia Nacional de Seguros

Tokio Marine Seguradora S.A.

Confiança Companhia de Seguros

UBF Seguros S.A.

Cosesp - Companhia de Seguros do Estado de São Paulo

Usebens Seguros S.A.

Crédito Y Caución Seguradora de Crédito e Garantias S.A.

Virginia Surety Companhia de Seguros do Brasil

Euler Hermes Seguros de Crédito S.A.

Yasuda Seguros S.A.

Fairfax Brasil Seguros Corporativos S.A.

Zurich Brasil Seguros S.A.

Fator Seguradora S.A.

Zurich Minas Brasil Seguros S.A.

Federal de Seguros S.A.

General Insurance Segment – 2009/2010 In 2010, the income of the general insurance segment amounted to R$37.7 billion, representing an increase of 14.5% if compared to the 2009 income, R$32.9 billion. In the year, the income of the segment represented 33.9% of all the Brazilian insurance market, compared to a 34.7% share in the total income of 2009. In volume, the branches with larger representativeness in 2010 were Motor, with

53.3% of the total of the segment and income of R$20.1 billion; Property, with 20.7% of the total and income of R$7.8 billion, and DPVAT, with 7.7% of the total and income of R$2.9 billion. The branches that stood out in 2010, as regards growth, were: Home/Housing (21.9%), Property (20.1%) and Liabilities (18.5%).

Income – Insurance Premiums

Values in R$ thousand

2009

2010

% Variation 2010/2009

17,398,186

20,052,338

15.26%

Property

6,486,165

7,788,497

20.08%

DPVAT

2,683,869

2,896,385

7.92%

Cargo (Goods in Transit)

Segments / Groups Motor

1,686,007

1,969,231

16.80%

Credit

426,684

426,153

-0.12%

Home/Housing

906,874

1,105,235

21.87%

Liabilities

632,850

750,099

18.53%

Hull

548,336

571,932

4.30%

1,023,597

1,022,846

-0.07%

Financial Risks

867,937

898,499

3.52%

Special Risks

235,056

172,703

-26.53%

32,895,562

37,653,919

14.47%

Rural

Total for General Insurance

Source: SUSEP - SES

Thus, between 2009 and 2010 the retained losses increased 8.7% and the earned premiums,13.6%. Accumulated Data of the General Insurance Segment

Values in R$ thousand

2009

2010

% Variation 2010/2009 pp

Gross Earned Premiums

32,895,562

37,653,919

14.47%

Earned Premiums

27,238,868

30,947,579

13.62%

Net Losses

16,399,620

17,822,896

8.68%

5,604,727

6,564,389

17.12%

Accounts

Acquisition Costs

Gross Earned Premiums = insurance premium – ceded coinsurance + accepted coinsurance. Earned Premiums = net premium – Unearned Premiums Provisions (UPP) variation. Net Losses = insurance loss – ceded coinsurance loss + accepted coinsurance loss + consortium and funds – ceded reinsurance loss + restitution loss – salvage and recovered + IBNR variation.

The loss ratio in the general insurance segment in 2010 was 57.6%, registering a drop if compared to the loss ratio of the previous year. Loss Ratio â&#x20AC;&#x201C; General Insurance Segments/Groups

2009

2010

% Variation 2010/2009 pp

Motor

66.27%

63.92%

-2.35

Property

33.13%

30.31%

-2.82

DPVAT

86.90%

87.62%

0.72

Cargo (Goods in Transit)

61.85%

56.65%

-5.20

Credit

47.49%

25.31%

-22.18

Home/Housing

39.34%

30.72%

-8.62

Liabilities

34.60%

36.49%

1.89

Hull

55.47%

70.03%

14.56

Rural

38.74%

34.43%

-4.31

Financial Risks

40.65%

19.46%

-21.19

Special Risks

4.98%

41.53%

36.55

60.21%

57.59%

-2.62

Total for General Insurance

Source: SUSEP

pp = percentage points. Loss Ratio = retained loss/earned premium.

The acquisition costs in the segment increased 0.63 percentage points as showed. Costs â&#x20AC;&#x201C; General Insurance Acquisition Costs

2009

2010

% Variation 2010/2009 pp

Acquisition Costs

20.58%

21.21%

0.63

pp = pontos percentuais. Acquisition Costs = acquisition costs/earned premium.

Source: SUSEP

Portfolio Mix of the General Insurance Segment – 2010 Groups / Branches

Insurance Premium (R$)

Gross Earned Premium (R$)

Net Premium (R$)

Earned Premium (R$)

Direct Loss (R$)

Net Loss (R$)

Acquisition Cost (R$)

Motor

20,052,289,283 20,052,338,207 19,870,508,081 18,570,125,042 12,732,654,341 11,869,491,217 3,723,639,227

Loss Ratio 63.92%

Personal Accidents Coverage for Passengers

324,886,732

324,877,004

322,917,410

307,089,666

34,931,142

34,665,694

63,070,462

11.29%

Liability – Interstate and International Land Transit Carrier

107,161,735

51,305,897

51,521,488

47,147,229

22,749,241

7,401,031

44.15%

50,900,664

39,275,227

14,569,456

3,608,149

3,367,048

5,458,870

23.11%

2,894,936

2,894,744

2,844,324

19,598

1,100,460

0.69%

15,169,944,007 15,170,550,711 15,118,589,874 14,206,081,718 9,893,272,373 9,120,964,791 2,910,133,962

64.20%

Extended Guarantee Green Card Vehicles Liability – International Transit Carrier - Personal

3,963,497

1,088,781

68.47%

Facultative Liability

4,389,568,287 4,389,020,138 4,329,384,047 3,982,229,755 2,749,034,775 2,683,761,348

735,385,661

67.39%

Property

7,798,141,363 7,788,497,179 5,858,547,848 5,165,260,847 2,643,946,228 1,565,756,292 2,221,512,097

30.31%

Traditional Fire Homeowner Theft/Robbery Comprehensive Condominium Coverage Comprehensive Business Coverage Loss of Profits

6,932,922

7,737,993

6,933,019

7,733,362

6,140,882

-5,453,981

5,788,635

4,660,673

-5,838,960

16,050,162

16,675,346

4,659,614

1,267,444,175 1,264,403,949 1,246,405,834 1,146,928,696

-285.59%

268,115,444

326,113,650

388,371,927

28.43%

23,301,898

23,266,930

13,508,596

14,314,787

4,803,084

2,048,856

2,671,227

14.31%

197,306,065

197,309,272

164,692,711

141,264,315

94,803,239

77,277,497

48,602,810

54.70%

1,429,464,419 1,429,661,580 1,127,936,155 1,054,282,205

746,048,610

553,341,357

311,533,930

52.49%

8,693,901

8,687,648

3,289,765

1,814,063

-7,103,845

-764,353

165,817

-42.13%

Engineering Risks

460,116,314

460,982,018

122,468,671

118,068,573

101,400,830

27,899,972

20,028,553

23.63%

Miscellaneous Risks

961,587,088

962,940,042

825,100,645

914,122,467

309,646,081

211,678,808

449,001,776

23.16%

5,628,884

5,628,865

936,068

1,090,162

-320

750,400

369,433

68.83%

Extended Guarantee – Property

2,092,076,044 2,091,853,265 2,091,853,265 1,518,250,168

289,063,775

273,089,308 1,008,072,736

17.99%

Named and Operational Risks

1,344,784,582 1,336,030,248

821,119,168

DPVAT

2,870,692,052 2,896,384,900 2,896,384,900 2,910,820,230

Home / Housing

1,105,238,768 1,105,235,095 1,065,311,254

Cargo (Goods in Transit)

1,969,855,069 1,969,231,269 1,751,281,898 1,773,832,029 1,273,337,126 1,004,890,279

Bankers Blanket Bond

267,810,119

260,964,371 844,690,973

77,645,451

-11,965,726

29.75%

12,604,843 2,550,515,271

40,223,611

87.62%

28,870,780

30.72%

261,674,650

259,494,056

382,402,584

56.65%

National Cargo

616,203,920

615,138,071

536,147,508

552,014,511

432,505,644

312,475,195

101,303,803

56.61%

International Cargo

439,478,762

437,513,881

353,189,147

359,157,120

205,988,479

116,403,619

78,855,125

32.41%

3,948

987

0.00%

21,052,481

20,779,856

19,231,670

19,299,288

18,998,081

15,622,717

4,239,645

80.95%

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

8,956,984

8,959,923

8,240,817

8,364,734

6,668,487

5,471,893

1,340,295

65.42%

22,351,481

22,232,319

21,035,711

21,069,548

11,467,638

9,196,873

5,119,226

43.65%

Liability – Land Transit Carrier (Cargo)

600,356,731

602,457,492

568,518,861

569,380,817

444,518,535

394,241,627

135,256,629

69.24%

Liability – Cargo Diversion

247,874,476

248,603,049

233,260,228

233,114,611

150,920,133

149,538,096

54,176,539

64.15%

Liability – Air Transit Carrier (Cargo)

Ship Owner’s Liability

13,576,286

13,542,730

11,654,008

11,427,452

2,270,129

1,940,259

2,110,335

16.98%

917,700,882

898,499,156

363,620,573

285,503,264

162,148,026

55,566,058

-10,697,886

19.46%

7,207,440

7,214,390

2,680,792

1,494,537

1,894,153

725,602

-4,749,325

48.55%

Private Obligations Guarantee

205,310,490

200,657,737

48,773,247

34,096,832

41,559,014

7,272,123

-6,784,896

21.33%

Public Obligations Guarantee

305,444,494

295,240,824

85,724,000

68,697,633

19,037,095

7,324,161

-21,178,350

10.66%

Rental Guarantee

190,936,215

190,939,485

188,843,850

179,402,766

85,594,879

40,079,650

48,422,590

22.34%

45,316,799

43,210,865

6,976,820

3,974,043

14,005,155

-77,891

-12,511,466

-1.96%

163,485,444

161,235,855

30,621,864

-2,162,547

57,730

242,413

-13,896,439

Financial Risks Financial Guarantee

Public Concessions Guarantee Judicial Guarantee

-11.21% Source: SUSEP

Portfolio Mix of the General Insurance Segment – 2010 Groups / Branches Credit Export Credit – Commercial Risk Export Credit – Political Risk

Insurance Premium (R$)

Gross Earned Premium (R$)

Net Premium (R$)

Earned Premium (R$)

Direct Loss (R$)

Net Loss (R$)

Acquisition Cost (R$)

Loss Ratio

426,152,848

311,554,663

343,277,138

220,545,890

86,876,598

29,004,444

25.31%

29,135,910

3,902,716

3,903,095

-3,437,531

740,157

-3,344,446

18.96%

33,731

1,928

5,499

-200

-22,485

-3.64%

Internal Credit – Commercial Risk

248,373,494

165,521,489

197,211,173

162,436,226

71,831,051

23,678,334

36.42%

Internal Credit – Individual Risk

148,609,713

142,128,530

142,157,371

61,547,195

14,305,590

8,693,041

10.06%

Liabilities

749,055,585

750,099,384

389,430,796

371,308,929

217,393,208

135,504,795

65,387,206

36.49%

Directors and Officers Liability (D&O)

147,801,791

150,655,412

54,978,148

46,546,876

63,251,019

23,096,479

5,450,258

49.62%

General Civil Liability

500,658,187

498,666,797

278,644,789

275,165,812

131,132,616

91,961,182

45,946,366

33.42%

Professional Civil Liability

100,595,607

100,777,175

55,807,859

49,596,241

23,009,573

20,447,134

13,990,582

41.23%

Special Risks

174,442,293

172,702,526

25,891,543

33,477,651

225,353,299

13,903,323

1,973,333

41.53%

Oil and Gas

154,976,652

158,267,695

25,479,239

31,120,307

225,353,300

13,910,323

2,193,467

44.70%

6,888,614

713

671

-1

-214,800

0.00%

12,577,027

7,546,217

411,591

2,356,673

-7,000

-5,334

-0.30%

Hull

563,667,321

571,931,755

189,803,228

165,128,563

298,365,041

115,635,320

25,720,995

70.03%

Marine

218,270,920

216,727,444

117,697,545

109,130,703

167,020,820

79,246,102

21,851,005

72.62%

Aviation

335,177,617

344,985,557

67,603,597

51,828,556

129,487,142

35,192,795

3,173,237

67.90%

Hangarkeepers Liability

5,750,633

398,392

300,221

591,147

37,842

78,242

12.60%

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

4,468,151

4,468,121

4,103,694

3,869,083

1,265,932

1,158,581

618,511

29.94%

1,022,854,192 1,022,846,298

540,491,274

484,154,511

245,033,257

166,696,648

56,352,267

34.43%

Nuclear Risks Satellites

Rural Agricultural Insurance without FESR Coverage

201,000,677

13,895,318

11,292,471

22,097,623

3,617,979

-20,782,090

32.04%

Agricultural Insurance with FESR Coverage

205,817,042

18,247,360

21,722,224

4,320,358

-5,781,866

-18,993,919

-26.62%

Farming Insurance without FESR Coverage

1,487,193

573,895

636,709

901,628

230,140

32,161

36.15%

Forest Insurance without FESR Coverage

6,582,668

6,596,422

1,028,270

854,595

920,711

41,894

-512,635

4.90%

164,354

44,939

39,431

-21,841

-4,621

11,368

-11.72%

218,253

-437,877

Farming Building and Products

104,837,211

80,727,952

70,771,619

90,543,873

71,114,661

14,198,229

100.48%

Property and Goods on Lien – Private Financial Institutions

148,899,628

148,877,980

120,658,736

105,205,069

66,430,538

52,229,169

32,394,560

49.65%

Rural Property and Goods on Lien – Public Financial Institutions

190,805,414

146,320,411

136,519,750

32,014,223

21,839,235

9,832,103

16.00%

7,032,029

2,768,244

2,575,871

4,812,206

1,353,470

227,394

52.54%

156,227,976

156,226,149

134,536,680

22,795,685

22,494,464

39,945,036

16.72%

Other

-12,177

-1,434,022

Insurances Abroad

-14,331

-1,436,176

Branch Offices Abroad

2,154

Forest Insurance with FESR Coverage Insurance in respect of the Rural Product Coverage

Bloodstock and Livestock Life Insurance of the Rural Producer

General Insurance Segments

60 -475953.26%

37,650,089,656 37,653,918,617 33,262,826,058 30,947,579,177 18,293,043,732 17,822,895,835 6,564,388,658

57.59% Source: SUSEP

Motor Insurance The Motor group presented, in 2010, premiums income of R$20.1 billion, a 15.3% growth if compared to 2009 income of R$17.4 billion. Motor

Values in R$ thousand

2009 Branch

Gross Earned Premiums

Personal Accidents Coverage for Passengers

2010 Gross Earned Premiums

% Share

286,651

0.87%

324,877

0.86%

Liability – Interstate and International Land Transit Carrier

93,884

0.29%

107,162

0.28%

Extended Guarantee

26,783

0.08%

50,901

0.14%

2,566

0.01%

2,895

0.01%

13,350,595

40.58%

15,170,551

40.29%

7,554

0.02%

6,933

0.02%

3,630,153

11.04%

4,389,020

11.66%

17,398,186

52.89%

20,052,338

53.25%

Green Card Vehicles – Hull Liability – International Transit Carrier Personal Facultative Liability Motor

Source: SUSEP

Insured Fleet / Circulating Fleet Year

Circulating Fleet (DENATRAN)

Processed Tickets (Seguradora Líder)

Insured Fleet (FenSeg)

IF/CF

IF/PT

2004

39,240,875

29,401,185

8,398,491

21.40%

28.57%

2005

42,071,961

31,344,526

8,585,374

20.41%

27.39%

2006

45,372,640

33,508,344

9,254,242

20.40%

27.62%

2007

49,644,025

36,286,115

10,022,610

20.19%

27.62%

2008

54,506,661

39,841,139

11,246,429

20.63%

28.23%

2009

59,361,642

42,764,953

12,328,417

20.77%

28.83%

2010

64,817,974

47,547,462

* 13,164,000

20.31%

27.69%

* Estimated Data

The Extended Guarantee in the Motor Insurance Gross Earned Premium (R$)

Net Premium (R$)

Earned Premium (R$)

Direct Loss (R$)

Net Loss (R$)

Acquisition Cost (R$)

2010 Extended Guarantee

50,900,664

39,275,227

14,569,456

3,608,149

3,367,048

5,458,870

2009 Extended Guarantee

26,782,905

19,930,226

5,174,618

1,497,253

1,044,937

3,160,010

90.05%

97.06%

181.56%

140.98%

222.22%

72.75%

Year

Branch

2010/2009 Difference

Property Insurance Property Insurance accounted in 2010 a 20.1% growth, with income of R$7.8 billion against R$6.5 billion in 2009. Property

Values in R$ thousand

2009 Branch

Gross Earned Premiums

Traditional Fire

2010 % Share

Gross Earned Premiums

% Share

7,243

0.02%

7,733

0.02%

1,031,012

3.13%

1,264,404

3.36%

21,436

0.07%

23,267

0.06%

168,588

0.51%

197,309

0.52%

1,252,771

3.81%

1,429,662

3.80%

4,825

0.01%

8,688

0.02%

535,303

1.63%

460,982

1.22%

1,089,231

3.31%

962,940

2.56%

5,990

0.02%

5,629

0.01%

Extended Guarantee

1,248,333

3.79%

2,091,853

5.56%

Named and Operational Risks

1,121,433

3.41%

1,336,030

3.55%

Property

6,486,165

19.72%

7,788,497

20.68%

Homeowners Theft / Robbery Comprehensive Condominium Coverage Comprehensive Business Coverage Loss of Profits Engineering Risks Miscellaneous Risks Bankers Blanket Bond

Source: SUSEP

The Extended Guarantee in the Property Insurance Gross Earned Premium (R$)

Net Premium (R$

Earned Premium (R$)

Direct Loss (R$)

Net Loss (R$)

Acquisition Cost (R$)

2010 Extended Guarantee

2,091,853,265

1,518,250,168

289,063,775

273,089,308

1,008,072,736

2009 Extended Guarantee

1,248,333,156

1,268,185,499

163,979,828

164,904,327

866,833,993

67.57%

19.72%

76.28%

65.60%

16.29%

Year

Branch

2010/2009 Difference

100

DPVAT Insurance

to the Federal Government, namely: 45% to the National Health Fund, of the Ministry of Health, as set forth in the Law no. 8212/1991, amended by the Law no. 9503/1997, in order to finance the medical-hospital 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. 9503/1997, in order to finance campaigns of accidents prevention and traffic education.

In 2010, the DPVAT conventions income, that includes 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$2.9 billion. This income represented growth of 7.9% in relation to 2009 income, in the amount of R$ 2.7 billion. From this total income of the DPVAT Insurance, 50% are immediately transferred DPVAT

Values in R$ thousand

2009

2010

Branch

Gross Earned Premiums (R$)

% Share

Gross Earned Premiums (R$)

% Share

DPVAT

2,683,869

8.16%

2,896,385

7.69% Source: SUSEP

Cargo Insurance The Civil Liability branches related to the Cargo segment were responsible in 2010 for the premiums income in the amount of R$916 million, corresponding to 54.3%. The National Cargo amounted to R$615 million, 31.2% of the total, and the International Cargo amounted to R$438 million. Cargo

Values in R$ thousand

2009 Branches

Gross Earned Premiums

2010 % Share

Gross Earned Premiums

% Share

National Cargo

547,930

1.67%

615,138

1.63%

International Cargo

379,830

1.15%

437,514

1.16%

0.00%

Liability- International Transit Carrier (Cargo)

Liability- Interstate and International Land Transit Carrier

16,680

0.05%

20,780

0.06%

Liability- Railways Transit Carrier (Cargo)

11,380

0.03%

8,960

0.02%

Liability- Air Transit Carrier (Cargo)

18,071

0.05%

22,232

0.06%

Liability- Land Transit Carrier (Cargo)

494,192

1.50%

602,457

1.60%

Liability- Cargo Diversion

208,635

0.63%

248,603

0.66%

9,287

0.03%

13,543

0.04%

1,686,007

5.13%

1,969,231

Ship Ownersâ&#x20AC;&#x2122; Liability Cargo

5.23% Source: SUSEP

101

Premium Income by Federation Units and Branches of Insurance - 2010

According to the following charts, it may be conclude that within the general insurance segment, Motor was the branch of larger representativeness in all the states of the country, with 53.4% in Brazil as a whole. Standing in the second position is the Property group, position presented in almost all the Brazilian states, with 20.6% of representativeness in the Country.

The state of S達o Paulo was responsible for the larger premiums income in general insurance, with R$17.8 billion, presenting a 13.9% increase in relation to the previous year, and extending its share in the national scenario from 45.7% to 47.5% in 2010.

Brazil Motor

53.4%

Property

20.6%

DPVAT

7.7% 5.2%

Cargo (Goods in Transit) Credit

1.1%

Home/Housing

2.9%

Liabilities

2.0%

Hull

1.5%

Rural

2.7%

Financial Risks

2.4%

Special Risks

0.4%

Others 0.0% Source: SUSEP

Rio de Janeiro Motor

49.7%

Property

20.2%

DPVAT

6.7% 2.9%

Cargo (Goods in Transit)

1.8%

Credit Home/Housing

5.6%

Liabilities

2.8%

Hull Rural

4.9% 0.1%

Financial Risks Special Risks

4.6% 0.7%

Others 0.0% Source: SUSEP

102

S達o Paulo Motor

47.4% 27.4%

Property 5.3%

DPVAT

6.6%

Cargo (Goods in Transit) 1.3%

Credit

2.3%

Home/Housing Liabilities

2.9%

Hull

1.6%

Rural

1.4%

Financial Risks Special Risks

2.9% 0.8%

Others 0.0% Source: SUSEP

Rio Grande do Sul Motor

53.9%

Property

13.9%

DPVAT

9.3% 8.2%

Cargo (Goods in Transit) Credit

0.2%

Home/Housing Liabilities Hull

2.9% 1.0% 0.2%

Rural Financial Risks

9.1% 1.3%

Special Risks 0.0% Others 0.0% Source: SUSEP

Minas Gerais Motor

59.3%

Property

14.1%

DPVAT

11.6% 4.7%

Cargo (Goods in Transit) Credit

0.1%

Home/Housing

3.8%

Liabilities

1.1%

Hull

1.0%

Rural Financial Risks

2.7% 1.6%

Special Risks 0.0% Others 0.0% Source: SUSEP

103

Paranรก Motor

59.9%

Property

13.7%

DPVAT

8.3% 4.0%

Cargo (Goods in Transit) Credit

0.2%

Home/Housing Liabilities Hull

2.5% 1.2% 0.5%

Rural

7.3%

Financial Risks

2.5%

Special Risks 0.0% Others 0.0% Source: SUSEP

Bahia Motor

67.8%

Property

11.2%

DPVAT

8.2% 2.2%

Cargo (Goods in Transit) Credit

0.2%

Home/Housing

3.6%

Liabilities

0.6%

Hull

0.9%

Rural

2.9%

Financial Risks Special Risks

2.3% 0.1%

Others 0.0% Source: SUSEP

Goiรกs Motor

62.5%

Property

14.7%

DPVAT Cargo (Goods in Transit) Credit

11.2% 1.2% 0.1%

Home/Housing

2.0%

Liabilities

0.2%

Hull

0.2%

Rural Financial Risks

7.7% 0.3%

Special Risks 0.0% Others 0.0% Source: SUSEP

104

Santa Catarina Motor

63.1%

Property

12.9%

DPVAT

10.1% 4.8%

Cargo (Goods in Transit) Credit 0.0% Home/Housing

2.1%

Liabilities

0.7%

Hull

0.6%

Rural Financial Risks

4.7% 1.1%

Special Risks 0.0% Others 0.0% Source: SUSEP

Technical Committees of FenSeg

• The committees will have the maximum of

The technical committees, composed by insurance companies practitioners, are specialized advisory bodies of FenSeg that have the following duties: evaluate the impact of published regulations, proposing procedures recommendations; appraise matter and develop studies of technical nature in the several branches of insurance; answer queries made by the insurance companies and other entities; submit to the Executive Board actions that meet the market interests; hold seminars/ workshops about themes of interest of the insurance companies practitioners, assureds and regulatory agencies; evaluate the need to carry out programs for training and qualification of professionals in the different insurance segments; appoint representatives to attend events and meetings on relevant topics pursuant to their scope of action.

• Both, presidents of the committees and their

The technical committees regulation provides for, amongst other requirements, that: Committee Name General Civil Liability

15 permanent members;

members, will be elected for a two-year term;

• The presidents of the committees could not exercise more than two consecutive terms;

• It will become hindered and will loss,

therefore, the term, the member that miss more than three consecutive meetings or half of the meetings held over a12 months period;

• The meetings of the committees will be held, ordinarily, unless special situations, at least once every quarter and, extraordinarily, if convened by its president, by the Executive Board of FenSeg or upon the members request.

In 2010, as shown below, FenSeg held 65 meetings in seven committees, which discussed and analyzed about 118 subject matters considered relevant.

Meetings

Members

Guests

Attendees

Subject Matters

Property Risks

Motor Insurance

Credit and Guarantee Insurance

Home / House Insurance

Rural Insurance

Cargo Insurance

105

Technical Committees

Working Groups

Committee on General Civil Liability President: Luiz Macoto Sakamoto, Yasuda Seguros S.A.

WG on Aviation Insurance It is subordinate to the Committee on Cargo. Coordinator: Carlos Eduardo Polizio, Mapfre Seguradora S.A.

Committee on Property Risks President: Adelson Almeida Cunha, Zurich Minas Brasil Seguros S.A. Committee on Motor Insurance President: Mauricio Galian, Mapfre Seguradora S.A. Committee on Credit and Guarantee Insurance President: Rogerio Guede Vergara, Mapfre Seguradora de Crédito e Garantias S.A. Commitee on Home/Housing Insurance President: Armando Petrillo Grasso, Bradesco Auto/RE Companhia de Seguros Committee on Rural Insurance President: Luiz Carlos Meleiro, Allianz Seguros S.A. Committee on Cargo Insurance President: Artur Luiz Souza dos Santos, Mapfre Seguradora S.A.

Subcommittees Subcommittee on 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

106

WG on Management of Cargo Risks It is subordinate to the Committee on Cargo. Coordinators: Maurício França, Liberty Seguros S.A. and Daniel Koji Kobayashi, Yasuda Seguros S.A. WG on Extended Guarantee It is subordinate to the Committee on Property Risks. Coordinator: Fabio Marques, Itaú Seguros S.A.

Chambers, Commissions, Councils and Committees Participation of Fenseg in chambers, commissions, councils, committees and working groups of other entities. Special Committee of SUSEP Representative: Jayme Brasil Garfinkel (FenSeg) Curator Council of the Wages Variation Compensation Fund (FCVS) Holder: José Lopes Coelho (Caixa Seguradora) Deputy: Armando Petrillo Grasso (Bradesco) Technical Group of FCVS Representatives: Armando Petrillo Grasso (Bradesco), Antonio Carlos Gonçalves Silva (Advisor) and Sebastião Pedro (Excelsior) Appeals Committee of FCVS Holder: Antonio Carlos Gonçalves Silva (Advisor) Deputy: Armando Petrillo Grasso (Bradesco) Accounting Committee of SUSEP Representatives: Denis dos Santos Morais (Brasilveículos), Haydewaldo Roberto Chamberlain da Costa (Bradesco) and Laênio Pereira dos Santos (Sulamérica)

National Council of Traffic Road (CONTRAN) Theme Chamber on Vehicles Affairs Holder: Adhemar Fujii (Advisor) Deputy: Neival Rodrigues Freitas (FenSeg) Theme Chamber of Legal Effort Holder: Leonardo Girão (CNSeg) Deputy: Márcio Alexandre Malfatti (Advisor) Ministry of Agriculture Agribusiness Council Holder: José Américo Peón de Sá (CNSeg) 1st Deputy: Luiz Roberto Paes Foz (UBF) 2nd Deputy: Artur Luiz Souza dos Santos (Mapfre) Sectorial Chamber of the Soy Productive Chain Holder: Wady José Morão Cury (Aliança do Brasil) Deputy: Geraldo Mafra (UBF) Theme Chamber of the Agribusiness Financing Holder: Arlindo da Conceição Simões Filho (Allianz) Deputy: Neival Rodrigues Freitas (FenSeg) ABNT/CB-24 Committees – Risk Potential in Construction Representatives: Daniel Barreto (Porto Seguro), Fábio Tulmann (Mapfre), Michele Perruolo (RSA) and Robson Vissotto (RSA) Fire Detection and Warning Systems Representatives: Daniel Barreto (Porto Seguro), Teotônio Maria da Silva (Mapfre) and Wilson Dedônio (Liberty) Fire Brigade Representative: Daniel Barreto (Porto Seguro) Fire Protection of the Chemical Industry Representatives: Daniel Barreto (Porto Seguro), Flavia Racanicchi Soares (Itaú), José Augusto de Alencar Jr.(Itaú), Marcelo Luiz Pereira (Sulamérica), Marcos Cassaro (Sulamérica) and Welton Ribeiro da Silva (Liberty)

Liquid Foam Generator for Fire Extinguishment Representative: Daniel Barreto (Porto Seguro) Fire Protection by Sprinklers Representatives: Daniel Barreto (Porto Seguro), Fabio Fanti (Zurich), Flavia Racanicchi Soares (Itaú) e Paulo Sergio Testa (Itaú) Fire Extinguishers Representative: Daniel Barreto (Porto Seguro) Hydrant and Hose Reel Systems Representatives: Ronoel Souza (Zurich) and Altevir Marquezini Palmas Junior (Tokio Marine) Transaction Committee - FenSeg/ FENACOR Representatives: Marco Antonio Gonçalves (Bradesco), Marcos Acildo Ferreira (Marítima) and Roberto Santos (Azul) CNSeg Committee on Management of the Central of Services and Protection to Insurance (CODAM) Representatives: Assizio Aparecido de Oliveira (Mapfre Seguros), Oswaldo Mário Pego de Amorim Azevedo (Sulamérica) and Reinaldo D’Errico (Liberty Seguros) Committee on Development of the Central of Services and Protection to Insurance (CONDE) Representatives: João Francisco Silveira Borges da Costa (HDI) and Hyung Mo Sung (Mitsui)

Research and Studies Actions developed, especially within the scope of the technical committees: Institute of Economic Research (FIPE) – Table of Vehicle Market Value FenSeg and FIPE has been keeping 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.

107

Center for Road Experimentation and Safety (CESVI) – Vehicle Identification Number (VIN)/Body/Recall Fenseg, in partnership with CESVI Brasil, developed the VIN/Body/Recall Program that has the purpose the decoding of information contained in the automotive vehicles body and is in phase of introduction in the insurance companies.

Brasil sem Chamas Program FenSeg was invited to participate of the Program Brasil sem Chamas, through its Committee on Property Risks. The Program consists in studying 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, such program intends to analyze, more deeply, the insurer environment before its importance and consequent impacts of its actions and regulations in order to improve the area of safety against fire. This way, it may 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 had established the technical requirements for the fire protection, and PRESI Circular – 052/77 of IRB-Brasil Re, which had established the classification of the cities requirements; b) the end of the reinsurance monopoly by IRB – Brasil Re, in the year of 2008.

Projects and Standards Monitoring Amongst the major Legislative Projects and Standards related to General Insurance that have been monitored are:

Senate Bill no. 372/05 On December 15th, 2010, the En Banc Federal Senate approved the Final Text of the

108

Senate Bill no. 372/05, of the Senator Romeu Tuma, that regulates the performance of land automotive vehicles dissembling companies. The project, originally approved in the Federal Senate, was in process in the House of Representatives, where was amended to improve its text, and go back to the Senate as House of Representatives Amendment (ECD) to the Senate Bill no. 372/05). The project was sent for presidential enactment.

Catastrophe Fund for the Rural Insurance The Complementary Law no. 137/2010, that constitutes the Catastrophe Fund, enacted on August 26th, 2010 by the president Luiz Inácio Lula da Silva, authorizes the constitution of a fund that will have public-private partnership to assure the insurance and reinsurance companies will count on complementary coverage of the rural insurance risks in cases of climate catastrophes, such as dry, intense freeze or rain in excess. The fund, of at least R$4 billion, will have as members the Federal Government, insurance companies, reinsurance companies, agribusiness and cooperatives. The measure intends to improve the confidence and guarantee, so that the insurance and reinsurance companies extend the offer of rural insurance products in the regions of more unpredictable climate and more sensitive cultures in relation to climate adversities. The Catastrophe Fund, which substituted the Fund for the Rural Insurance Stability, will be private and administered by legal entity, constituted specifically with this purpose. According to the new law, the fund will have a board of directors, composed by representatives of the government and, at least, one representative of every segment involved, as insurers, reinsurers, cooperatives and agribusiness companies. The Committee on Rural Insurance has been taking the initiative to held meetings with federal and local agencies, as well as with entities involved in this process, aiming at understanding the expectance of each one

and thus may assist to conduct the regulatory process, so that to meet the wishes of everybody involved respecting the law in force.

CONTRAN Resolution no. 362/10 With the participation of FenSeg, the Theme Chamber on Vehicles Affairs (CTAV) approved the CONTRAN Resolution no. 362/10, dated October 15th, 2010, substituting the CONTRAN Resolution no. 297/08, that establishes the classification criteria – in small, mid and large amount of the losses arising from accidents with automobiles, motorcycles, buses and trucks. FenSeg will make available training for the Traffic Road Agents (military policemen, DETRAN agents our highway policemen), so that to obtain the proper classification of the damages sustained by the vehicles due to accidents, in order to prevent that a wrong classification may result, in case of insured vehicles, in a full indemnity.

Further Actions Irregular Exercise of the Insurance Activity It deserves to be highlighted the monitoring, jointly with the Central of Services and Protection to Insurance of CNSeg, of the required arrangements to interrupt the cooperatives and associations activities that

have been acting irregularly as insurance companies.

Forum of the Technical Committees With the objective to divulge the technical subject matters handled within the scope of its Technical Committee, FenSeg is making available in its website the “Fórum das Comissões Técnicas”. Primarily, the project is serving only the Committee on General Civil Liability, but in 2011 it will serve the further Committees

International Entities International Union of Marine Insurance The purpose of the FenSeg affiliation to the International Union of Marine Insurance (IUMI) is to facilitate the information exchange amongst its associates and the international insurers and reinsurers and also to provide the co-operation with organisms and entities intended for the marine activity. International Association of Engineering Insurers Upon the proposal of the Committee on Property Risks, FenSeg, since 2008, is affiliated to the International Association of Engineering Insurers (IMIA). IMIA is a forum to promote the knowledge and best practices in the engineering insurance field.

109

Chapter V

FenaPrevi The Personal Coverage Segment 111

The First Months of the New Management Few months elapsed since the new Executive Board of FenaPrevi took office, in February 7th, 2010, it was possible to conclude some projects, develop others, and take new initiatives of utmost importance for the market development and promotion. Within this period, important milestone was the conclusion of the first stage of the Biometric Tables Project, with the approval, by SUSEP, of the Biometric Tables BREMS (survival and mortality, for both the genders), whose construction was based on the Brazilian insurance market experience. Such project was extended in 2010, with two new work fronts: the construction of the Disability Tables (for both the genders), based on the Brazilian insurance market experience, and the improvement function organization for the Biometrical Tables BR-EMS. FenaPrevi, in the period, remained endeavoring efforts in order that matters of utmost importance for the personal coverages segment were approved, with special highlight for the â&#x20AC;&#x153;shieldâ&#x20AC;? of the consumer rights and for the regulation of the pension insurance with differentiated fiscal approach, when the resources will be used to meet health and education expenses of the assured and dependents. New projects were also developed, satisfying the urgent need to facilitate, simplify and extend the access to the social protection network provided by the personal coverages segment, including to the most vulnerable strata of the population to occurrences of misfortunes and by them affected. The proposals drafted aim at continuing the process of modernization for the contract way, adjusting the products acquisition to the technological developments and the new profile of the society, increasingly marked by practices addressed to the planet sustainability and more inclined to interaction by digital means. It is also under analysis proposal addressed to the organization of specific plan of personal insurance, similar to modalities commercialized in some countries. The proposals and projects are being submitted to pertinent analysis by the competent authorities and their approval, certainly, will contribute for the development and improvement of the market.

Marco Antonio Rossi President of FenaPrevi

112

The FenaPrevi The National Federation of Private Pension and Life (FenaPrevi) is a non-profit civil association that congregates and represents the companies and entities that compose the private pension and life insurance segments acting within the national territory and similar or fellow entities acting in the regional or national scope. The View, Mission and Values of FenaPrevi are the following: View of Future Be an independent institution, recognized and valued by associates, market and community, contributing for the development of personal and private pension insurance segments. Mission Contribute for the development of the personal and private pension insurance segments, representing institutionally their associates before regulatory agencies, market and community. Values • Focus in the Associates: Perform actions aligned to the strategic interests, paying attention and respecting their needs and appraising their impacts in the companies.

• Continuous Excellence: Work focused on

strategic purposes, creating alternatives that bring tangible benefits and results to the associates.

• Transparent Communication: Make

available information that add value, working in transparent way with the associates and community.

• Team Work: Develop actions jointly with

associates, respecting the sector differences and interests.

• Respect to Diversity: Develop and promote

actions that respect and value the individual and cultural differences.

• Ethics: Preserve the values established,

through honest behavior as independent institution, objecting the associates and community interests.

• Commitment to the Community: Build

credibility by responsible action aligned to the FenaPrevi values.

• Innovation and Imagination: Develop

innovative and creative solutions for the sector challenges.

113

Permanent Associates to FenaPrevi On December 2010, FenaPrevi counted on 79 Permanent Associates, amongst them 64 insurance companies and 15 non-profit open private pension entities. Associadas Efetivas à FenaPrevi 1 ACE Seguradora S.A.

41 Mapfre Nossa Caixa Vida e Previdência S.A.

2 Acvat - Previdência Privada

42 Mapfre Vera Cruz Vida e Previdência S.A.

3 Alfa Previdência e Vida S.A.

43 Mapfre Vida Seguradora S.A.

4 Allianz Seguros S.A.

44 Mares-Mapfre Riscos Especiais Seguradora S.A.

5 American Life Companhia de Seguros

45 Marítima Seguros S.A.

6 Aplub - Previdência Privada

46 MBM Previdência Privada

7 Aspecir Previdência

47 MBM Seguradora S.A.

8 Azul Companhia de Seguros Gerais

48 Metropolitan Life Seguros e Previdência Privada S.A.

9 Banestes Seguros S.A.

49 Mitsui Sumitomo Seguros S.A.

10 Bradesco Vida e Previdência S.A.

50 Mongeral AEGON Seguros e Previdência S.A.

11 Brasilprev Seguros e Previdência S.A.

51 Nobre Seguradora do Brasil S.A.

12 Caixa Seguradora S.A.

52 Panamericana de Seguros S.A.

13 Caixa Vida e Previdência S.A.

53 Pecúlio Abraham Lincoln - Amal

14 Capemisa Seguradora de Vida e Previdência S.A

54 Porto Seguro Cia. de Seguros Gerais

15 Centauro Vida e Previdência S.A.

55 Porto Seguro Vida e Previdência S.A.

16 Chartis Seguros Brasil S.A.

56 PREVICORP Previdência Privada

17 Chubb do Brasil Cia. de Seguros

57 Previmil Previdência Privada

18 Companhia de Seguros Aliança da Bahia

58 Prudential do Brasil Seguros de Vida S.A.

19 Companhia de Seguros Aliança do Brasil

59 QBE Brasil Seguros S.A.

20 Companhia de Seguros Previdência do Sul

60 Royal & Sunalliance Seguros (Brasil) S.A.

21 Companhia Excelsior de Seguros

61 Rural Seguradora S.A.

22 Companhia Mutual de Seguros

62 Sabemi Previdência Privada

23 CONAPP - Companhia Nacional de Seguros

63 Sabemi Seguradora S.A.

24 Confiança Companhia de Seguros

64 Safra Vida e Previdência S.A.

25 COSESP - Companhia de Seguros do Estado de São Paulo

65 Santander Seguros S.A.

26 Família Bandeirante Previdência Privada

66 Seguradora Líder dos Consórcios do Seguro DPVAT S.A.

27 Federal de Seguros S.A.

67 Sinaf Previdencial Cia. de Seguros

28 Federal Vida e Previdência S.A.

68 Sociedade Caxiense de Mútuo Socorro

29 GBOEX Grêmio Beneficente

69 Sul América Companhia Nacional de Seguros

30 Generali Brasil Seguros S.A.

70 Sul América Seguros de Pessoas e Previdência S.A.

31 HSBC Seguros (Brasil) S.A.

71 Tokio Marine Brasil Seguradora S.A.

32 HSBC Vida e Previdência (Brasil) S.A.

72 Tokio Marine Seguradora S.A.

33 Icatu Seguros S.A.

73 União Previdenciária Cometa do Brasil - COMPREV

34 Indiana Seguros S.A.

74 Unimed Seguradora S.A.

35 Investprev Seguros e Previdência S.A.

75 UNIPREV União Previdenciária

36 Itaú Seguros S.A.

76 Upofa União Previdencial

37 Itaú Vida e Previdência S.A.

77 Yasuda Seguros S.A.

38 Kyoei do Brasil Cia. de Seguros

78 Zurich Minas Brasil Seguros S.A.

39 Liberty Seguros S.A.

79 Zurich Vida e Previdência S.A.

40 Luterprev - Entidade Luterana de Previdência

114

Executive Board On December 2010 the composition of the Executive Board of FenaPrevi was the following: President Marco Antonio Rossi

Bradesco Seguros S.A.

1 Vice President st

Renato Russo

Sul América Seguros de Pessoas e Previdência S.A.

Vice Presidents Francisco Alves de Souza

União Previdenciária Cometa do Brasil - COMPREV

Osvaldo do Nascimento

Itaú Vida e Previdência S.A.

Sérgio Ricardo Rosa

Brasilprev Seguros e Previdência S.A.

Officers Bento Aparicio Zanzini

Mapfre Vera Cruz Vida e Previdência S.A.

Everson Oppermann

Luterprev - Entidade Luterana de Previdência

Fabio Lins de Castro

Prudential do Brasil Seguros de Vida S.A.

Fábio Ohara Morita

Porto Seguro Cia. de Seguros Gerais

Fernando Alves Moreira

HSBC Seguros (Brasil) S.A.

Gilberto Duarte de Abreu Filho

Santander Seguros S.A.

Helder Molina

Mongeral AEGON Seguros e Previdência S.A.

Hélio Hiroshi Kinoshita

Metropolitan Life Seguros e Previdência Privada S.A.

Juvêncio Cavalcante Braga

Caixa Vida e Previdência S.A.

Luciano Snel Correa

Icatu Seguros S.A.

Mário Jorge Rodrigues Coelho da Cruz

Generali Brasil Seguros S.A.

Nilton Celeste Bermudez

GBOEX Grêmio Beneficente

Oriovaldo Pereira Lima Filho

Previmil Previdência Privada

Paulo Miguel Marraccini

Allianz Seguros S.A.

Pedro Cláudio de Medeiros B. Bulcão

Sinaf Previdencial Cia. de Seguros

115

Technical Committees FenaPrevi, on December 2010, counted on eight Technical Committees, composed by representatives of the Permanent Associates, as below: Technical Committees

Presidents

Actuarial Committee

Jair de Almeida Lacerda Júnior (Bradesco Vida e Previdência S.A.)

Committee on Accounting and Fiscal Affairs

Elizeu da Silva Souza (Santander Seguros S.A.)

Committee on Legal Affairs

Luiz Fernando Nascimento Bertoncello (Brasilprev Seguros e Previdência S.A.)

Committee on Communication, Marketing and Events

Oriovaldo Pereira Lima Filho (Previmil Previdência Privada)

Committee on Investments

Marcos Suryan Neto (Bradesco Vida e Previdência S.A.)

Committee on Survival Products

João Batista Mendes Angelo (Brasilprev Seguros e Previdência S.A.)

Committee of Risk Products

Thereza Christina Moreno de Oliveira (Prudential do Brasil Seguros de Vida S.A.)

SIDE Manager Committee

Julio Antonio Saraiva (Bradesco Vida e Previdência S.A.)

Statistic Data Introdution The income of the Personal Coverages Segment – represented by the Pension Plans and the Risk Coverages of Personal Insurance – amounted to R$61.7 billion in 2010, a 18% growth in relation to 2009 and 55% of the total income of the insurance market (excluding health insurance). This performance revealed how good the economy was in 2010, with a 7.5% growing in the Gross Domestic Product (GDP) in relation to 2009, according to projections of the Ministry of Finance. As regards the GDP participation, the income of the Personal Coverages Segment represented 1.8% in 2010, 0.15 percentage points above comparing to 2009. This can be explained by the good performance of the economic indicators directly related to the population revenue.

116

The unemployment rate in the six metropolitan regions included in the Monthly Employment Research (PME) presented, on November 2010, the lower rate, 5.7% since the beginning of the research series, on March 2002. The number of workers with employment contract in the private market on November 2010 (10.4 million) increased 8.7% in the annual comparison, representing an additional of 839 thousand work stations with employment contract within this period. Even in accordance with the Monthly Employment Research (PME), the regular actual average revenue of the occupied people on November 2010, in the amount of R$1,516.70, presented a 5.7% increase in relation to November 2009, whereas the mass of regular actual average revenue of the occupied people, amounting to R$34.4

billion, presented a 9.6% increase in relation to November 2009.

pushed the Personal Coverages Segment, as much regarding to the Risk Coverages of Personal Insurance as to the Pension Plans, the latter representing 75% of the total income for the said segment.

The population revenue increase and the credit expansion stimulated the internal demand and

Values in R$ bi

Income Premiums + Contributions

2007 Pension Plans

28.1

2008

2009

31.8

2010

38.7

46.0

2010/2009 19%

Risk Coverages of Personal Insurance

10.6

12.0

13.7

15.7

15%

Total of the Personal Coverages Segment

38.7

43.8

52.4

61.7

18%

Insurance Market*

74.3

85.3

95.1

111.2

17%

Participation of the Personal Coverages Income in the Insurance Market

52%

51%

55%

2.661,3

3.031,9

3.185,1

3.424,0

Participation of the Personal Coverages Income in the GDP

GDP (Current Prices)**

1.45%

1.44%

1.65%

1.80%

IGP-DI

7.89%

9.10%

-1.43%

11.30%

IPCA

4.46%

5.90%

4.31%

5.91% Source: SUSEP, BCB, FGV, IBGE

* excluding data from health insurance ** 2010: calculation based on 7.5% increase, projected by the Ministry of Finance

Personal Coverages Segment â&#x20AC;&#x201C; Income in 2010 (Premiums and Contributions)

25% Pension Plans Risk Coverages of Personal Insurance

75%

The Personal Coverages Segment closed the year of 2010 with provisions (mathematical and technical) of R$226.2 billion, 95.5% related to the Pension Plans. Values in R$ bi

Provisions (Mathematical and Technical) Pension Plans Risk Coverages of Personal Insurance Personal Coverages Segment

December 2010 216.0 10.2 226.20 Source: SUSEP

117

Pension Plans The income in 2010 of the Pension Plans (risk and survival coverages of open private pension plans and coverages solely for survival in personal insurances plans) was R$46.0 billion, presenting increase of 18.9% in relation to the previous year. Values in R$ bi

Pension Plans Income (Premiums and Contributions) Coverages Period

Risk (open private pension plans)

Survival (open private pension plans and personal insurance)

Total

2008

1.7

30.1

31.8

2009

2.0

36.7

38.7

2010

2.0

44.0

46.0

2010/2009

19.9%

18.9% Source: SUSEP

The VGBL/VRGP plans, following the trend of the previous year, contributed significantly for obtaining this result, with income of R$36.7 billion, representing 80% of the total income of the Pension Plans. Values in R$ bi

Income (Premiums and Contributions) Open Private Pension Period

VGBL/ VRGP

PGBL/ PRGP

Traditional Plans Survival Coverage

Risk Coverage

Total

Individual Programmed Retirement Fund (FAPI)

Total

2008

23.5

5.1

1.5

1.7

3.2

8.3

0.01

31.8

2009

30.1

5.2

1.4

2.0

3.4

8.6

0.01

38.7

2010

36.7

6.1

1.2

2.0

3.2

9.3

0.01

46.0

2010/2009

21.9%

17.3%

-14.3%

0.0%

-5.9%

8.1%

18.9% Source: SUSEP

Income of Pension Plans

Values in R$ bi

3.2 3.4 3.4 4.5

118

3.2 5.1

20.2

23.5

2007

2008

6.1

5.2 30.1

36.7

VGBL PGBL Traditional Plans

2009

2010

From the total income in 2010, 12% refer to group plans, 3% to plans for minors and 85% to individual plans. Values in R$ bi

Income (Premiums and Contributions) Group Plans

Plans for Minors

Individual Plans

Period

VGBL/ VRGP

2008

1.8

1.9

0.9

4.6

2.1

0.5

0.3

2.9

19.6

2.7

2.0

0.01

24.3

31.8

2009

1.8

1.9

0.9

4.6

2.5

0.5

0.3

3.3

25.8

2.8

2.2

0.01

30.8

38.7

2010

2.2

2.4

0.8

5.4

0.7

0.4

0.3

1.4

33.8

3.3

2.1

0.01

39.2

46.0

2010/ 2009

22%

26%

-11%

17%

-72%

-20%

-58%

31%

18%

-5%

27% 19%

PGBL/ Traditional FAPI* Total PRGP Plans

VGBL/ VRGP

PGBL/ Traditional FAPI* Total PRGP Plans

VGBL/ VRGP

PGBL/ Traditional FAPI* PRGP Plans

Total

Source: SUSEP, FenaPrevi

* Individual Programmed Retirement Fund

Income by Segment

12% Individual Plans

Group Plans

85%

Plans for Minors

In 2010, 13,853 new legal entities contracted group plans, instituted or registered, and 1,233,217 individuals acquired individual plans. Number of Active Certificates (VGBL/VRGP + PGBL/PRGP + Traditional Plans) Individual Plans (Including Plans for Minors)

Group Plans

Period CNPJs

Certificates

CPFs

Certificates

2008

148,111

2,845,482

4,707,052

8,181,153

2009

165,498

3,174,821

4,657,982

9,088,583

2010

179,351

2,565,920

5,891,199

9,543,113 Source: FenaPrevi

119

The value of the provisions (mathematical and technical) accumulated in Pension Plans on December 2010 amounted to R$216 billion, showing a 22% increase in relation to the end

of 2009. The VGBL / VRGP plans contributed significantly for such result, with provisions of R$125 billion, that is, 58% of the total provision for Pension Plans. Values in R$ bi

Provisions (Mathematical and Technical) Period

VGBL/ VRGP

PGBL/PRGP

Traditional Plans

FAPI*

Total

Dec 2008

70.9

39.3

31.2

0.4

141.8

Dec 2009

96.6

48.5

31.5

0.4

177.0

Dec 2010

125.0

56.2

34.4

0.4

216.0

Dec 2010/ Dec 2009

29.4%

15.8%

9.2%

22% Source: SUSEP, FenaPrevi

* Individual Programmed Retirement Fund

The most part from the total value of the provisions, 79%, were accumulated in individual plans, followed by the group plans, 17%, and the plans for minors, with 4%. Values in R$ bi

Provisions (Mathematical and Technical) Group Plans Period

Plans for Minors

VGBL/ PGBL/ Traditional FAPI* Total VRGP PRGP Plans

VGBL/ VRGP

Individual Plans

PGBL/ Traditional FAPI* Total PRGP Plans

VGBL/ VRGP

PGBL/ Traditional FAPI* PRGP Plans

Total

2008

3.3

12.4

12.9

28.6

2.1

2.4

1.9

6.4

65.5

24.5

16.4

0.4

106.8 141.8

2009

4.5

14.7

13.4

32.6

2.8

3.1

1.7

7.6

89.3

30.7

16.4

0.4

136.8 177.0

2010

5.7

17.1

14.6

37.4

3.2

3.6

1.7

8.5

116.1

35.5

18.1

0.4

170.1 216.0

2010/ 2009

27%

16%

15%

14%

16%

12%

30%

16%

10%

24%

Provisions by Segment

17% 4% 79%

22%

Source: SUSEP, FenaPrevi

* Individual Programmed Retirement Fund

120

Total

Individual Plans Group Plans Plans for Minors

In 2010 were financially settled 42,550 portabilities through the Digital Document Interchange System (SIDE), in the total amount of R$ 2.9 billion. Portabilities Made through the SIDE Period

Values (in R$ billion)

Number (financially settled)

2007

1.46

32.882

2008

2.16

40.144

2009

2.37

42.916

2010

2.90

42.550

2010/2009

22.58%

-0.085% Source: FenaPrevi

The surrenders in 2010 amounted to R$19.5 billion, an increase of 18.2% in relation to 2009. Surrenders

Values in R$ bi

Pension Plans Period

VGBL

2007

Open Private Pension

Total

PGBL

Traditional Plans

Total

7.9

2.3

1.7

4.0

11.9

2008

12.4

2.8

1.5

4.3

16.7

2009

12.1

3.0

1.4

4.4

16.5

2010

15.2

3.1

1.2

4.3

19.5

2010/2009

25.6%

3.3%

-14.3%

-2.3%

18.2% Source: SUSEP

In 2010 were paid 103,725 benefits, amongst them 101,336 as income (24,220 disability and death annuities, and 77,116 revenues paid in plans with survival coverage). Number of Benefits Paid 2008 Allowance

2009

2010

2010/2009

1,928

2,275

2,389

5.01%

95,044

100,155

101,336

1.18%

Disability and Death Annuities

23,106

23,302

24,220

3.94%

Revenues from Retirement

71,938

76,853

77,116

0.34%

96,972

102,430

103,725

1.26%

Payment as Revenue

Total of Benefits Paid

Source: FenaPrevi

121

Risk Coverages of Personal Insurance The Insurance Premium value addressed to finance the Risk Coverages of Personal Insurance amounted to R$15.7 billion in 2010, 14.6% above the income of 2009, with tourism branch presenting the larger increase, 117.5%, a direct result of the larger revenue of the population and the favorable exchange to the international voyages.

The branch income of most representativeness was the Group Life Branch, with 49.8% of the total income of the Risk Coverages of Personal Insurance, followed by Credit Life (21.6%), similarly to the previous years. The credit life insurance grew in 2010 24.5% in relation to 2009, pushed by the C and D class rising and the larger access and use of the credit. Values in R$ million

2007 Credit Life Insurance Educational Insurance Random Events Individual Life Group Life PCHV Tourism Personal Accident – Individual Personal Accident – Collective Personal Insurance – Risk Coverages

2008

2009

2010

2010/2009

2010/2007

Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio Insurance Premium Loss Ratio

2052.6 26% 17.4 71% 399.1 32% 838.3 29% 5563.3 55% 0.3 47% 15.4 45% 253.8 34%

2316 25% 15.7 75% 383.1 35% 778.3 32% 6385 51% 0.8 -25% 16.2 34% 322.6 34%

2728.6 23% 17.1 112% 364.4 32% 835.8 32% 7213.4 49% 1.1 148% 15.4 78% 362.4 35%

3396.3 24% 19.5 73% 375.5 32% 1144.1 35% 7826.0 47% 1 -121% 33.5 44% 367.3 34%

24.5% 1pp 14.0% (39)pp 3.0% 0pp 36.9% 3pp 8.5% (2)pp -9.1% (269)pp 117.5% (34)pp 1.4% (1)pp

65.5% (2)pp 12.1% 2pp -5.9% 0pp 36.5% 6pp 40.7% (8)pp 233.3% (168)pp 117.5% (1)pp 44.7% 0pp

Insurance Premium

1461.8

1861.2

2169.5

2552.5

17.7%

74.6%

19%

16%

13%

12%

(1)pp

(7)pp

10602.0

12078.9

13707.7

15715.7

14.6%

48.2%

42%

39%

36%

35%

(1)pp

Loss Ratio Insurance Premium Loss Ratio

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

Insurance Premium 2010

Personal Accident (Individual + Collective) Group Life Credit Life Individual Life

0.3%

18.6%

2.4% 7.3%

49.8%

Random Events Tourism + Educational Insurance + PCHV

122

(7)pp Source: SUSEP

21.6%

The provisions related to the Risk Coverages of Personal Insurance amounted to R$10.2 billion in the end of 2010, being tht R$6 billion refer to the Group Life branch, representing 59% of the total. Technical and Mathematical Provisions - December 2010 Branches

Credit Life Insurance Educational Insurance Random Events Individual Life Group Life PCHV

Unearned Premium Provision

Unearned Premium Provision Retrocession

Unearned Premium Provision Risks In Force But Not Issued

1,994,888,655

88,812,499

30,540

32,439,986

Premium Insufficiency Provision

Values in R$

Losses Payable Provision

Incurred But Not Reported

Incurred But Not Enough Reported

Administrative Complementary Expenses Premiums Provision Provision

Benefits Payable Provision

Benefits Paid Provision

Total Provision Dec 2010

3,893,132

201,966,559

253,141,896

8,326,357

36,977,788

456,062

2,588,462,948

43,206

16,001,015

5,525,887

567,074

212,874

22,380,596

4,092,222

44,277,047

33,563,374

3,498,929

6,071,316

98,824

124,041,758

Others

7,533,767

6,456,026

2,331,917

409,760

16,731,470

863,001,047

-52

75,845,454

785,468,618

2,529,531,791

1,241,323,819

57,397,986

128,824,638

54,107,759

268,443,382

6,003,944,442

34,503

17,599

197,813

3,738

253,653

4,133,526

1,210,946

2,874,776

6,078,743

707,479

1,032,954

16,038,424

Personal Accident – Individual

122,283,859

7,345,110

10,608

110,273,741

62,024,119

11,323,412

4,196,891

2,100

317,459,841

Personal Accident – Collective

421,993,308

75,575,667

1,192,947

327,850,969

179,687,958

20,220,253

35,775,692

26,119,402

1,088,416,196

3,438,805,424

-52

252,925,105

790,565,365

3,240,327,264

1,787,999,635

102,041,490

215,427,808

81,193,908

268,443,382

10,177,729,328

Tourism

Total

Source: SUSEP

Provisions by Branches - 2010

Credit Life Insurance

25.43%

Educational Insurance Personal Accident – Individual

0.22% 3.12%

58.99% 10.69%

Personal Accident – Collective Random Events

0,16% Individual Life Group Life

0,16% Tourism

1.22%

123

Chapter VI

FenaSaĂşde The Supplementary Health Segment 125

A Year of Important Achievements The supplementary health market closed the year of 2010 with important achievements, even walking the path of consolidation initiated in 1998, when was published the Law no. 9.656, a regulatory milestone of healthcare private plans and insurances. From the perspective of the demand for private plans and insurances, the year of 2010 began with moderate growth – as show the data from the National Agency of Supplementary Health (ANS) –, still considering, in Brazil, the repercussions of the international crisis. However, from the second quarter, the data enable to see that the supplementary health market answered more than proportionally to the positive cycle of the economics. The pro-cyclical answer of the private health sector is focused on the business segments. The large number of plans contracted by companies of all the sizes still reveals that the health and dental benefits remain in the list of benefits for the employees. The retention of workmanship and reduction of absenteeism are current concerns for the Brazilian companies. Relating to the supplementary health market organization, the year of 2010 witnessed many interventions by ANS in small and mid size operators, as result from restrictions of the solvency rules. Similarly, the period was market by new mergers and incorporations, proving that the sector remains seeking its suitable scale. As regards medical services, in 2010 were introduced several projects for extending the services network, mainly those related to hospitals and diagnosis services. Several operators have been also extending their association with such services, whether directly or upon corporate agreements. Pursuant to the governmental regulation, were published a series of standards, specially with respect to (I) standardization and computerization of data exchange between operators and services providers (Supplementary Health Information Exchange (TISS) and Unified Terminology for Supplementary Health (TUSS) projects); (II) updating of the list of procedures for mandatory coverage; (III) annualization of the balance readjustments for the monthly payment of collective contracts; and (V) regulation of the collective adhesion contracts, related to associative and trade union bindings. The year of 2010 watched a change in the ANS management. The new CEO launched the debate on the regulatory agenda for 2011, composed by 10 measures that could hardly affect the structure and performance of the supplementary health market, including the financing for the elders. In order to meet their Associated needs and to keep a proactive position before all these challenges, FenaSaúde sought to mobilize permanently its executive board to contribute with effective proposals for the regulation improvement. The reports on contributions by FenaSaúde committees, following qualified, show the nature, the purposes and the results of the Federation.

Marcio Serôa de Araujo Coriolano President of FenaSaúde

126

Executive Board of FenaSaúde - 2010/2012 President Marcio Serôa de Araujo Coriolano

Bradesco Saúde S.A.

Vice Presidents Edson de Godoy Bueno

Grupo Amil

Gabriel Portella Fagundes Filho

Grupo Sul América

Paulo Sérgio Barros Barbanti

Grupo Intermédica

Officers André do Amaral Coutinho

Omint Serviços de Saúde Ltda

Andre Luiz Fernandes

Tempo Saúde Seguradora S.A.

Eduardo Ribeiro do Vale Vidigal

Marítima Saúde Seguros S.A.

João Carlos Gonçalves Regado

Golden Cross Assistência Internacional de Saúde

Saulo Ribeiro Lacerda

Unimed Seguros S.A.

Newton José Eugênio Pizzotti

Porto Seguro - Seguro Saúde S.A.

Max Thiermann

Allianz Saúde S.A.

Executive Officer Solange Beatriz Palheiro Mendes (up to September) José Cechin (from October)

Insurance Companies Specialized in Health With the approval of the Law no. 9.656/1998, which regulated the supplementary health sector in Brazil and also created the Council on Supplementary Health (CONSU), and the Law no. 9.961/2000, which created the ANS, it was necessary to match the operations of health insurance to the private health care plans, in order to adjust such operations to the legal requirements. The Law no. 10.185, dated February 12th, 2001, regulated the health insurance as private health care plan, and the insurance company specialized in health as health care plan operator for the purpose of the Law no. 9.656/1998. To the insurance companies, which in 2001 had already operated the health insurance, it was established that they would provide the specialization no later than July 1st, 2001, when they would be regulated by CONSU and ANS. With the advent of the Collegiate Executive Board Resolution (RDC) no. 65/2001, ANS

regulated this 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, whose matters have not been regulated by ANS and CONSU. In 2009, the RDC no. 65/2001 was revoked marking the end of the SUSEP regulation that still included the specialized insurance companies.

FenaSaúde and the Representation of Associated Institutions With principal business office in Rio de Janeiro, the National Federation of Supplementary Health (FenaSaúde) is the higher body of institutional representation for the segment of companies acting in the supplementary health sector, supporting as much the specialized insurance companies as the operators of further modalities of plans and that are subjected to the ANS regulation, special autarchy bound to the Ministry of Health. In this respect,

127

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 operators - 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 on Supplementary Health, advisory body of ANS, the National Council on Health, body of social

128

control; the various technical chambers of the Brazilian Medical Association (AMB); the National Accreditation Organization (ONA) and the Brazilian Accreditation Consortium (CBA), associated with the Joint Commission International, which promote accreditation in the health provider network. The Federation congregates 15 business groups within the national scope, in charge of the care for 19 million of beneficiaries, the equivalent to 33% of the supplementary health market in Brazil. The following table presents the list of 27 associated with FenaSaúde, by economic group and operation modality:

Associated

Modality

Allianz Saúde S.A. Care Plus Medicina Assistencial Ltda. Golden Cross Assistência Internacional de Saúde Ltda. Itauseg Saúde S.A. Marítima Saúde Seguros S.A. Metlife Planos Odontológicos Ltda. Odontoprev S.A. Omint Serviços de Saúde Ltda. Porto Seguro - Seguro Saúde S.A. Unimed Seguros Saúde S.A. Amil Grupo Amico Saúde Ltda. Amil Assistência Médica Internacional Amil Planos por Administração Ltda. Excelsior Med Ltda. Medial Saúde S.A. Bradesco Grupo Bradesco Saúde S.A. Mediservice Administradora de Planos de Saúde Intermédica Grupo Intermedica Sistema de Saúde S.A. Interodonto - Sistema de Saúde Odontológica Notre Dame Seguradora S.A. Sul América Grupo Brasilsaúde Companhia de Seguros Sul America Companhia de Seguro Saúde Sul América Seguro Saúde S.A. Sul América Serviços de Saúde S.A. Tempo Grupo Tempo Saúde Seguradora S.A. Gama Saúde Ltda.

Seguradora Especializada em Saúde Medicina de Grupo Medicina de Grupo Seguradora Especializada em Saúde Seguradora Especializada emSaúde Odontologia de Grupo Odontologia de Grupo Medicina de Grupo Seguradora EspecIalizada em Saúde Seguradora Especializada em Saúde Medicina de Grupo Medicina de Grupo Medicina de Grupo Medicina de Grupo Medicina de Grupo Seguradora Especializada em Saúde Medicina de Grupo Medicina de Grupo Odontologia de Grupo Seguradora Especializada em Saúde Seguradora Especializada em Saúde Seguradora Especializada em Saúde Seguradora Especializada em Saúde Medicina de Grupo Seguradora Especializada em Saúde Medicina de Grupo

FenaSaúde and the Market Regulation The year of 2010 possibly will be marked by the changes in the Collegiate Executive Board of ANS with the management of the president Mauricio Ceschin that, in shortterm, were translated into creation of several technical chambers and working groups to study changes in the regulation of the sector that required a very close monitoring regime by the Federation; and, in mid-term, into new regulatory approach. In 2010, FenaSaúde counted on the support of advisory with expertise in strategic actions of communication with society. In 2010, some changes also happened internally in FenaSaúde. The executive officer, Solange Beatriz Palheiro Mendes, who was at the head of the Federation since its constitution, in 2007, assumed the executive board of CNSeg from October. In this date, took office the new executive officer, José Ceschin, bringing to the Federation expertise of four years in charge of the Institute of Supplementary Health Studies (IESS). During 2010, amongst the several technical chambers addressed to approach themes of greater relevance for the sector, it may be highlighted the new methodology of prices readjustment, the regulation of the Articles 30 and 31 of the Law no. 9.656/1998, the extent of the portability rules for waiting periods and the definition of collateral. Under the coordination of the Executive Board of Sectorial Development, are also active in the ANS three technical groups constituted with the purpose to discuss the Standards for Hospitals Remuneration; the Medical Fees; and the Service Providers Qualification. At the same time, were initiated the works of the Technical Group on the List of Procedures, under the coordination of the Executive Board of Products Standards and Qualification, to begin the review of the list that will be in force in 2012. FenaSaúde attends actively all the representations, committees, technical chambers and working groups

The Technical Chambers of ANS are being monitored by the Health, Legal and Accounting Technical Committees of this Federation, in joint or separate meetings, according to the approaches of the themes. If required, to support the debates, we counted on the co-operation of external advisors for technical opinions and studies. To monitor such activities within the scope of FenaSaúde were constituted two working groups: WG on Standards for Remuneration and WG on Medical Fees. In the Technical Chamber on New Methodology of Prices Readjustment, the Federation presented as suggestion a new standard predicting the division between the managerial costs – to which would be applied the price-cap standard – and the non managerial costs – for which it is suggested the transfer of the costs assessed. The option by ANS was to constitute a new group to deep the standard, from efficiency criteria. In the Technical Chamber on Portability, the proposal of the Agency, subsequently confirmed in public consultation and waiting for the regulation, aimed at achieving the collective adhesion plans, extending the geographic scope and, in cases of extrajudicial liquidation of operators, instituting the special portability. In the Technical Chamber on Articles 30 and 31, the proposal of the Agency was the division of the plans for active and inactive people. A kind of change that would imply to establish a pool of separate risks in addition to contract plans for inactive people by association or trade union. The matter was not still subjected to Public Consultation and is waiting for regulation. In the Working Group on Hospitals Remuneration, FenaSaúde developed studies to extend the possibilities of per package payments, in return to the fee-for-service standard. As regards the Working Group on Medical Fees, ANS decided to meet the entities individually.

129

The Working Group on List of Procedures initiated the works reviewing the text of the Normative Resolution no. 211/2010, with estimated period for 2012. During the last years FenaSaúde always participated actively of the discussions on the list, since such regulatory instrument defines the minimum required coverage for the health plans from its publication and period, and ANS is committed to the biannual updating. The Unified Terminology for Supplementary Health (TUSS) created the need to establish single terms and codes for the sector and is demanding great work by the institutional representatives in ANS. FenaSaúde, by means of its WG on TUSS carried out compatibility studies for the Procedures Terminology and sent a list of procedures that does not match to the TUSS. The same was performed by the Odontological WG. The year of 2010 also sustained deep changes in the solvency rules of the sector. ANS promoted the delay of time to adjust the solvency margin of the Insurance Companies Specialized in Health and of further operators. This year was market by the end of the Operational Reliance, the Risk Provision and the Unearned Premiums Provision (PPNG). In return, became mandatory the constitution of the events/loss payable provision, that before was mandatory only for the Insurance Companies Specialized in Health, being voluntary the binding of collateral for events occurred in less than 30 days. The collateral for risks provision became to cover the IBNR provision, and may also guarantee the events/ loss payable provision. FenaSaúde participates mindfully of the process for hospital accreditation since it takes part in the National Accreditation Organization (ONA) and in the Brazilian Accreditation Consortium (CBA). A project to promote the Operators Accreditation, developed by ANS, was in discussion by Public Consultation of the Agency on December 2010. Other subject matters also deserved the systematic monitoring by FenaSaúde, as the Precedent 13, that amends the rules

130

for the contracts remission, the research on the average time for service that should be regulated in 2011, and the several opinion polls on health plans performed in Brazil. Regarding to 2011, in addition to the developments expected by the regulation in progress, the expectancy is of hard work by the Federation in seeking balanced and efficient solutions for the sector, before the regulatory agenda already divulged by ANS, that includes: 1) Financing standard of the sector

• Seek alternatives of readjustment standards

for new individual plans (Technical Chamber in progress); • Study the possibility to format health plans products with mixed alternatives of mutualism and capitalization; • Analyze New Actuarial Technical Note of products and Intergerational Agreement (six times between the lower and higher age group). 2) Guarantee of care access and quality

• Determine maximum times of service

• •

•

between the authorization given by the operator for examinations and procedures and their effective attainment; Define criteria to analyze the network sufficiency; Carry out the review of the Supplementary Health Performance Index (IDSS) of the operators qualification program, mainly in respect of satisfaction of the beneficiary; Introduce the accreditation program for the health plans operators and the qualification program for the services providers that compose the supplementary health market; Reappraise the criteria of regulation forms established by the CONSU Resolution no. 8.

3) Standard for Payment to providers

• Stimulate the adoption, by the sector, of single code for the medical procedures;

• Promote sectorial agreement to define /

create stimulus and inductor ways for the new systematical for hospitals remuneration, as previously agreed (Working Group in progress).

4) Pharmaceutical Care

• Study alternatives to offer pharmaceutical

and outpatient care for the beneficiaries of the supplementary health sector that present higher prevalence chronicle pathologies, as a way to reduce the sub-treatment.

5) Stimulus to competition

• Deep the relationship with the Brazilian

System of Competition Defense (SDE) of the Ministry of Justice, the Secretariat for Economic Monitoring (SEAE) of the Ministry of Finance, and the Administrative Council for Economic Defense (CADE) in order to indentify the focused markets, aiming at adjusting the regulation to specific needs; • Deep the study to analyze the competition level in viable markets; • Progress in the mobility standard with portability for waiting periods (it will be sent to public consultation); • Create ways to stimulate the commercialization of individual plans. 6) Guarantee of access to information

• Reformulate the ANS portal, making it more

•

• • •

interactive, seeking to ease the access to information by the several publics, focused mainly in the consumer (in progress); Organize the comparative information between operators and providers to increase the comprehension and choice ability by the consumer; Divulge the precedents of the ANS understanding; Promote the updating of the supplementary health law (in progress in the Committee on Law Updating); Systemize the updating criteria for the list of medical procedures.

7) Old contracts

• Encourage the adjustment/migration of the individual/collective contracts (in progress).

8) Elder care

• Study successful experiences as regards elder care, seeking to format products specific to the third age;

• Create indicators on elder care, as

regards health care of the program for supplementary health qualification; • Stimulate the creation, by the operators, of incentives to the third age beneficiaries who take part in programs to monitor their health (WG in progress); • Motivate the commercialization of heath plans for the third age. 9) Integration between Supplementary Health and SUS

• Introduce the univocal identification of the

beneficiary for the supplementary health and develop digital medical records; • Propose the discussion on the standard of national health system: what should be supplementary, complementary or substitutive.

Technical Committees and Working Groups The Permanent Committees of FenaSaúde are those liable for appraising matters of interest by the supplementary health sector, analyzing, discussing and holding a position on subject matters pursuant to the market, on which they draw up opinions, working plans or operation standards aiming at solving issues, procedures unification, recommendations and operation strategies. The Permanent Committees are separated 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, in the duty of coordinator, and two representatives of each affiliated company. They may also count on the attendance of guests, practitioners with notorious knowledge and expertise in their acting field. In addition to Permanent Committees, FenaSaúde also counts on the support of eight working groups, namely: Accounting,

131

Odontological, List of Procedures, Unified Terminology for Supplementary Health (TUSS), Remuneration, Medical Fees, Reimbursement to the Single Health System (SUS), Network, and Orthesis, Prothesis and Special Materials (OPME), all of them bound to Technical Committee on Health (CTEC). The duties of the Committees are to advise the Executive Board of FenaSaúde and to study matters related to the operations of the supplementary health sector, proposing and conducting initiatives, strategies, subject matters and technical works they deem appropriate to the interests of the market.

Permanent Committees of FenaSaúde During 2010, the Permanent Committees of FenaSaúde were chaired by the executive officer, Solange Beatriz Palheiro Mendes, up to September, and by the current executive officer, José Cechin, from October.

Technical Committee on Health (CTEC)

In the CETI, coordinated by the manager of Health Regulation, Vera Sampaio (FenaSaúde), were promoted a series of studies aiming at preventing the bad practices and identifying the needs for developing guidelines for the use of orthesis, prothesis and special materials (OPME) and other polemic subject matters.

Working Groups of FenaSaúde Accounting Working Group The Accounting WG, coordinated by Roberto Chamberlain (Bradesco Saúde), worked on the adequacy of the adjustment term for the solvency margin of the insurance companies specialized and the further operators and dealt with themes studied in the Technical Chamber on Collateral of the ANS, in the Normative Instruction no. 985, Secretariat of Federal Revenue – Statement of Medical and Health Services (DMED); in the Services Tax (ISS) Retention in Rio de Janeiro, in the Accounting of the reimbursement to SUS, amongst other themes.

Coordinated by the technical manager Sandro Leal Alves (FenaSaúde), it dealt with the ANS proposals for reformulating the readjustment model of individual plans, to the economic, financial and actuarial impacts from the proposal of plans segregation for active and inactive people, to the impacts from the extension of portability rules and the ANVISA request to fulfill the list of materials price.

Odontological Working Group

Committee on Legal Affairs (CJUR)

Working Group on TUSS

The themes discussed in the CJUR were the legal appraisal of the changes proposed for the Articles 30 and 31 of the Law no. 9.656/1998, legal appraisal on the Precedent 13 of the ANS that amends the understanding on the remission, impacts from the proposal of contracts migration and adjustment, the Normative Instruction no. 28/2010 regarding the reimbursement in locations without provider network, and also the regular monitoring of the bills.

132

Ethics Committee (CETI)

The Odontological WG, coordinated by Josias da Costa (ODONTOPREVI), worked on the development of the list of procedures to be included in the TUSS, in the odontological sector. Were also discussed the impacts from the list of procedures and the readjustment methodology for individual plans.

Under coordination of the manager of Health Regulation, Vera Sampaio, were discussed matters that made difficult the terminology introduction, such as: procedures of the list not provided for the TUSS; the lack of others, that although were not of mandatory coverage, were covered by some of the associated; amongst other matters. The last work carried out by the group was the analysis of procedures that will compose the TUSS for daily expenses, rates and bandages, whose publication by ANS is expected for 2011.

Working Group on Standard for Hospitals Remuneration Coordinated by Franklin Padrão Junior (Golden Cross), the WG was constituted on January 2010. The purpose of the meetings was to discuss matters regarding the current standard for hospitals remuneration, seeking alternatives to quantify and to value the health services, aiming at reforming the current standard. FenaSaúde, represented by Manoel Antonio Peres (Bradesco Saúde) and Franklin Padrão Junior (Golden Cross), monitored and attended all meetings held by the technical groups of ANS, where it proposed premises for the opened and closed hospital accounts, and analyzed the several proposals presented by the entities that represent the hospitals. The group ends 2010 appraising the proposals of prices migration methodology, transferring to the next year those as regards readjustments.

Working Group on Medical Fees Coordinated by Franklin Padrão Junior (Golden Cross), the WG had as purpose to discuss matters relating to the standards of current medical fees, seeking alternatives to quantify and to value the health services, aiming at reforming the current standard. FenaSaúde, represented by Manoel Antonio Peres (Bradesco Saúde) and Franklin Padrão Junior (Golden Cross), monitored and discussed the matters with technical groups of the ANS, presenting suggestions to hierarchize the TUSS.

Further Attendances in Chambers, Commissions, Councils, Committees and Working Groups National Council on Health (CNS) - Ministry of Health Goal: formulate strategies, control and hold a position on the enforcement of the national health policy, decide on state health plans, disagreements raised by the State and Local Councils on Health; establish guidelines to be taken into consideration when drawing up health plans, monitor and control the activities of private health institutions and the process of scientific and technological development and inclusion within the sector. Holder: Solange Beatriz Palheiro Mendes (FenaSaúde) up to September and José Cechin from October 1st Deputy: Sérgio Vieira (Abramge) 2nd Deputy: Maria Beatriz Coaci Silvasa (Unidas)

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

Working Group on Reimbursement to SUS

National Accreditation Organization (ONA)

Coordinated by Reinaldo Sheibe (Amil) the WG was constituted in 2010 to discuss legal and technical matters as regards reimbursement to SUS, such as, the difficulties to introduce the Electronic Reimbursement System to SUS (SISREL) of the ANS, whose use is mandatory since 2009; the values practiced by the National Unified Equivalence Procedure Table (TUNEP); and the lawsuits for charging reimbursement.

Goal: promote the process of accreditation in order to improve the quality of health care, the productivity of hospitals, outpatient departments, specialized and further clinics, and monitor the impact from the service costs on public and private budgets. Holder: Solange Beatriz Palheiro Mendes (FenaSaúde) up to September and José Cechin from October Deputy: Sandro Leal Alves (FenaSaúde)

133

Brazilian Accreditation Consortium (CBA) / Joint Commission International CBA is the sole representative of the Joint Commission International in Brazil, in charge of the methodology of the International Accreditation on Health System and Services. Holder: Solange Beatriz Palheiro Mendes (FenaSaúde) up to September and José Cechin from October Deputy: Sandro Leal Alves (FenaSaúde)

Chamber of Supplementary Health (CSS) Advisory Body of ANS Holder: Marcio Serôa de Araujo Coriolano (Bradesco Saúde) Deputy: Marco Antônio Antunes da Silva (Sul América)

Committee on Standardization of the Supplementary Health Information Exchange (COPISS – TISS) Goal: promote 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 (Bradesco Saúde) Deputy: Maurício Mustaro (Sul América)

Committee on Standardization of Supplementary Health Information Exchange (COPISS – TISS – Dentistry) Goal: promote development and improvement of the TISS standard and the electronic information exchange among odontological plans operators, odontological service providers and ANS.

134

Holder: Josias Paulino da Costa (Bradesco Dental)

Business Council of Medicine and Health of the Rio de Janeiro Trade Association Goal: propose actions of qualification and sustainability of the health care network in the City of Rio de Janeiro. Holder: Solange Beatriz Palheiro Mendes (FenaSaúde) up to September and José Cechin from October

Management Council of the Central of Services and Protection to Insurance of CNSeg Holder: Marco Antunes (Sul América) Deputy: Antônio Jorge Kropf (Amil)

Technical Chambers of the Brazilian Medical Association (AMB) Chamber on Brazilian Hierarchical Classification of Medical Procedures (CBHPM) Holder: Márcio Serôa de Araújo Coriolano (Bradesco Saúde) Deputy: Maurício Mustaro (Sul América) Chamber on Appraisal of New Technologies Holder: Regina Melo (Sul América) Deputy: Sheyla Regina de Lacerda Rodrigues (Bradesco Saúde) Chamber on Implants Holder: Maurício Mustaro (Sul América) Chamber on Clinic Guidelines Holder: Regina Mello (Sul América) Deputy: Maurício Mustaro (Sul América)

Technical Chambers of the National Agency of Supplementary Health (ANS)

Working Groups of the National Agency of Supplementary Health (ANS)

Chamber on New Methodology of Prices Readjustment Holder: Maurício Lopes (Allianz Saúde) Deputy: Cristiana Vidigal (Bradesco Saúde)

Group on Standard for Hospitals Remuneration Holder: Franklin Padrão Junior (Golden Cross) Deputy: Manoel Antonio Peres (Bradesco Saúde)

Chamber on Collateral Holder: Haydewaldo Roberto Chamberlain (Bradesco Saúde) Deputy: Luiz Henrique M. Azambuja (Intermédica)

Group on Medical Fees Holder: Franklin Padrão Junior (Golden Cross) Deputy: Manoel Antonio Peres (Bradesco Saúde)

Chamber on Portability Holder: Mônica Moyses Nigri (Golden Cross) Deputy: Cristiane Rose Jourdan (Amil) Chamber on Regulation of the Articles 30 and 31 Holder: Luiz Celso Dias Lopes (Sul América) Deputy: Flávio Bitter (Bradesco Saúde)

Group on Qualification of the Services Providers in Health Holter: Sérgio Azouri Galvão (Bradesco Saúde) Deputy: Roberto Galfi (Sul América) Group on List of Procedures Holder: Manoel Antonio Peres (Bradesco Saúde) Deputy: Mauricio Mustaro (Sul América) Working Group on Deeping of Readjustment Standard Holder: Sandro Leal Alves (FenaSaúde)

135

Statistics from the Market Penetration of the Sector

Values in R$ million

Year

Income

GDP Participation

GDP

2002

25,702

1.74%

1,477,822

2003

28,530

1.68%

1,699,948

2004

32,238

1.66%

1,941,498

2005

37,306

1.74%

2,147,239

2006

42,622

1.80%

2,369,484

2007

52,197

1.96%

2,661,344

2008

60,618

2.00%

3,031,864

2009

65,591

2.06%

3,185,125

2010

72,690

1.98%

3,674,964

Sources: (1) Information Book of the Supplementary Health - ANS â&#x20AC;&#x201C; March 2011; (2) IPEA site: www.ipeadata.org.br â&#x20AC;&#x201C; Accessed on March 22nd, 2011).

Notes: (1) The operators of Self-Management modality, except by Human Resources and Secretariat of Complementary Pension are informing their revenues, mandatorily, from 2007; (2) As regards operators that did not report DIOPS in the 4th quarter, except by Human Resources and Secretariat of Complementary Pension (corresponding to 1.8% of the benefits) were repeated the data reported in the 3rd quarter (0.4% of the beneficiaries).

136

1.74%

1.68%

2002

2003

1.66%

1.74%

1.80%

2004

2005

2006

1.96%

2.00%

2.06%

1.98%

2007

2008

2009

2010

Income from Supplementary Health Market Operators - by Modality (2003/2010) Operator Modality Self-Management

2003

2004

2005

Values in R$ million

2006

2007

2008

2009

2010

Variation 2003/2010

Variation 2009/2010

539

666

936

1,070

6,473

7,014

7,581

8,324

1444.31%

9.81%

Medical Cooperative

10,752

12,326

14,097

16,505

18,270

21,366

23,241

25,856

140.46%

11.25%

Philanthropy

874

877

1,085

1,239

1,929

2,208

1,507

1,678

91.97%

11.38%

Group Medicine

9,377

10,636

12,534

14,148

15,833

17,800

19,521

21,261

126.72%

8.91%

Insurance Company Specialized in Health

6,701

7,523

7,912

8,750

8,608

11,054

12,404

13,979

108.61%

12.70%

Odontological Cooperative

182

212

247

278

323

361

402

432

136.76%

7.35%

Group Dentistry

318

387

495

632

760

815

937

1,161

264.95%

23.95%

28,745

32,627

37,306

42,622

52,197

60,618

65,591

72,690

152.88%

10.82%

Total

Source: Information Book of the Supplementary Health - ANS – March 2011;

Notes:

Regarding to the companies that did not report the statements in the 4th quarter of 2010 were repeated the data informed in the 3rd quarter. Subsequent feedings in the ANS system (DIOPS) should modify such values. The difference between the Income of the Information Book and the Income of the Accounting Statements is due to the following: 1) Cut-off dates of the information published, and 2) Nature of the information published: the incomes from payments published in the Book correspond to the sum of the accounts “31_EFFECTIVE PAYMENTS/PREMIUMS…” and “321_(-) DIRECT TAXES FROM OPERATIONS…”.

When considering a longer term, it is clear the growth potential of the sector. The self-management segment deserves the note that it was not required to send the financial statements to ANS, therefore, the variation in the period is not real. In 2010, it was possible

for some sectors to increase their income more than others, despite of the economic crisis. However, in the supplementary health the data on income provide poor information if presented without their corresponding costs.

Care Expense from the Supplementary Health Market Operators – by Modality (2003/2010) Operator Modality Self-Management

2003

2004

2005

2006

2007

2008

2009

Values in R$ million

2010

Variation 2003/2010

Variation 2009/2010

458

603

821

889

5,672

6,433

7,159

7,421

1520.60%

3.66%

Medical Cooperative

8,972

10,176

11,490

13,332

14,544

17,368

19,144

20,756

131.34%

8.42%

Philanthropy

642

692

822

957

1,033

1,170

1,246

1,333

107.79%

6.99%

Group Medicine

7,116

8,014

9,512

10,738

12,217

13,805

15,437

16,781

135.81%

8.71%

Insurance Company Specialized in Health

5,780

6,562

7,120

7,347

7,722

9,007

10,373

11,358

96.52%

9.50%

Odontological Cooperative

128

141

166

179

235

256

267

109.41%

4.21%

Group Dentistry

143

164

204

250

311

328

392

465

226.16%

18.51%

23,238

26,352

30,135

33,693

41,708

48,345

54,008

58,382

151.24%

8.10%

Total

209

Source: Information Book of the Supplementary Health - ANS – March 2011;

Notes: Regarding to the companies that did not report the statements in the 4th quarter of 2010 were repeated the data informed in the 3rd quarter. Subsequent feedings in the ANS system (DIOPS) should modify such values. The difference between the Care Income of the Information Book and the Care Income of the Accounting Statements is due to the cut-off dates of the information published.

137

Beneficiaries of Health Plans - by Operator Modality (2003/2010) Accounting Period

Medical Cooperative

Odontological Cooperative

Philanthropy

Group Medicine

Group Dentistry

Insurance Company Specialized in Health

5,107,394

9,291,912

1,207,812

1,011,413

12,172,460

2,553,057

4,869,570

5,192,821

14,091,378

2,067,002

1,375,645

16,391,000

6,256,345

6,039,697

54,960,731

5,189,161

15,057,712

2,301,018

1,406,334

17,154,627

8,523,728

5,328,151

60,145,191

5,366,571

16,623,470

2,356,434

1,614,850

18,376,271

10,061,169

5,746,426

Total

SelfManagement

Dec 2003

36,218,571

Dec 2008

51,413,888

Dec 2009 Dec 2010

Source: Tabnet ANS – www.ans.gov.br – Collected on March 24 , 2011. th

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

When measuring by beneficiaries, the growing of the supplementary health market sounds meaningful. From 2003 to 2010, the sector grew about 60% expanding its coverage to 57 million of beneficiaries, representing around 29% of the Brazilian population. However, the

databases from ANS were under-reported and, with the regulation improvement, they are becoming more consistent. But the group dentistry segment, excluded the statistical effect, actually led the market in respect of increase of beneficiaries.

Age Profile of the Health Plans Beneficiaries versus Brazilian Population (2005/2010) 2005 Age-Group

Beneficiaries of Individual Plans

Beneficiaries of Collective Plans

2010 Total of Beneficiaries

Brazilian Population

No.

(%)

No.

(%)

No.

(%)

From 0 to 9 years old

1,618,331

17.05

3,933,346

13.67

5,874,124

14.16

From 10 to 19 years old

1,135,653

11.97

4,093,106

14.23

5,722,106

From 20 to 29 years old

1,553,947

16.37

6,335,823

22.03

From 30 to 39 years old

1,388,978

14.64

5,437,828

From 40 to 49 years old

1,289,460

13.59

From 50 to 59 years old

1,090,226

From 60 to 79 years old

Beneficiaries of Individual Plans

Beneficiaries of Collective Plans

Total of Beneficiaries

Brazilian Population

No.

(%)

No.

(%)

No.

(%)

19.44

1,886,121

15.89

5,628,094

12.27

7,697,486

12.80

15.09

13.80

20.79

1,498,813

12.63

5,981,063

13.04

7,824,032

13.01

17.93

8,358,958

20.16

17.72

1,964,358

16.55

10,244,172

22.33

12,560,447

20.88

17.98

18.91

7,312,602

17.63

14.93

1,861,087

15.68

9,620,609

20.97

11,821,088

19.65

15.50

4,267,804

14.84

6,088,993

14.68

11.34

1,510,176

12.72

6,716,920

14.64

8,592,104

14.29

13.02

11.49

2,480,994

8.63

3,974,478

9.58

7.32

1,291,508

10.88

4,311,801

9.40

5,941,971

9.88

9.66

729,775

7.69

1,181,181

4.11

2,171,800

5.24

4.77

912,659

7.69

1,906,545

4.16

3,044,832

5.06

5.96

From 70 to 79 years old

472,065

4.97

693,430

2.41

1,331,452

3.21

2.63

605,217

5.10

957,644

2.09

1,712,893

2.85

3.32

80 years old and above

206,063

2.17

309,887

1.08

597,884

1.44

1.06

338,284

2.85

503,253

1.10

931,678

1.55

5,351

0.06

30,086

0.10

38,840

0.09

0.00

2,274

0.02

14,338

0.03

18,660

0.03

0.00

100.00 28,763,485 100.00

41,471,237

100.00

11,870,497

100.00

45,884,439

100.00

60,145,191

100.00

Inconsistent Age Total

9,489,849

Source: Beneficiaries: Information System ANS Tabnet – Collected on March 24 , 2011; 2005 Population: Datasus/IBGE – Collected on December 13th, 2010; 2010 Population: IBGE CENSO – 2010 – http://www.ibge.gov.br/censo2010/piramide_etaria/index.php - Collected on December 10th, 2010. th

We following present economic-financial and care information from the operators associated with FenaSaúde, comparing to the total market, if applicable.

138

Statistics from the Operators Associated with FenaSaúde Beneﬁciaries, Incomes and Outcomes of the Associated (2010) 2010 Associated Allianz Saúde S.A. Care Plus Medicina Assistencial Ltda. Golden Cross Assistência Internacional de Saúde Itauseg Saúde S.A. Marítima Saúde Seguros S.A.* Metlife Planos Odontológicos Ltda.* Omint Serviços de Saúde Ltda. Porto Seguro - Seguro Saúde S.A. Unimed Seguros Saúde S.A. Amil Grupo Amico Saúde Ltda. Amil Assistência Médica Internacional Amil Planos por Administração Ltda. Excelsior Med Ltda. Medial Saúde S.A. Bradesco Grupo Bradesco Saúde S.A. Mediservice Administradora de Planos de Saúde Intermédica Grupo Intermedica Sistema de Saúde S.A. Interodonto - Sistema de Saúde Odontológica Notre Dame Seguradora S.A. Odontoprev Grupo Bradesco Dental S.A.** Odontoprev S.A. Sul América Grupo Brasilsaúde Companhia de Seguros Sul America Companhia de Seguro Saúde Sul América Seguro Saúde S.A. Sul América Serviços de Saúde S.A. Tempo Grupo Gama Saúde Ltda.* Tempo Saúde Seguradora S.A. FenaSaúde Supplementary Health Market Market Share

Beneficiaries

Values in R$

Incomes and Outcomes

168,619 46,762

Excluding Dentistry -

558,014

251,614

809,628

1,533,52

1,257,31

16,055 198,881 61,310 428,460 305,729 4,117,745 824,337 1,532,309 72,032 111,502 1,577,565 2,874,687 2,642,096

238,494 29,565 100,179 926,844 58,613 532,570 335,661 17,416 -

16,055 198,881 238,494 90,875 528,639 305,729 5,044,589 882,950 2,064,879 72,032 111,502 1,913,226 2,892,103 2,642,096

100,22 335,52 37,22 564,27 726,52 546,92 7,543,01 1,129,90 4,215,48 73,06 1,930,49 194,09 6,610,07 6,058,90

131,77 254,57 17,30 434,69 511,93 411,08 5,761,76 926,40 3,154,73 63,85 1,475,06 141,72 5,720,76 5,204,03

232,591

17,416

250,007

551,16

516,73

2,238,770 2,102,947

1,130,683 134,688

3,369,453 2,237,635

1,942,53 1,541,33

1,408,01 1,132,87

995,995

127,57

54,90

135,823 1,762,633 81,671

4,394,781 10 4,394,771 215,380 14,129

135,823 4,394,781 10 4,394,771 1,978,013 95,800

273,63 574,58 ,,, 574,58 5,839,90 222,98

220,24 220,39 ,,, 220,39 4,597,81 185,36

258,631

1,490,78

1,211,51

1,093,292 329,039 117,324 80,908 36,416 12,894,989 45,570,031 28.30%

194,155 7,096 7,304,956 14,575,160 50.12%

1,287,447 336,135 117,324 80,908 36,416 20,199,945 60,145,191 33.59%

3,565,68 560,46 595,01 323,85 271,16 27,557,03 73,395,18 37.55%

2,676,35 524,58 435,03 284,71 214,59 21,627,72 58,382,48 37.04%

Medical Care

Total 168,619 46,762

Effective Payments / Earned Premiums 433,56 174,16

Indemnified Net Events/Losses 334,02 131,29

Source: Accounting Statements of the Health Plans Operators. Available at www.ans.gov.br (Information collected on April 2011). Beneﬁciaries: Available at www.ans.gov.br - ANS Tabnet (Data collected on March 2010).

Regarding to the companies that did not send DIOPS in the 4 quarter were repeated the data of the 3 quarter to compose the accumulated in the year of 2010 * From September 2010 Bradesco Dental is included in the Accounting Statements of ODONTOPREV S. A. ** th

Note: The difference between Care Income/Outcome of the Information Book and the Care Income/Outcome of the Accounting Statements is due to the following: 1) Cut-off date of the information published and 2) Nature of the information published: the incomes from payments published in the Book correspond to the sum of the accounts “31_EFFECTIVE PAYMENTS/PREMIUMS…” and “321_(-) DIRECT TAXES FROM OPERATIONS…”.

139

The companies associated with FenaSaúde were responsible for ensuring health care of 19 million of beneficiaries, representing 33% of the supplementary health market. Also in 2010, the

accumulated data up to third quarter show that 37% of the total income of the industry was in respect of the associated, while the care outcomes amounted to 38%.

Income from the Associated - by Modality (2003/2010) Associated - Modality

2007

Values in R$ million

2008

2009

2010

% Variation 2007/2010

% Variation 2009/2010

Insurance Company Specialized in Health

8,679

11,115

12,456

14,026

61.60

12.61

Group Medicine

7,942

10,276

11,676

12,792

61.07

9.56

Group Dentistry

347

410

479

739

113.30

54.44

52,154

58,664

66,045

73,395

40.73

11.13

Supplementary Health Market

Source: Accounting Statements of the Health Plans Operators. Available at www.ans.gov.br (information collected on April 2010).

Note: The difference between the Income of the Information Book and the Income of the Accounting Statements is due to the following: 1) Cut-off dates of the information published and 2) Nature of the information published: the incomes from payments published in the Book correspond to the sum of the accounts “31_EFFECTIVE PAYMENTS/PREMIUMS…” and “321_(-) DIRECT TAXES FROM OPERATIONS…”.

In this table we present the income evolution, where were compared the years of 2008, 2009 and 2010 of the associated with FenaSaúde, by modality. Market Share of Incomes by Modality

Values in R$ million

Associated

Operator Modality

Market Share of FenaSaúde in the Supplementary Health Market

Market

2008

2009

2010

2008

2009

2010

Insurance Company Specialized in Health

11,115

12,456

14,026

11,119

12,466

14,049

Group Medicine

10,276

11,676

12,792

17,432

19,629

Group Dentistry

410

479

739

728

21,801

24,611

27,557

58,664

Total

2008

2009

2010

99.97%

99.92%

99.84%

21,551

58.95%

59.48%

59.36%

948

1,198

56.27%

50.48%

61.69%

66,045

73,395

37.16%

37.26%

37.55%

Fonte: Demonstrações Contábeis das Operadoras de Planos de Saúde. Disponível no site www.ans.gov.br (Informações extraídas em abril de 2010)

140

Care Expense from the Associated with FenaSaúde - by Modality (2008/2010) Associated

Operator Modality 2008

2009

Values in R$ million

Market Share of FenaSaúde in the Supplementary Health Market

Market 2010

2008

2009

2010

2008

2009

2010

Group Medicine

7,802

9,144

10,044

13,206

15,264

16,686

59.08%

59.91%

60.19%

Insurance Company Specialized in Health

9,006

10,362

11,355

9,007

10,373

11,375

99.98%

99.90%

99.83%

159

190

293

292

382

462

54.44%

49.82%

63.31%

16,967

19,697

21,692

46,733

53,757

58,382

36.31%

36.64%

37.15%

Group Dentistry Total

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

Note: The difference between the Care Income of the Information Book and the Care Income of the Accounting Statements is due to the cut-off dates of the information published.

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

% Variation 2008/2010

% Variation 2009/2010

2008

2009

2010

Loss Ratio

77.83%

80.03%

78.72%

1.14%

-1.65%

Administrative Cost

11.07%

10.92%

10.24%

-7.50%

-6.25%

5.02%

5.19%

5.14%

2.45%

-0.86%

Acquisition Cost

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

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

Economic-Financial Performance of the Companies Associated with FenaSaúde in 2010 Accounts

Insurance Companies Specialized in Health

Group Medicine Operators

Values in R$ million

Total

Investments

4,016

1,411

5,449

Technical Provisions

4,657

1,390

6,047

Equity

8,341

3,388

12,468

Applications

8,851

1,818

10,801

Financial Result

1,328

263

1,624

Collateral

4,978

5,770

Short-Term Investments

4,926

5,718

Long-Term Investments

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

Notes: 1 - Investments: Accounting Account (1321_INVESTMENTS); 2 - The technical provisions calculation is given by: (211_Technical Provisions of Health Care Operations Current Liability) + (2311_Technical Provisions of Health Care Operations - Long-Term Liability); 3 - Equity: Accounting Account (25_ Equity); 4 - The Applications calculation is given by: (122_APPLICATIONS - Current Assets) + (1311_APPLICATIONS – Non-Current Assets); 5 – The Financial Result calculation is given by: (3_Income) - [(4_Outcome) + (61_Taxes and Profit Sharing)]; 6 - Collateral: Short-Term Applications: Accounting Account (1221_Applications Bound to Technical Provisions); Long-Term Applications: Accounting Account (13111_Applications Bound to Technical Provisions).

141

Financial Data from the Associated with FenaSaúde in 2010

Values in R$ million

Income

Effective Payments

Allianz Saúde S.A.*

446,18

433,56

334,02

31,45

35,31

328,30

108,90

23,38

Care Plus Medicina Assistencial Ltda.

177,56

174,16

131,29

20,17

15,39

136,00

13,52

6,54

1,556,45

1,533,52

1,470,54

1,257,31

158,04

65,58

1,237,53

309,21

(29,32)

Itauseg Saúde S.A.

254,14

100,22

106,49

131,77

7,98

0,16

133,33

1,769,42

72,19

Marítima Saúde Seguros S.A.*

346,59

335,52

335,65

254,57

41,22

22,21

262,17

91,21

14,92

37,75

37,22

36,15

17,30

13,78

8,52

17,92

20,21

(7,53)

Omint Serviços de Saúde Ltda.

556,28

564,27

543,65

434,69

60,61

15,23

419,93

46,87

29,03

Porto Seguro - Seguro Saúde S.A.

746,36

726,52

715,11

511,93

70,58

67,24

508,56

197,72

49,07

Unimed Seguros Saúde S.A.

564,36

546,92

546,84

411,08

49,49

25,30

438,85

143,46

34,85

Amil Grupo

7,875,25

7,543,01

7,350,25

5,761,76

1,099,68

386,18

6,116,92

2,710,55

192,96

Amico Saúde Ltda.

1,332,69

1,129,90

1,096,23

926,40

152,30

62,64

960,54

389,36

88,29

Amil Assistência Médica Internacional

4,309,07

4,215,48

4,110,98

3,154,73

617,13

224,45

3,444,85

2,016,88

105,48

Amil Planos por Administração Ltda.

71,78

73,06

63,85

3,17

0,04

19,00

14,45

1,94

Excelsior Med Ltda.

1,967,66

1,930,49

1,882,99

1,475,06

284,55

89,02

1,547,30

292,10

1,27

Medial Saúde S.A.

194,06

194,09

187,00

141,72

42,53

10,04

145,21

(2,23)

(4,02)

Bradesco Grupo

7,640,22

6,610,07

6,445,67

5,720,76

412,06

285,04

5,676,32

3,179,88

585,14

Bradesco Saúde S.A.

7,082,05

6,058,90

5,923,52

5,204,03

393,15

285,03

5,182,12

3,091,40

578,21

558,17

551,16

522,14

516,73

18,91

0,02

494,20

88,48

6,93

Intermédica Grupo

2,003,18

1,942,53

1,920,88

1,408,01

294,57

83,90

1,465,65

253,17

81,36

Intermedica Sistema de Saúde S.A.

1,590,21

1,541,33

1,519,19

1,132,87

245,90

62,61

1,180,20

145,44

42,81

Interodonto - Sistema de Saúde Odontológica

125,86

127,57

128,25

54,90

24,46

2,63

57,89

21,34

28,45

Notre Dame Seguradora S.A.

287,11

273,63

273,44

220,24

24,21

18,66

227,56

86,38

10,09

Odontoprev Grupo

598,62

574,58

558,07

220,39

126,02

55,89

222,82

718,37

4,07

,,,

Associated

Golden Cross Assistência Internacional de Saúde Ltda.

Metlife Planos Odontológicos Ltda.*

Mediservice Administradora de Planos de Saúde

Bradesco Dental S.A.** Odontoprev S.A.

Net Payments

Events Subject to Indemnity

Administrative Expenses

Acquisition Costs

Known Events

Equity

Net Profit

598,62

574,58

558,07

220,39

126,02

55,89

222,82

718,37

4,07

6,422,59

5,839,90

5,722,07

4,597,81

386,38

340,49

4,543,74

3,051,04

578,88

229,78

222,98

222,13

185,36

13,29

17,24

181,59

76,28

(1,42)

Sul America Companhia de Seguro Saúde

1,928,21

1,490,78

1,427,18

1,211,51

94,99

13,97

1,210,88

1,882,94

364,79

Sul América Seguro Saúde S.A.

Sul América Grupo Brasilsaude Companhia de Seguros

3,694,21

3,565,68

3,545,99

2,676,35

257,62

309,28

2,626,69

1,017,87

201,35

Sul América Serviços de Saúde S.A.

570,39

560,46

526,77

524,58

20,48

0,00

524,58

73,94

14,16

Tempo Grupo

611,72

595,01

565,55

499,30

26,82

23,32

514,85

129,88

37,47

Tempo Saúde Seguradora S.A.

287,88

271,16

271,11

214,59

19,14

20,03

216,14

75,12

18,90

Gama Saude Ltda.*

323,84

323,85

294,44

284,71

7,68

3,29

54,76

18,57

298,71

Source: Financial Statements of the Health Plans Operators. Available at www.ans.gov.br (data collected on April 2011).

to the companies that did not send DIOPS in the 4 quarter were repeated the data of the 3 quarter to compose the accumulated in the year of 2010. * From Regarding September 2010 Bradesco Dental is included in the Accounting Statements of ODONTOPREV S.A. ** th

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 Subject to Indemnity: Accounting Account (411_ Events Subject to Indemnity/Retained Losses 5 – Administrative Expenses: Accounting Account (46_Administrative Expenses) 6 – Acquisition Costs: Accounting Account (43_Acquisition Costs) 7 – The Known Events calculation is given by: (4111_Known Events/Indemnities Reported of Medical Assistance + (4112_Known Events/ Indemnities Reported of Odontological Assistance) 8 – The Net Profit calculation is given by: (3_Income) - [(4_Outcome) + (61_Tax and Profit Sharing)]

142

Statistics from the Supplementary Health: Care Information from the Operators Associated with FenaSaúde Beneficiaries of Health Plans by Care Coverage and Segmentation of the Plan, According to Time and Type of Plan Contracted (Fenasaúde – February 2010) Time and Type of Plan Contracted

Medical Care including or excluding Dentistry

Only Odontological

Total Medical and Only Odontological

Total

Outpatient

Hospital (1)

Hospital and Outpatient

Reference

Not Informed

Total

11,936,767

24,552

228,025

10,512,021

919,872

252,297

6,524,469

18,461,236

Group

10,017,001

23,225

37,370

9,068,585

887,821

6,008,516

16,025,517

1,667,322

1,323

190,655

1,443,293

32,051

505,678

2,173,000

252,444

143

252,297

10,275

262,719

New

9,855,741

4,170

43,568

8,888,131

919,872

6,206,536

16,062,277

Group

8,870,169

3,982

28,518

7,949,848

887,821

5,701,958

14,572,127

985,572

188

15,050

938,283

32,051

504,578

1,490,150

Old

2,081,026

20,382

184,457

1,623,890

252,297

317,933

2,398,959

Group

1,146,832

19,243

8,852

1,118,737

306,558

1,453,390

Individual

681,750

1,135

175,605

505,010

1,100

682,850

Not Informed

252,444

143

252,297

10,275

262,719

Individual Not Informed

Individual

(1)

Source: Beneficiaries Information System (SIB) - ANS/MS – February 2010

Note: The term “beneficiary” refers to bindings to the health plans, and may include several bindings to a same person. (1) It includes hospital plans, including or excluding obstetrics.

143

Beneﬁciaries of Medical Plans (including or excluding Dentistry) by Care Coverage, Time and Type of Plan Contracted, According to Large Regions and Federation Units (FenaSaúde – February 2010) Medical Care including or excluding Dentistry Large Regions and Federation Units

New Total

Old

Total

Group

Individual

Total

Group

Individual

Not Informed

Brazil

11,853,608

9,781,293

8,792,303

988,990

2,072,315

1,142,937

684,796

244,582

North

176,478

157,160

151,077

6,083

19,318

10,279

7,293

1,746

36,346

31,409

27,648

3,761

4,937

1,206

3,679

1,635

1,260

1,213

375

287

68,277

63,694

63,205

489

4,583

3,518

802

263

Rondônia Acre Amazonas Roraima

917

691

659

226

186

Pará

53,474

45,768

44,120

1,648

7,706

3,774

2,556

1,376

Amapá

11,396

10,980

10,920

416

352

Tocantins

4,433

3,358

3,312

1,075

956

Northeast

1,087,137

781,914

742,653

39,261

305,223

112,736

134,148

58,339

Maranhão

47,913

37,976

37,317

659

9,937

5,141

1,552

3,244

Piauí

12,230

9,539

9,471

2,691

2,133

172

386

Ceará

50,173

37,852

31,785

6,067

12,321

8,006

1,939

2,376

Rio Grande do Norte

32,943

26,376

25,549

827

6,567

3,832

932

1,803

Paraíba

26,370

22,252

21,856

396

4,118

2,860

1,174

304,954

197,023

186,756

10,267

107,931

40,739

50,431

16,761

Alagoas

45,356

32,907

31,879

1,028

12,449

6,060

4,041

2,348

Sergipe

32,177

26,296

26,055

241

5,881

2,712

1,038

2,131

Pernambuco

Bahia

535,021

391,693

371,985

19,708

143,328

41,253

72,869

29,206

9,486,220

7,944,198

7,099,231

844,967

1,542,022

857,174

505,740

179,108

Minas Gerais

409,438

304,882

290,687

14,195

104,556

72,828

26,642

5,086

Espírito Santo

82,344

73,473

71,673

1,800

8,871

6,927

1,744

200

Rio de Janeiro

2,072,617

1,731,464

1,524,354

207,110

341,153

185,288

121,609

34,256

São Paulo

6,921,821

5,834,379

5,212,517

621,862

1,087,442

592,131

355,745

139,566

South

691,445

525,643

467,142

58,501

165,802

137,081

26,756

1,965

Paraná

337,839

268,263

222,920

45,343

69,576

58,549

9,585

1,442

Santa Catarina

126,057

75,242

74,462

780

50,815

49,092

1,570

153

Southeast

Rio Grande do Sul

227,549

182,138

169,760

12,378

45,411

29,440

15,601

370

Midwest

412,325

372,378

332,200

40,178

39,947

25,664

10,859

3,424

Mato Grosso do Sul

24,038

20,494

20,072

422

3,544

2,629

738

177

Mato Grosso

19,871

13,600

13,219

381

6,271

5,315

925

Goiás

133,333

123,502

106,026

17,476

9,831

7,982

1,656

193

Distrito Federal

235,083

214,782

192,883

21,899

20,301

9,738

7,540

3,023

Abroad

Not Identified Federation Unit

Source: Beneficiaries Information System (SIB) - ANS/MS – April 2010

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

144

Beneﬁciaries of Plans Only Odontological by Care Coverage, Time and Type of Plan Contracted, According to Large Regions and Federation Units (FenaSaúde – February 2010) Only Odontological Large Regions and Federation Units

New Total

Old

Total

Group

Individual

Total

Group

Individual

Not Informed

519,191

2,072,315

306,195

1,104

10,275

Brazil

6,553,907

6,236,333

5,717,142

North

99,854

94,083

91,770

2,313

19,318

5,758

Rondônia

10,281

10,112

8,318

1,794

4,937

169

1,838

1,586

375

252

43,921

41,633

41,385

248

4,583

2,276

790

612

610

226

178

Acre Amazonas Roraima

31,897

29,988

29,719

269

7,706

1,908

Amapá

Pará

1,482

1,197

416

285

Tocantins

9,645

8,955

1,075

690

Northeast

524,376

501,022

491,067

9,955

305,223

23,172

181

Maranhão

21,146

19,069

18,883

186

9,937

2,077

Piauí

4,858

4,388

4,309

2,691

470

Ceará

36,627

33,223

32,804

419

12,321

3,403

Rio Grande do Norte

17,164

16,388

16,172

216

6,567

776

Paraíba

16,338

15,161

15,035

126

4,118

1,177

Pernambuco

136,143

132,314

131,299

1,015

107,931

3,799

Alagoas

17,130

16,289

15,792

497

12,449

840

Sergipe

16,073

15,360

15,116

244

5,881

713

258,897

248,830

241,657

7,173

143,328

9,917

149

Bahia

5,091,052

4,834,863

4,346,933

487,930

1,542,022

245,228

1,079

9,882

Minas Gerais

Southeast

332,180

301,059

291,255

9,804

104,556

31,080

Espírito Santo

89,351

86,615

85,733

882

8,871

1,696

1,040

Rio de Janeiro

1,044,901

983,395

942,215

41,180

341,153

59,673

962

871

São Paulo

3,624,620

3,463,794

3,027,730

436,064

1,087,442

152,779

117

7,930

South

453,354

431,973

423,911

8,062

165,802

21,216

141

Paraná

198,691

190,424

189,657

767

69,576

8,161

87,407

83,070

83,022

50,815

4,315

Rio Grande do Sul

167,256

158,479

151,232

7,247

45,411

8,740

Midwest

Santa Catarina

385,271

374,392

363,461

10,931

39,947

10,821

Mato Grosso do Sul

18,665

16,426

16,388

3,544

2,239

Mato Grosso

19,672

17,686

17,624

6,271

1,986

Goiás

96,427

92,939

91,213

1,726

9,831

3,466

Distrito Federal

250,507

247,341

238,236

9,105

20,301

3,130

Abroad

Not Identified Federation Unit

Source: Beneficiaries Information System (SIB) - ANS/MS – April 2010

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

145

Chapter VII

FenaCap The Capitalization Segment 147

In Constant Innovation In the year of 2010 there was a significant increase of the income in the capitalization market in relation to the historical average, indicating not only an answer to the GDP recovery, but also the result of innovative actions by the companies that compose the segment. The modality of the product named as â&#x20AC;&#x153;incentiveâ&#x20AC;? counted on a distinguished development in 2010, since it has been used in new business opportunities showing excellent results, and certainly contributed positively to the final result of the sector. It deserves to be highlighted the importance of such product for the experiences in the placement of microinsurance products, whose expectancy is that they may increasingly develop. As result of the research carried out in the previous year on the perception of the segment by different audiences, in 2010 was developed a work for improving our institutional communication and an action plan to put it into effect. In that respect was created the Committee on Communication of FenaCap, of permanent nature, that substituted the working group that drew up the communication plan; and was contracted an External Advisory on Communication to support its implementation. As regards the second quarter, several initiatives were adopted with this purpose, whose results should be measured to be appraised in the next year. Also in the first semester of 2010, was reviewed and updated the Strategic Planning of FenaCap, that had been drawn up in the beginning of 2008, when were defined the action plans and appointed the people in charge of conducting the projects approved, all of them aiming the sustainable growth of the capitalization segment, in addition to improve the operation way of the Federation. There is the certainty that the capitalization bond is an easy access instrument, being an attractive agent for new saving people, an institutional aspect of considerable relevance in the historical moment of social inclusion and rising for the most part of the Brazilian population that had not access to products of the insurance market. Until then, the demand for such bonds had been presenting in a steady way during the time. However, in the next decade it should distinguish, complying with its social duty even better. Upon these actions, FenaCap intends to remain contributing for the improvement of the capitalization segment, pursuing the objectives defined in its constitution, addressing the attention for improving the instruments already introduced and drawing up new products that may contribute positively for forming the domestic savings, a needful condition for the economic and social development of the Country. Ricardo JosĂŠ da Costa Flores President of FenaCap

148

FenaCap The National Federation of Capitalization (FenaCap) is a non-profit civil association that congregates the companies that compose the capitalization segment operating in the national territory. On December 2010, FenaCap counted on 11 permanent associated. Following, we present the View and the Mission of FenaCap:

View Be the entity of institutional representation for the capitalization companies, recognized by the society and by their associated, with ability to promote the capitalization bond as instrument of economic and social development. Mission Represent the capitalization companies institutionally, care for the image and promote the development of the market.

Executive Board of FenaCap President Ricardo José da Costa Flores

Brasilcap Capitalização S.A.

Vice President Carlos Infante Santos de Castro

Sul América Capitalização S.A. - Sulacap

Maurício Maciel da Rocha

Caixa Capitalização S.A.

Natanael Aparecido de Castro

Brasilcap Capitalização S.A.

Norton Glabes Labes

Bradesco Capitalização S.A.

Officer Aline Ferreira Coropos (a partir de março de 2010) Luiz Fernando Butori Reis Santos (até março de 2010) Edson Roberto Branco Lara (a partir de março de 2010) Fernando Alves Moreira (até março de 2010)

Cia. Itaú de Capitalização HSBC Seguros (Brasil) S.A.

Flávio Roberto Andeani Perondi (a partir de julho de 2010) Patrícia Feltrin (a partir de março de 2010 e até julho de 2010)

Santander Capitalização S.A.

Nilo Sérgio Silveira Carvalho (até março de 2010) Gustavo Pimenta Germano Santos (a partir de março de 2010) Luciano Snel Corrêa (até março de 2010)

Icatu Hartford Capitalização S.A.

Ricardo Athanásio Felinto de Oliveira

Aplub Capitalização S.A.

Ronaldo Cosme Gonçalves Ferreira

Liderança Capitalização S.A.

Executive Office of FenaCap

Helio Oliveira Portocarrero de Castro

FenaCap

149

Audit Committee of FenaCap Permanent Member Ernesto Luis Pedroso Júnior

Cia de Seguros Previdência do Sul

George Ricardo Martins de Souza

Companhia Excelsior de Seguros

Sérgio Alfredo Diuana

Sul América Capitalização S.A.

Deputy Member Fábio de Oliveira Moser (a partir de novembro de 2010) José Fernando Romano Furné (até novembro de 2010)

Brasilcap Capitalização S.A.

José Maria Souza Teixeira Costa

Companhia de Seguros Aliança da Bahia

Oswalberto João Schacht

Confiança Cia. de Seguros

Companies Associated with FenaCap Aplub Capitalização S.A.

Icatu Capitalização S.A.

Bradesco Capitalização S.A.

Liderança Capitalização S.A.

Brasilcap Capitalização S.A.

Mapfre Capitalização S.A.

Caixa Capitalização S.A.

Santander Capitalização S.A.

Cia. Itaú de Capitalização

Sul América Capitalização S.A. – Sulacap

HSBC Empresa de Capitalização (Brasil) S.A.

Modalities of Capitalization Bonds The capitalization bonds are currently structured with the purpose of commercialization, as one of the four modalities informed below: Traditional Its objective is to refund to the holder, at the end of the period, at least, the total value of payments made by the subscriber, since all the projected payments have been made in the scheduled dates. Scheduled Purchase The capitalization company assures to the holder, at the end of the period, the receipt of the surrender value in national currency, being made available to the holder the right to choose, if desired and without any other cost, to receive the good or service contained

150

in the reference card, supported by trade agreements executed with industries, retailers or trading companies. Popular Its objective is to provide participation of the holder in drawings, without full return of the values paid. Incentive Its objective is to provide participation of the holder in drawings without full return of the values paid. The bonds are bound to a promotional event, of commercial nature instituted by the subscriber. All the four modalities of the capitalization bonds could be structured in Periodic Payment (PP), Monthly Payment (PM) or Single Payment (PU).

Institutional Action of FenaCap in 2010 In June, the Federation met to discuss the revision of the Strategic Plan carried out in February of 2008. During this meeting, that counted on the attendance of the Board, the presidents of the Technical Committees and the Executive Board, were defined the Action Plans for the 2010-2013 period. Communication Plan Due to the importance of a continuous work for Institutional Communication, the Working Group on Communication was converted into a Committee on Communication, and to chair it was indicated Olinda Campos – Sul América Capitalização. We are counting on LLorente & Cuenca, Communication Advisory that, jointly with the committee, drew up a working plan with the purpose to make viable the segment expansion, providing better information to the consumer on the actual features of the product, adopting some strategies as definition of general and specific position, in addition to unified messages that will be part of the integrated communication of all the capitalization companies; strategy to be near to and connected with audiences of interest; application of the new communication – keywords – in the companies and management of the relationship with sales teams. Indicators Project The Database of the Market is being developed in the statistic indicators project of CNSeg, that during the year worked on the project operationalization. It is estimated that in the first months of the next year the market may already count on this database.

FenaCap and the Market Regulation Monitoring of proposals for changing the sector regulation This is a permanent activity of the Federation and, in the year of 2010, we monitored the changes proposed by SUSEP in Public Hearing, of the Circulars 365/08 and 376/08, contributing with suggestions for the adjustment to the market needs. During all the year we monitored the analysis of the matter.

The Committee on Products and Coordination of the Federation is developing study addressed to the wording review, aiming at simplifying the language used in the General Conditions of the products with the consumers and thus making the reading more clear and objective. Microsseguros The insurance companies consider capitalization as an important “living benefit” for the microinsurance – offering value to the clients during their lives, and not only in case of their death. It is an essential incentive to the products sale for the microinsurance clients segment. As regards drawing benefit, the practice of the insurance industry is to use the “Incentive” segment of the capitalization. The resources allocated to the capitalization constitute a way of investment of low return, instead of a direct cost. Most of the products thus commercialized include a capitalization component, that the participants in the industry consider a greater incentive for the sale. The capitalization is largely recognized as an effective way to attract the assured that is a precondition for the success in the low-income segment.

Studies to be Developed Commercialization Processes We initiated the study development to use new technologies in order to create new commercialization channels, already adopted by other segments. New Opportunities / Segments We initiated studies to identify opportunities and segments to be proposed to SUSEP as evolution / adequacy of the standards in force in order to extend the range of products offered to the Market. Effect of the drop down in the interest rate The setting of a capitalization bond, due to it contains a contractual interest rate, is particularly sensitive to the stipulation of the interest rate for the market. For that we will study movement environments of such rate and their effects over the capitalization bond.

151

Statistics of Capitalization in 2010 The capitalization market is operated by companies constituted as corporations, with nominative shares, and authorized to work by act of the Ministry of Finance, after analysis by the Superintendence of Private Insurance (SUSEP). In 2010, the income of the 11 companies authorized to commercialize bonds

at the Brazilian market amounted to R$ 11.7 billion, representing a 16.60% growth over the 2009 production. The equity of companies of the sector grew 5.22%, achieving the amount of R$ 6.1 billion, as the table below.

Data from the Capitalization Segment 2005

2009

2010

6,910,339

10,104,143

11,780,949

70.48%

16.60%

10,557,438

14,937,575

17,254,549

63.43%

15.51%

2,901,377

5,875,192

6,182,132

113.08%

5.22%

Accounts Income Technical Provisions Equity

Values in R$ thousand

% Variation 2010/2005

% Variation 2010/2009

In 2010, the total of payments made by bonds surrenders and drawings achieved the amount of R$8.1 billion, against R$8 billion in 2009, deserving to be highlighted the 16.88% growth in relation to the amount of bonds winning. Values in R$ thousand

2005

2009

2010

% Variation 2010/2005

4,709,038

7,584,426

7,589,230

61.16%

0.06%

Expense with Bonds Winning

305,152

515,855

602,947

97.59%

16.88%

Acquisition Costs

515,448

574,906

795,031

54.24%

38.29%

*Administrative Expenses

433,015

516,772

570,755

31.81%

10.45%

Accounts Expense with Bonds Surrendered

% Variation 2010/2009

* Including Administrative Expenses, Expenses of Taxes and Other Operational Incomes and Outcomes

The Capitalization Share in the Brazilian GDP With a 0.33% index, the capitalization share in relation to the Brazilian GDP presented a slight increase during 2010, according to the data divulged by SUSEP and IPEADATA. 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%

2010

11,781

3,554,436**

Income with Capitalization Bonds * Projection **

152

0.33% Source: SUSEP and IPEADATA

Capitalization and Inflation The capitalization segment kept trajectory of actual growth due to the accumulated inflation from 2005 to 2010, as the table below. Income x Inflation Income Growth Capitalization Segment Accumulated Growth

Values in R$ thousand

2005

2009

2010

65,118,292,394

107,773,445,290

125,177,911,208

65,50%

92,23%

Segmento de Capitalização Crescimento Acumulado

6,910,338,878

10,104,142,922

11,780,948,763

46.2%

70.48%

IGPM – Accumulated Index

100

120.76

134.84

1.22%

-1.71%

11.66%

20.76%

34.84%

Annual Growth Accumulated Growth

Source: SUSEP, ANS and IGP-M/FGV (Suma Econômica)

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

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

Actuarial on Capitalization Goal: Perform studies to change the Standard Plan of Capitalization and the adjustments to be made in the FIP as regards capitalization operations. President: Anna Paula Nardi de Almeida – Sul América Capitalização S.A. Mentor: Natanael Aparecido de Castro – Brasilcap Capitalização S.A.

Internal Controls of Capitalization Goal: Study SUSEP normatives on the subject matter and promote the sector development within the scope of the capitalization companies. President: Danilo Campos – Cia Itaú de Capitalização S.A. Mentor: Maurício Maciel da Rocha – Caixa Capitalização S.A.

153

Legal of the Capitalization Goal: Monitor the legal subject matters related to Capitalization. President: Simone Ayub Moregola – Liderança Capitalização.

Information Technology of the Capitalization Goal: Monitor the subject matters in progress in the IT field, adopt improvements in the FIP and monitor the project of capitalization market indicators. President: Carlos Augusto Pestana – Brasilcap Capitalização S.A.

Committee on Communication Goal: Draw up institutional Communication Plan of FenaCap President: Olinda Campos – Sul América Capitalização S.A. Meetings Held in 2010 Number of Meetings Held

Number of Members

Number of Guests

Legal Committee

Actuarial Committee

Committee on Communication

Committee on Products and Coordination

Committee on Management and Finances

Committee on Internal Controls

Committee on Information Technology

Name

154

Chapter VIII

DPVAT The Insurance of the Traffic 157

DPVAT: A Brazilian Achievement DPVAT is modality of compulsory “no-fault” motor insurance instituted by the Law no. 6.194/1974 to cover Bodily Injuries Caused by Automotive Land Vehicles or by their cargo, to people transported or not. It is the insurance that protects all victims of the traffic accidents occurred in Brazil, whether pedestrians, passengers or drivers. The indemnities are paid irrespective of the fault assessment or identification of the vehicle that caused the injury. Since 2008, Seguradora Líder DPVAT is liable for managing the operations of the DPVAT Insurance Conventions, composed by 71 insurance companies, and is committed to assure to population, all over the national territory, the access to the benefits of the DPVAT Insurance, applying with transparency the resources assigned to it by using of modern management methods. The amount of the DPVAT Insurance paid by the vehicles owners yearly is determined

by the National Council of Private Insurance (CNSP). From the total income of the DPVAT Insurance, according to the law in force, 45% are addressed to the Single Health System (SUS) – for costing medical and hospital care of victims of traffic accidents all over the Country, and 5% to the National Department of Transit (DENATRAN) – to be applied in programs addressed to accidents prevention and education in the traffic. In the year of 2010, the amount addressed to the two bodies surpassed R$2.899 billion. In the year of 2010, DPVAT Insurance addressed funds in the amount of R$2.295 billion with expenses of indemnities payment, by death, permanent disability and reimbursements of medical and hospital expenses, on behalf of more than 252 thousand victims of traffic accidents or their beneficiaries, and accumulated the amount of R$2.380 billion in technical provisions: Losses Payable Provisions (LPP) and Incurred But Not Reported (IBNR).

Premium Income 2010 Million

R$ 5,797,37

100.0%

R$ (2,899,20)

50.0%

Total Premiums Income for DPVAT Insurance Operation

R$ 2,898,17

50.0%

Expenses of Indemnities Payment to the Victims of Accidents

R$ (2,295,87)

39.6%

Constitution of Technical Provisions to Indemnities Payment

R$ (519,87)

9.0%

Operating Expenses (databases, personnel, print, collection, etc.)

R$ (196,00)

3.4%

R$ (50,41)

0.9%

R$ (163,99)

-2.8%

Redemption of Technical Provisions for Indemnities Payment

R$ 279,42

4.8%

Income Tax and Social Contribution

R$ (46,17)

0.8%

R$ 69,26

1.2%

Gross Income Transfers to the Federal Government – Compulsory by Law (SUS and DENATRAN)

Expenses of PIS and COFINS Operating Result

Result of the Consortium Companies Net from Taxes and Contributions

158

Indemnities Paid 2010 Death

20%

Disability Medical Care and Supplementary Expenses

Number

2010

Death

50,780

Disability

60%

151,558

Medical Care and Supplementary Expenses Total

50,013 252,351

Development of the Indemnities Expenses The amount of indemnities paid in 2010 was higher by R$262 million (13%) if compared to the amount paid in 2009. In the last five years (2005-2010) there was an increase of R$1.480 billion in the indemnities expenses, the equivalent to a 181% growth. Values in R$ thousand

2,500,000 2,000,000 1,500,000 1,000,000 500,000

2005

2006

Indemnities Amount The indemnities amount paid by the DPVAT Insurance to the victims of traffic accidents or their beneficiaries is determined in the Law no. 11.4287/2007.

2007

2008

2009

2010

Indemnities Amount Death Permanent Disability Medical Care and Supplementary Expenses

R$ 13,500,00 AtĂŠ R$ 13,500,00 AtĂŠ R$ 2,700,00

159

Service Channels DPVAT Ombudsman Service In 2010 the Ombudsman Service of the Seguradora Líder DPVAT answered 4,525 demands, representing a 31% increase if compared to 2009, when were registered 3,447 requests. Such demands were answered within 20 days.

DPVAT Call Center Seguradora Líder DPVAT makes available the DPVAT Call Center (0800-0221204) that answers toll-free calls from all the regions of the Country. Only in 2010 were answered more than 658 thousand calls. In the same period, the institutional site www.dpvatseguro. com.br was accessed more than 3.4 million times. Additionally, the users also count on an e-mail for contacting. Through such channel were answered 28,184 e-mails.

In Attendance Service The victims of traffic accidents or their beneficiaries have a large network of in attendance service of the DPVAT Insurance, composed by 1,084 service stations, offered by the insurance companies of the convention, offices of the unions of insurance brokers, Consumer Protection and Defense Agencies (PROCONs), DETRANs and DPVAT partners.

160

Similarly to the insurance companies of the convention, Seguradora Líder DPVAT also counts on an in attendance service station in the city of Rio de Janeiro.

Task Force of Settlement Seguradora Líder DPVAT has been working in partnership with Courts of Appeals from several Brazilian states. Many citizens file suits unnecessarily due to the performance of attorneys-at-law and intermediaries who aim at obtaining financial return by means of attorney fees and commission charged by the services, causing impairments to the victims. Seguradora Líder DPVAT took part of various task forces objecting to solve such legal matters with agility and to reduce the number of suits filed against the DPVAT Insurance, executing in 2010 more than 9,000 agreements.

Institutional Campaign In 2010, Seguradora Líder DPVAT continued the national campaign of institutional diffusion of the DPVAT Insurance, in order to extend the knowledge of the population. Advertisements were broadcasted on TV, magazines, radio, internet, airports, buses and outdoors of the highways of several Brazilian cities. In a simple and didactic way, the campaign provided guidance as regards the channels to be used for the indemnities requests, seeking to discourage the use of intermediaries. The

slogan for the campaign was the following: DPVAT: The Insurance of the Traffic. All the DPVAT Insurance operations are permanently supervised by the Federal Government, through the Superintendence of Private Insurance (SUSEP) that counts on a supervise team in continuous activity in the

Seguradora LĂder DPVAT offices. Additionally, the insurance company has an organization structure aligned with the best practices of corporate governance (Board of Directors, Audit Council, Audit Committee, Investment Committee, Internal Auditors, Internal Controls and Compliance) and is subjected to independent audit of international level.

161

Social Balance Sheet

2010

163

Index 167 Social Balance Sheet â&#x20AC;&#x201C; General Insurance, Private Pension and Life, Supplementary Health and Capitalization Market 168 Return to Society 169 Recomposition 170 Statement of the Added Value 174 Savings and Reserves Accumulated 175 Allocation of the Gross Added Value 176 Allocation of the Added Value 177 Taxes and Contributions 178 Transfer of DPVAT Insurance to the Government

179 Human Resources 180 181 185 186 188 189

Allocation of the Resources Employees Disabled People Employees Turnover Increase of Postgraduate Professionals Insurance Brokers

190 Property Structure 191 Goods and Rights. Duties and Liabilities

193 Social Balance Sheet â&#x20AC;&#x201C; The Segments 194 Insurance Segment 196 Motor Insurance 198 DPVAT Insurance 203 Personal Insurance 205 Private Pension Plans Segment 209 Supplementary Health Segment 217 Capitalization Segment

Social Balance Sheet General Insurance, Private Pension and Life, Supplementary Health and Capitalization Market 167

Return to Society More than 50% of the Income from Companies Associated with the Federative System returns to Society In 2010, the income of these companies amounted to R$143,554 billion in premiums, contributions, considerations and capitalization bonds. A value that represented 17.3% increase against R$122,428 billion accounted in 2009. It is worth highlighting that the GDP percentage of such group achieved 4.04% of the R$3,554 billion, including the total of goods and services produced in Brazil during 2010. Five years before, in 2005, this percentage was 3.03%. This development shows not only the strength of such market, but also the confidence that the insurance market is representing in the Brazilians perception â&#x20AC;&#x201C; people and companies â&#x20AC;&#x201C; by using the insurance protection in its several modalities. The best image, however, to exemplify the participation of the general insurance, private pension, supplementary health and capitalization market in the development of the economics is the image that shows how much of the income returns to society. More than 57.02% of the market income returns to the people and companies as payment of indemnities and compensations. In 2010, such value amounted to R$53,232 billion, an increase of 11.15% if compared to the 2009 result.

168

Development The insurance segment, including the Supplementary Health and Life Segments, has been the segment that presented a more expressive increase, with global income of R$85,234, 21.34% above the R$70,242 billion of 2009. The further segments also presented excellent performance: Capitalization 20.20%; Open Private Pension 13.98%. The progress of the insurance industry year after year helps to stimulate the circle of the sustainable development of the economics. It has been increased the number of Brazilians who understand how important is to have insurance, private pension plan, supplementary health plan and capitalization bond, preparing its peaceful, today and for the future. The insurers and companies acting within this market need to apply their reserves in mid and long term investments, supporting the constitution of the Brazilian savings. There is larger generation of employments and, therefore, it is contributing decisively for the Country growth.

Return to Society

Recomposition The larger segment of the market, the Insurance segment, paid R$43,042 billion in 2010, not only in the recomposition of goods, but also in the recomposition of the household income and in the health keeping. This number is equivalent to 9.3% above the payments made in 2009, that amounted to R$39,374 billion. Just to give an idea of the return to society, only in indemnities of goods â&#x20AC;&#x201C; that include vehicles and real estate with total loss â&#x20AC;&#x201C; have been paid R$17,821 billion. The Open Private Pension segment paid R$20,186 billion in benefits, surrenders and profitability of the reserves in 2010. The return to society has been 12.1% larger than the R$18 billion paid in 2009. As regards the Capitalization, this segment showed in 2010 increase of 22.7% against 2009 in payment of premiums drawn, bonds surrender and reserves profitability, amounting to R$23,811 billion that returned to society. Values in R$ million

Return to Society

2010

2009

2010/2009

Insurances

43,042,8

39,374,6

9.3%

Recomposition of Goods

17,820,8

16,399,6

8.7%

4,845,2

4,556,4

6.3%

Health Keeping

20,376,8

18,418,6

10.6%

Open Private Pension

20,185,8

18,000,9

12.1%

Benefits Payment + Surrenders

10,540,8

9,405,7

12.1%

Recomposition of the Household Incomes

Yeld Savings

9,645,1

8,595,2

12.2%

Capitalization

23,811,5

19,398,7

22.7%

2,317,0

1,492,1

55.3%

Yeld Savings

21,494,5

17,906,6

20.0%

Total Return to Society

87,040,1

76,774,2

13.4%

Bonds Surrendered + Drawn

Source: SISCORP

169

Return to Society

Statement of the Added Value According to 2010 data, the gross added value amounted to R$45,141 billion, the equivalent to a 18.07% increase in relation to the amount of R$38,231 billion of 2009. This indicator refers to the market income deducted the expenses.

Insurance Companies

A total of 149 associated companies have been operated in the insurance industry in 2010, namely: general insurance: 33, life and private pension: 64, open private pension entities: 15 and companies specialized in health: 26. Number of Associated that have been operated in 2010: General Insurance

Open Private Pension and Life Insurance Companies

Open Private Pension Entities

Supplementary Health

Capitalization

11 Source: SISCORP

Investments

In 2010, the investments of the insurance market amounted to R$406,4 billion, a 18.2% increase in comparison with 2009. It represents more funds applied in the economics, supporting to spin the wheel of the sustainable development. Investments of the Market Equity Pension and Capitalization Insurances Health Permanent Applications and Investments Pension and Capitalization Insurances Health Total of the Investments of the Market

Values in R$ million

2010 71,397,8 58,901,5 12,496,3 335,002,6 316,433,2 18,569,4 406,400,4

2009 62,350,3 51,420,8 10,929,5 281,481,7 264,662,5 16,819,2 343,831,9

2010/2009 14.5% 14.5% 14.3% 19.0% 19.6% 10.4% 18.2% Source: SISCORP

170

Return to Society

Gross Added Value Added Value – Consolidated

Values in R$ million

Gross Income – Consolidated Returns, Cancellations Business Ceded and Transferred to Other Insurers Net Income – Consolidated Insurance Health Insurance Premiums Pension Plans Capitalization Bonds Pension and Capitalization Insurances Health Incomes over Financial Applications and Investments Total Income without Tax on Financial Transactions Pension and Capitalization Insurances Health Tax on Financial Transactions (Over Insurance Premiums) Total Income with Tax on Financial Transactions Costs and Returns of the Activity Insurances Health Final Cost for Keeping the Wealth Insured (Net Losses) Benefits Paid and Surrenders + Complementary Compensation to the Pension Plans (Financial Excess) Bonds Surrendered and Drawn + Yeld Savings Increase in Reserves and in Accumulated Savings Insurances Health Increase in Reserves for Keeping the Wealth Insured Accumulation of Reserves of the Pension Plans Savings of Capitalization Gross Added Value

2010 143,553,7 -1,292,0 -8,571,3 133,690,4 85,234,2 25,575,2 110,809,5 11,094,0 11,787,0 7,480,8 1,161,8 8,642,6 142,333,0 2,985,8 609,3 3,595,1 145,928,1 -53,232,5 -22,766,1 -20,376,8 -43,142,9 -382,0

2009 122,427,8 -1,101,8 -8,243,4 113,082,5 70,242,5 23,300,7 93,543,2 9,733,0 9,806,3 6,910,6 1,072,5 7,983,2 121,065,7 2,592,2 555,4 3,147,6 124,213,3 -47,890,7 -21,011,8 -18,418,6 -39,430,4 -360,0

2010/2009 17.3% 17.3% 4.0% 18.2% 21.3% 9.8% 18.5% 14.0% 20.2% 8.3% 8.3% 8.3% 17.6% 15.2% 9.7% 14.2% 17.5% 11.2% 8.3% 10.6% 9.4% 6.1%

-9,707,5 -47,555,1 -40,869,2 539,3 -40,329,9 -7,117,0 -108,1 45,140,6

-8,100,3 -38,092,0 -31,341,7 -71,3 -31,413,0 -6,609,8 -69,3 38,230,6

19.8% 24.8% 30.4% -856.6% 28.4% 7.7% 56.1% 18.1% Source: SISCORP

171

Return to Society Added Value

Values in R$ million

Gross Added Value Cost of the Added Value Commissions Paid to the Brokers Pension and Capitalization Insurances Health Marketing Pension and Capitalization Insurances Health Outsourcing Pension and Capitalization Insurances Health General Expenses Pension and Capitalization Insurances Health Net Added Value Added Value for Third Parties Non-Operating Income Pension and Capitalization Insurances Health Added Value Received by Transfer (Equity) Pension and Capitalization Insurances Health Added Value Available to the Companies Added Value Allocated Allocation of the Value Added Personal Pension and Capitalization Insurances Health Compensations (Wages) Pension and Capitalization Insurances Health Social Charges Pension and Capitalization Insurances Health Benefits Pension and Capitalization Insurances Health

2010 45,140,6 -20,802,1 -12,906,4 -11,485,8 -1,420,6 -674,9 -540,4 -134,5 -2,597,5 -1,948,5 -649,0 -4,623,4 -3,641,5 -981,8 24,338,4 3,096,5 423,5 423,5 0,0 2,673,0 2,194,5 478,5 27,435,0 -15,835,8

2009 38,230,6 -18,605,5 -10,865,2 -9,590,5 -1,274,7 -550,1 -434,9 -115,1 -2,179,6 -1,629,5 -550,1 -5,010,6 -3,567,4 -1,443,2 19,625,1 4,257,6 679,7 636,8 43,0 3,577,8 3,173,0 404,8 23,882,7 -12,831,5

2010/2009 18.1% 11.8% 18.8% 19.8% 11.4% 22.7% 24.3% 16.8% 19.2% 19.6% 18.0% -7.7% 2.1% -32.0% 24.0% -27.3% -37.7% -33.5% -100.0% -25.3% -30.8% 18.2% 14.9% 23.4%

-5,173,8 -3,943,0 -1,230,8 -3,669,3 -2,796,4 -872,9 -990,7 -755,0 -235,7 -513,7 -391,5 -122,2

-4,673,7 -3,510,9 -1,162,8 -3,314,7 -2,490,0 -824,7 -895,0 -672,3 -222,7 -464,1 -348,6 -115,5

10.7% 12.3% 5.8% 10.7% 12.3% 5.8% 10.7% 12.3% 5.8% 10.7% 12.3% 5.8% Source: SISCORP

172

Return to Society Added Value Government Securities and Contributions Employeesâ&#x20AC;&#x2122; Profit Participation Program (PIS) / Tax for Social Security Financing (COFINS) / Services Tax (ISS) Pension and Capitalization Insurances Health Social Contribution on Net Income (CSLL) Pension and Capitalization Insurances Health Taxes and Fees Corporate Income Tax (IRPJ) Pension and Capitalization Insurances Health Tax on Financial Transactions (IOF) Pension and Capitalization Insurances Health Others Retained Value Allocation of the Retained Value For the Shareholders (Dividends Paid + Interests over Equity) Pension and Capitalization Insurances Health Individual Income Tax (IRPF) Pension and Capitalization Insurances Health Addition to the Equity Pension and Capitalization Insurances Health SaĂşde Total in Taxes and Contributions paid to the Government Pension and Capitalization Insurances Health

Values in R$ million

2010

2009

2010/2009

-10,662,0

-8,157,7

30.7%

-4,115,9

-2,838,9

45.0%

-2,260,6 -1,824,8 -435,8 -1,855,3 -1,592,6 -262,7 -6,546,2 -2,951,0 -2,578,8 -372,3 -3,595,1 -2,985,8 -609,3

-1,580,8 -1,476,1 -104,6 -1,258,2 -1,098,3 -159,9 -5,318,8 -2,171,2 -1,867,0 -304,3 -3,147,6 -2,592,2 -555,4

43.0% 23.6% 316.4% 47.5% 45.0% 64.3% 23.1% 35.9% 38.1% 22.4% 14.2% 15.2% 9.7%

11,599,2

11,051,2

5.0%

4,162,6 3,315,3 847,3 622,0 495,4 126,6 6,814,6 5,897,8 916,8

2,454,3 2,260,7 193,6 366,7 337,8 28,9 8,230,1 7,236,2 993,9

69.6% 46.6% 337.6% 69.6% 46.6% 337.6% -17.2% -18.5% -7.8%

11,284,0 9,477,4 1,806,6

8,524,5 7,371,4 1,153,1

32.4% 28.6% 56.7% Source: SISCORP

173

Return to Society

Savings and Reserves Accumulated The companies, in compliance with the Law, constitute technical reserves that assure the strength of the market and help to reinforce the long term savings in the Country. The technical reserves of the associated companies amounted to R$285,9 billion in 2010, an increase equivalent to 20.2% against the amount of the previous year, R$237,8 billion. They are the collateral for the payment of indemnities, benefits and surrenders.

32% 62%

Reserves for Keeping the Wealth Accumulation of Reserves for the Open Private Pension Plans Savings of Capitalization Bonds

Savings and Reserves Accumulated

Values in R$ million

Reserves for Keeping the Wealth Insured Insurances Health Accumulation of Reserves for the Pension Plans Savings of Capitalization Bonds Total of Accumulated Resources

2010 178,170,9 172,025,3 6,145,6 90,490,6 17,254,5 285,916,0

2009 142,909,5 137,419,0 5,490,5 79,949,8 14,937,6 237,796,8

2010/2009 24.7% 25.2% 11.9% 13.2% 15.5% 20.2% Source: SISCORP

174

Return to Society

Allocation of the Gross Added Value It refers to the sum of the expenses with administrative and business expenses, that amounted to R$20,8 billion.

12,906,4

4,623,4 2,597,5 674,9

Commissions Paid to the Brokers Marketing Outsourcing General Expenses

Total of the Gross Added Value Commissions Paid to the Brokers Insurances

Values in R$ million

Marketing

Outsourcing

General Expenses

Total

11,721,4

60.27%

599,1

3.08% 2,280,5

11.73%

4,847,3

24.92%

19,448,3

100%

Insurances 10,300,8

63.34%

464,7

2.86% 1,631,6

10.03%

3,865,4

23.77%

16,262,5

100%

44.59%

134,5

4.22%

20.37%

981,8

30.82%

3,185,8

100%

-458,0 -262.16%

174,7

100%

Health Open Private Pension Capitalization Consolidated

1,420,6

389,9 223.21%

649,0

52,6 30.14%

190,1 108.82% 126,9

10.76%

234,1

19.85%

1,179,2

100%

3.24% 2,597,5

12.49%

4,623,4

22.23%

20,802,1

100%

795,0

67.42%

23,1

12,906,4

62.04%

674,9

1.96%

Source: SISCORP

175

Return to Society

Allocation of the Added Value It corresponds to investments in human resources, payment of taxes and contributions to the Government and transfer to the shareholders, and additions to the equity of the companies, that amounted to R$27,4 billion.

11,284,0

6,814,6 5,173,8

4,162,6

Human Resources Government Shareholders Addition to the Equity

Values in R$ million

Human Resources Insurances

4,612,8

20.70%

Insurances

3,382,0

19.34%

Health

1,230,8

25.63%

Open Private Pension

405,7

12.15%

Capitalization

155,2

8.58%

Consolidated

5,173,8

Government 9,861,5

Shareholders

44.25%

2,950,3

8,054,9

46.06%

1,806,6

37.63%

669,4 753,1

Addition to the Equity

Total

13.24%

4,863,3

21.82% 22,287,9

100%

2,103,0

12.03%

3,946,5

22.57% 17,486,4

100%

847,3

17.65%

916,8

19.09%

4,801,5

100%

20.05%

783,1

23.46%

1,479,8

44.33%

3,338,0

100%

41.63%

429,2

23.73%

471,5

26.06%

1,809,0

100%

18.86% 11,284,0 41.13%

4,162,6

15.17%

6,814,6

24.84% 27,435,0

100%

Source: SISCORP

176

Return to Society

Taxes and Contributions Other relevant indicator for the active participation of the insurance market in the economics is the payment of taxes and contributions to the Government. In 2010, have been paid R$11,3 billions in several modalities.

Taxes and Contributions Paid by the Companies 7% 6%

87%

Insurances Open Private Pension Capitalization

Taxes and Contributions Paid by the Government

20% 32% PIS/COFINS/ISS CSLL IRPJ IRRF IOF

16% 6%

26%

Net Income Before the Reserves

Values in R$ million

Insurances Employeesâ&#x20AC;&#x2122; Profit Participation Program / Tax for Social Security Financing / Services Tax (PIS / COFINS / ISS) Social Contribution on Net Income (CSLL) Corporate Income Tax (IRPJ) Individual Income Tax (IRPF) Tax on Financial Transactions (IOF) Taxes and Contributions Paid to the Government %

1,985,7 1,522,7 2,397,1 440,9 3,515,1 9,861,5 87%

20% 15% 24% 4% 36% 100%

Open Private Pension

Capitalization

171,8

103,1

26%

132,5 20% 212,9 32% 117,0 17% 35,2 5% 669,4 100% 6%

14%

200,1 27% 341,0 45% 64,1 9% 44,8 6% 753,1 100% 7%

Consolidated 2,260,6 1,855,3 2,951,0 622,0 3,595,1 11,284,0 100%

20% 16% 26% 6% 32% 100%

Source: SISCORP

177

Return to Society

Transfers of DPVAT Insurance to the Government In compliance with the Law, half of the income of DPVAT insurance, relating to the share of tariff premiums, is transferred to the Federal Government, addressed compulsorily to two different bodies. They are: The Single Health System (SUS) (Laws nos. 8.212/1991 and 9.503/1997), that receives 45% of such funds for financing the medical and hospital service to the victims of traffic accidents; and the National Traffic Department (DENATRAN) (Law no. 9.503/1997), with adoption of 5% of the income, addressed to carry out traffic campaigns. In 2010, these contributions amounted to R$2,899 billion for DENATRAN. Such values are equivalent to an increase of 7.15% and 7.41%, respectively, in relation to the volume of funds transferred in 2009. Values in R$ million

SUS DENATRAN Total of Transfers

2010

2009

2010/2009

2,609

2,435

7.15 %

290

270

7.41 %

2,899

2,705

7.17 % Source: Seguradora Líder DPVAT

178

Human Resources Invest in People is the Best Investment The increase in sales of insurance, private pension plans, supplementary health and capitalization bonds in 2010 reflected directly in contracting and in qualification of personnel within the companies that compose the insurance industry. The investments in this segment amounted almost R$2 billion. It helps to guarantee the sustainable development of the Brazilian economics, opening new labor fronts for the young people that come into the market every year. It also means opportunities for the expert employees of insurance companies who have qualified and remained studying to become more skilled. In 2010, according to the data collected, the market employed 29,940 people and

kept one of its main characteristics: the high scholarship degree of its labor power. Within this context, draws the attention the increase of the number of postgraduate practitioners, who represented 11% of the total of employees. The women are already majority â&#x20AC;&#x201C; 54.1%â&#x20AC;&#x201C;, and the men represent 45.9% of the universe of workmen. According to the criterion of age group, the larger part (43.29%) of the employees is between 26 and 35 years old. The information contained in this chapter mirror 41.6% of the market reality, since only 62 companies associated with the federative system answered the questionnaires on data collection of each segment.

179

Human Resources

Allocation of the Resources The value applied in Human Resources in 2010 amounted R$1.898 billion amongst wages, benefits and social charges. From this total, the payment of wages achieved R$1.19 billion (62.7%); social charges represented 22.8%, in the amount of R$432 million, and benefits, R$275.4 million, or 14.5% from the total.

Value allocated in Human Resources 62.7% 58.7% 66.8%

55.5%

63.7% 22.8% 27.5% 26.5%

14.5% 13.9%

24.0%

18.0%

liz

lem

rg ha cia

fits ne Be

ra su

iva

alt

C W om or pe k ns (W a ag tio es n o ) ft

9.2% Su

14.5%

21.8%

Values in R$ million

Insurances Compensation of the Work (Wages) Social Charges Benefits Total Other Benefits Training Medical and Odontological Care Group Life Insurance Private Pension Nursery Leisure Others Total of Benefits

Open Private Pension

Supplementary Health

Capitalization

Consolidated

933,7

63.7%

86,5

66.8%

121,1

55.5%

49,6

58.7%

1,190,8

62.7%

319,8 212,6 1,466,1

21.8% 14.5% 100.0%

31,0 11,8 129,3

24.0% 9.2% 100.0%

57,9 39,3 218,3

26.5% 18.0% 100.0%

23,2 11,7 84,5

27.5% 13.9% 100.0%

432,0 275,4 1,898,3

22.8% 14.5% 100.0%

29,4

13.1%

2,2

8.0%

2,9

10.3%

1,7

10.6%

36,2

12.2%

94,5

42.1%

5,3

19.5%

11,2

39.3%

6,6

40.6%

117,5

39.7%

11,9 53,0 9,9 7,0 18,9 224,5

5.3% 23.6% 4.4% 3.1% 8.4% 100.0%

3,2 2,1 0,9 0,2 13,2 27,0

11.8% 7.7% 3.4% 0.6% 49.0% 100.0%

0,7 10,9 2,1 0,5 0,2 28,5

2.5% 38.2% 7.4% 1.7% 0.6% 100.0%

0,9 4,5 0,6 0,0 1,9 16,2

5.4% 27.9% 3.6% 0.2% 11.7% 100.0%

16,6 70,5 13,5 7,7 34,1 296,2

5.6% 23.8% 4.6% 2.6% 11.5% 100.0% Source: CNSeg

180

Human Resources

Employees The General Insurance has been the segment that more employed people â&#x20AC;&#x201C; 22,494, followed by the Supplementary Health with 4,685 employees. It is worth clarifying that the companies researched of this segment with own service network did not consider the employees of their medical units. The market of Open Private Pension comprehended 1,452 people and the Capitalization, 1,309. The greatest part (41%) of the productive force from the insurance market is concentrated in the business area, totalizing 12,205 employees. Following, is the administrative/financial area, with 8,775 employees, corresponding to 29%; the technical area, that comprehended 8,491 employees (28%) and the corporate area, with 469 or 2% from the total. Always keeping an eye on the workmanship formation and on the opportunity generation of the first job for the young people, the companies, in 2010, offered vacancies for 774 trainees and 401 apprentices.

By Segment 4%

16% 5%

75% Insurances Open Private Pension Supplementary Health Capitalization

Total of Employees by Segment Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

22,494

1,452

4,685

1,309

29,940 Source: CNSeg

181

Human Resources Trainees / Total of Employees 5.58%

4.89% 2.57% 1.09%

Apprentices / Total of Employees 2.67% 1.48% 0.55%

0.41%

Outsourced / Total of Employees 32.82% 22.89%

5.47%

3.89%

Insurances Open Private Pension Supplementary Health Capitalization

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

Trainees

579

774

Apprentices

334

401

Outsourced

10,986

431

271

11,741 Source: CNSeg

182

Human Resources Allocation of Employees by Area 2%

28%

29%

Technical Business Administrative/Financial Corporate

41%

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

6.102 9.418 6.710 264 22,494

176 911 294 71 1,452

2,080 1,099 1,417 89 4,685

133 777 354 45 1,309

8,491 12,205 8,775 469 29,940

Technical Business Administrative/Financial Corporate Total

Source: CNSeg

Gender

54.1%

45.9%

Men Women

Men Women Total

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

10,795 11,699 22,494

655 797 1,452

1,728 2,957 4,685

578 731 1,309

13,756 16,184 29,940 Source: CNSeg

183

Human Resources Number of Years Worked

10,566 35.3%

6,447 21.5%

5,911 19.7%

4,938 16.5%

2,078 6.9%

Up to 2 years From 2 to 5 years From 5 to 10 years From 10 to 20 years Above 20 years

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

Up to 2 years

8,150

513

1441

462

10,566

From 2 to 5 years

4,785

326

1024

312

6,447

From 5 to 10 years

4,388

378

863

282

5,911

From 10 to 20 years

3,551

178

1010

199

4,938

Above 20 years

1,620

347

2,078

22,494

1,452

4,685

1,309

29,940

Total

Source: CNSeg

184

Human Resources

Disabled People Much more than just follow the Law, that assures vacancies reserve for disabled people, the associated companies have been complied with their mission for including such people in the labor market. Similarly to other economic segments, however, there is still lack of qualification of this kind of professional. In 2010, within the universe of 62 associated that answered the CNSeg research, were employed a total of 797 disabled people.

DP / Total of Employees 2.82% 2.45% 2.06% 1.38%

Insurances Open Private Pension Supplementary Health Capitalization

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

635

115

797 Source: CNSeg

185

Human Resources

Turnover of Employees Being a specialized activity that requires qualified practitioners to better serve the different publics, the insurance market has been successful not only in forming new talents, but also in keeping practitioners with years of experience. For that, it has been invested hard in the qualification of their employees. Throughout 2010, within the universe of the companies researched, have been admitted 5,819 employees, while have been fired 4,437 people. The trainees totalized 774 and the turnover index 14.82%.

Turnover of Employees 19.44% 14.82%

2.59%

Admitted Employees Percentage Share

Fired

Trainees

5,819

4,437

774

19.44%

14.82%

2.59% Source: CNSeg

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

Admitted

4,339

352

930

198

5,819

Fired

2,946

426

827

238

4,437

Trainees

579

774

Turnover

13.10%

29.34%

17.65%

18.18%

14.82% Source: CNSeg

186

Human Resources Localization of Employees

39.1% 60.9%

Principal Business Office Branches

Insurances Principal Business Office

Open Private Pension

Supplementary Health

Capitalization

Consolidated

14,439

797

2,216

781

18,233

Filiais

8,055

655

2,469

528

11,707

Total

22,494

1,452

4,685

1,309

29,940 Source: CNSeg

Age Group 2.10%

630

10.59%

3,170

25.26%

7,564

Above 55 years old Between 46 and 55 years old Between 36 and 45 years old Between 25 and 35 years old Up to 25 years old

Up to 25 years old Between 25 and 35 years old Between 36 and 45 years old Between 46 and 55 years old Above 55 years old Total

18.75%

43.29%

12,962

5,614

Insurances

Open Private Pension

Supplementary Health

Capitalization

Consolidated

4,383 9,732 5,613 2,307 459 22,494

141 622 438 201 50 1,452

917 2,017 1,186 490 75 4,685

173 591 327 172 46 1,309

5,614 12,962 7,564 3,170 630 29,940 Source: CNSeg

187

Human Resources

Increases the Number of Postgraduate Professionals Other point to be highlighted is the increase of the number of postgraduate professionals. According to the most recent data from 62 associated, the employees who have Masters Degree, PhD and MBAs are 11.3% from the total, the equivalent to 3,377 employees.

Scholarship

In 2010 it has been kept one of the major characteristics of the insurance market: the high scholarship degree of its labor force. The greatest part of this scenario, 40.1%, finished the college â&#x20AC;&#x201C; totalizing 12,013 employees. Other very expressive number: 8,747 professionals did not finish the college â&#x20AC;&#x201C; nearly 30% from the total

Scholarship Degree 2.7%

11.3% 16.7%

40.1%

29.2% Master Degree / PhD / Postgraduate College Finished College Not Finished High School Finished Others

Insurances Master Degree / PhD / Postgraduate College Finished College Not Finished High School Finished Others Total

2,695 9,046 6,510 3,645 598 22,494

Open Private Pension 144 684 353 234 37 1,452

Supplementary Capitalization Health 412 1,759 1,587 795 132 4,685

126 524 297 328 34 1,309

Consolidated 3,377 12,013 8,747 5,002 801 29,940 Source: CNSeg

188

Human Resources

Insurance Brokers Following the growth of the insurance market in 2010, the insurance broker plays important role in this process, since he is the link between the assured and the insurer. In 2010 acted a total of 69,337 insurance brokers, of which 20,361 solely in the Life Branch and 48,976 in the other branches. In this most comprehensive classification are the Motor, DPVAT, Home/ Housing, Property, Health and Financial Risks branches, amongst other of lower demand. It is also interesting to note the relevance of this activity in the sustainable economic development all over the regions of the Country, since the great part of the insurance brokers is composed by natural persons, totalizing 42,469, while the number of legal entities is 26,868.

28,581

20,395 13,888

6,473

Natural Person

Other Branches Motor Hull DPVAT Home/Housing Property Civil Liability Financial Risks Health Cargo

Insurance Brokers Life Branch Other Branches Total

Natural Person 13,888 28,581 42,469

Legal Entity

Life Branch Personal Accident Pension Life

Legal Entity 6,473 20,395 26,868

Total 20,361 48,976 69,337 Source: FENACOR

189

Property Structure Strong Market, More Protected and Peaceful Assured To face the increasing duties with their public, the companies that compose the insurance market need to be sound and responsible in their financial investments, since they help to strength the companies of the sector and, therefore, to assure fully protection to the consumer. The financial applications spin the wheel of the sustainable development of the economics, driving the stock exchange, the fixed-income market and giving support to strength the long term investments in the Country. The insurance companies need to be prepared to the future, and so they, once more, comply with their role of agents for the economic and social development. In 2010, the market achieved a total volume of investments in the amount of R$300,59 billion. Such result has been 21% above that accounted in 2009, of R$248,83 billion.

190

The permanent investments amounted to R$34,41 billion (5.4% above the previous year), and the working capital of the operations, of R$15,15 billion, representing a 50.4% growth. The total of goods and rights amounted R$350,15 billion â&#x20AC;&#x201C; volume 20,1% above 2009 â&#x20AC;&#x201C;, while the technical provisions, deducted the business expenses, achieved R$278,75 billion. Such provisions, as already said previously, give support to form the Brazilian long term savings. In virtue of the 14.5% growth in the equity of the insurance market in 2010, the sector presented more soundness, giving larger tranquility to the assureds, The equity amounted to R$71,39 billion, well superior to the value accounted in 2009, of R$62,35 billion.

Property Structure

Goods and Rights Duties and Liabilities They constitute the applications of the companies in assets admitted by the Government to face the duties with the assureds.

Total of the Goods and Rights 2010

10%

Permanent Investments Working Capital of the Operations Total of Applications

86%

Total of the Duties and Liabilities 2010 20%

80%

Equity Technical Provisions Deducted the Deferred Business Expenses

Values in R$ million

Period Total of Applications Permanent Investments Working Capital of the Operations Total dos Bens e Direitos Technical Reserves Deducted the Deferred Business Expenses Equity Total of the Duties and Liabilities

Supplementary Insurances + Health Insurances Health 2010 2009 2010 2009 2010 2009 186,924,0 149,443,2 175,971,7 139,624,7 10,952,3 9,818,4

Open Private Capitalization Consolidated Pension 2010 2009 2010 2009 2010 2009 92,587,6 81,251,9 21,079,5 18,136,2 300,591,1 248,831,3

23,301,9

21,107,4

15,684,9

14,106,6

7,617,0

7,000,8

8,581,8

8,464,7

2,527,8

3,078,3

34,411,5

32,650,4

7,540,3

3,385,1

7,724,1

4,018,3

-183,8

-633,2

7,782,1

7,277,7

-170,6

-587,4

15,151,7

10,075,4

217,766,2 173,935,6 199,380,7 157,749,6 18,385,6 16,186,0 108,951,4

96,994,4 23,436,7 20,627,1 350,154,3 291,557,1

171,011,4 134,319,5 165,122,1 129,063,0 46,754,9

39,616,1

34,258,6

5,889,3

5,256,5

90,490,6

79,949,8 17,254,5 14,937,6 278,756,5 229,206,8

28,686,6 12,496,3 10,929,5

18,460,8

17,044,6

217,766,2 173,935,6 199,380,7 157,749,6 18,385,6 16,186,0 108,951,4

6,182,1

5,689,5

71,397,8

62,350,3

96,994,4 23,436,7 20,627,1 350,154,3 291,557,1 Source: SISCORP

191

Social Balance Sheet The Segments

193

Insurance Segment Network for Protecting People, Families, Properties and Business The Brazilian consumer has at your disposal a great range of options of insurances, private pension plans, supplementary health plans and capitalization bonds. The industry, always seeking news and best products has been acquainted, year after year, to be even closest to their customersâ&#x20AC;&#x2122; wishes and, basically, there are tailor made options for each kind of need and in accordance with the possibilities of each person. This plurality of options has been stimulated an increasingly number of people to understand the importance of count on protection of the insurance market, as a way to assure a more peaceful future keeping their property and health. In 2010, the production of the associated companies in respect of the General,

194

Personal and Supplementary Health Insurances represented 84.4% of the income in all the segments, including those of Pension and Capitalization that amounted to R$133,7 billion. From this amount, R$43,0 billion, that is, 38.2%, returned to society as indemnities, compensations and properties recomposition. As regards the Personal Insurances, R$4,8 billion returned to society as indemnities, compensations and revenues in several segments, such as Educational, Individual Life and Individual Personal Accident. Throughout 2010, the General Insurance segment returned R$17,82 billion in payments of indemnities.

Insurance Segment

Keeping the Wealth The associated returned to society R$43.0 billion in payment of indemnities and compensations.

Total in Keeping the Wealth

14%

47%

28%

Health Personal Motor Other Damages

11%

Values in R$ million

2010 Motor DPVAT Property Cargo Home/Housing Rural Liabilities Hull Credits Financial Risks Special Risks Others Health Life + PA VGBL Total General Health Personal

11,871,3 2,550,5 1,564,2 1,006,3 259,5 166,7 132,5 115,6 83,4 58,2 13,9 -1,4 20,376,8 4,805,9 39,3 43,042,8 17,820,8 20,376,8 4,845,2

27.6% 5.9% 3.6% 2.3% 0.6% 0.4% 0.3% 0.3% 0.2% 0.1% 0.0% 0.0% 47.3% 11.2% 0.1% 100%

10,574,1 2,347,4 1,489,1 955,2 355,1 175,8 124,2 96,2 184,9 96,5 1,4 -0,3 18,418,6 4,461,1 95,4 39,374,6

2009 26.9% 6.0% 3.8% 2.4% 0.9% 0.4% 0.3% 0.2% 0.5% 0.2% 0.0% 0.0% 46.8% 11.3% 0.2% 100%

2010/2009 12.3% 8.7% 5.0% 5.3% -26.9% -5.2% 6.7% 20.2% -54.9% -39.7% 897.6% 337.0% 10.6% 7.7% -58.8% 9.3%

41.4% 47.3% 11.3%

16,399,6 18,418,6 4,556,4

41.7% 46.8% 11.6%

8.7% 10.6% 6.3% Source: SISCORP

195

Motor Insurance Fleet of 12 Million of Vehicles Trafficking in the Country with Insurance Protection Major portfolio of the General Insurance Segment, the Motor Branch has been the leader with premiums income of R$20,052 billion, 15.26% above the accounted in 2009. If compared to the production of five years ago, (R$12,125 billion), it is even more clear this increase: 65.38%. One of the main reasons of such growth has been the repeated records in production and sale of the Brazilian motor industry. In addition to the coverages addressed to the kinds of risk a vehicle is exposed to â&#x20AC;&#x201C; collision, fire, theft, robbery and civil liability â&#x20AC;&#x201C;, the insurers, following market trend, has increasingly sought to attract the assured and excel in the market with extra benefits. In this context are included, e.g., services of key maker, plumber and baby sitter. And even service of chauffer to drive the car if the assured has consumed alcohol.

196

It is necessary to highlight, however, that not only the motor boom and the benefits have been contributed to the growth of this branch. The improvement of the C and D classes that has enabled the new consumers also to buy automobiles and make insurance, gave support to increase significantly the consumption base of the Motor market. This may be noted by comparing the fleet insured in the last two years. In 2009, the number of vehicles protected by insurance was 12,328,417, while in 2010 such number was approximately 13,164,000. That is, there has been a 9.3% increase in the volume of vehicles insured. In 2010, the Motor market returned to society as payment of indemnities more than the half of its volume of business, amounting to R$12,732 billion.

Motor Insurance

Keeping the Wealth In accordance with the statistics from the Superintendence of Private Insurance (SUSEP) in respect of 2009, have been paid R$11,1 billion in indemnities for 12 million of vehicles insured. The correspondent to robberies and thefts represents 37% of payments, followed by partial indemnities, 34%. The indemnities of fire represented 1% of the total of indemnities paid. 1%

23% Indemnity – Robbery and Theft Partial Indemnity Full Indemnity Indemnity – Fire Indemnity – Others

37%

34%

By Age Group The group of consumers between 36 and 45 years old, in the height of the productive phase, has been the group that concentrated the larger part of the payment of indemnities payment for this segment, representing 23% , for 631,5 thousand agreements claimed in the group. This group also concentrates the larger number of vehicles insured. 4%

15% 19% 22% 23% 17%

Between 18 and 25 years old Between 26 and 35 years old Between 36 and 45 years old Between 46 and 55 years old Age not Informed Above 55 years old

197

DPVAT Insurance The Social Insurance of Brazil DPVAT Insurance (Compulsory “no-fault” motor insurance to cover bodily injury caused by automotive land-road vehicles or by its cargo, to persons transported or not) has been created in 1974 to protect the victims of traffic accidents all over Brazilian territory. Since then, this important social protection sustained a series of changes addressed to improve the service to the population. The management of this insurance is made by the Seguradora Líder DPVAT, since January 2008. DPVAT Insurance benefits all the victims of accidents with vehicles, occurred within the Country, whether pedestrians, passengers or drivers. The indemnities are paid irrespectively of determination of the fault or identification of the vehicle that caused the loss, without the need of intermediary. The mission of the DPVAT Insurance, throughout 37 years, has been to protect and benefit victims of traffic accidents and their beneficiaries. Considering its very important social role, DPVAT should not be known as compulsory insurance – it is due to the Law no. 6.194 of 1974 –, but it should be known as social insurance. This coverage has been favored millions of people during these years at a very difficult moment: the lost of a dear relative, the discovery that the traffic accident caused the permanent disability or the payment of hospital expenses. Other important social role of the DPVAT Insurance is its contribution for keeping the public health and the national policy of traffic. From the total income of the

198

DPVAT Insurance, according to the law in force, 45% are intended for the Single Health System (SUS), for financing the medical and hospital care to the victims of traffic accidents all over the Country, and 5% to the National Department of Traffic (DENATRAN), to be invested in programs addressed to prevention of traffic accidents. Campaign – With the purpose to extend and ease the access of the population to this important tool of social protection, it has been initiated a large campaign of institutional diffusion of the DPVAT Insurance around the Country in November 2009, as well as the extension of the service network by means of the DPVAT Partner Project, iniciated in the second semester of 2009. Such campaign has been separated into two phases that extended in 2010: the first phase with the purpose to increase the knowledge of the Brazilian population on the DPVAT Insurance and the second to consolidate this knowledge. Call Center – To better clarify the public – receiving information requests, complaints, questions and suggestions – Seguradora Líder DPVAT keeps the Costumer Service, via internet, at www.dpvatseguro.com br, and in the Call Center through the telephone number 0800 0221204. In 2010 have been registered more than 658 thousand of calls by the Call Center and 28,184 thousand inquiries via internet. Seguradora Líder DPVAT keeps an own ombudsman service, that may be contacted by letter or fax.

DPVAT Insurance

Indemnities Paid Only in 2010, 252,351 indemnities have been paid to victims of traffic accidents or their beneficiaries. From this total, 50,780 indemnities refer to death, 151,588 to permanent disability and 50.013 to reimbursements of supported Medical Care and Supplementary Expenses (DAMS). The sum of all the payments â&#x20AC;&#x201C;indemnities plus expenses with the indemnities â&#x20AC;&#x201C; achieved the amount of R$2,295 billion. From this total, the greatest part refers to indemnities for disability (R$1,370 billion), followed by death (R$835,9 million) and coverage of medical expenses (R$89,5 million). The South is the region that receives the greatest part of the indemnities paid, totalizing R$672 million, or 29.29% from the total in 2010; followed by the Southeast, R$602 million, the equivalent to 26.25% from the total of indemnities.

Indemnities Paid 1,746

Truck

6,662 6,369 32,823

Motorcycle

103,228 17,290

Bus and Microbus

1,383 2,976 1,552 14,061

Automobile

38,692 25,569

20,000

DAMS

40,000

Disability

60,000

80,000

100,000

120,000

Death

199

DPVAT Insurance

By Age Group Other relevant data, observing the numbers of the DPVAT Insurance in 2010, is that, amongst the people that sustain some damage in traffic accidents, 64.4% are in the age group between 16 and 40 years old, that is, in the age group that concentrates the larger force of the economically active population of the Country. A number that is also very expressive is the 22.9% of indemnities paid by this social insurance that refers to the group between 41 and 60 years.

Indemnities Paid by Age Group

8.19%

4.52%

43.1% Between 0 and 15 years old Between 16 and 30 years old Between 31 and 60 years old Above 61 years old

44.2%

By Kind of Victim The driver is the main victim in the traffic accidents, according to the statistics of indemnities paid by the DPVAT. In 2010, 129,153 drivers have been victimized, the correspondent to 51.2% of the indemnities paid, followed by the group of pedestrians, a total of 77,197 victims, 30.6% of the payments made.

Indemnities Paid by Kind of Victim 18%

51% 31%

200

Transported Pedestrian Driver

DPVAT Insurance

By Kind of Vehicle / Motorcycles It also draws the attention the growth in the number of indemnities paid by permanent disability in 2010, above the average of the further coverages – death and DAMS – with highlight once more for the accidents with motorcycles, that despite of represent around 25% of the Brazilian fleet, correspond to 61% of all the indemnities paid. The accidents with passenger cars have been the second main group of accidents, representing 31%, of indemnities paid by the DPVAT Insurance. Although in the Southeast is the great part of the motorcycles fleet of the Country, 41.28% from the total, the South is the leader in volume in payment of indemnities of accidents with motorcycles, with 31.07%, followed by the Northeast, with 28.32%; Southeast, with 23.72%; North, with 9.05% and Midwest, with 7.84%.

Indemnities Paid by Kind of Victim – Motorcycles

14%

17% 69% Transported Pedestrian Driver

201

DPVAT Insurance Motorcycles Fleet by Regions of Brazil 7.73%

17.44% 23.14%

41.28%

North Northeast Midwest Southeast South

10.41%

Indemnities Paid by Regions of Brazil 9.05%

31.07% 28.32%

23.72%

7.84%

Source: Seguradora LĂder DPVAT

202

North Northeast Midwest Southeast South

Personal Insurance Increasing Expansion Ensuring and Keeping the Quality of Life Drawing an imaginary line of the time on the market, it may be identified several reasons that stimulate an increasingly number of Brazilians to buy the protection provided by the personal insurances. The economic stability is amongst the most important reasons to the rising of this market segment, followed by the increasing awareness that the misfortunes may undertake anyone, requiring ways to reduce vulnerabilities and risks. The offer of proper and innovative products, as the redeemable, to destroy the idea that life insurance is only against death, attracts new buyers, as the new middle class. The women are already liable for 30% of the insured mass and the micro, small and mid size companies, are considering the Personal Insurance a tool of policy for maintaining talents. Combined, such factors have been guaranteed the continuity of the growth for the Personal Insurance segment in two digits. Something that, as far as increase the revenue of the workman and the process of social rising, has direct relation with the perception that this is the most efficient way to keep the quality of the life family, the greatest treasury of the person. The result of that is not only the sound increase in the income of the insurers, but also what returns to society, as payment of capitals insured (indemnities) and surrenders. In 2010, the premiums income increased 14.6% over 2009, jumping to R$15,7 billion. And the indemnities and surrenders corresponded to 34.2% over the income of this market, with a volume of payments of R$4,8 billion to the assureds and/or beneficiaries.

In this segment, where are negotiated the Credit Life, Educational, Individual Life and Group Life insurances, for example, there are some modalities that highlighted, following the track of the positive economic conjuncture. The national and international travelling of Brazilians tourist ensured followed records in the income of the tourism insurance. In 2010, this modality grew 117.5% in relation to 2009, following the record expenses of Brazilians with travelling. Despite of the extraordinary expansion, as regards premiums income, the travelling insurance, with its R$33,5 million accounted in 2010, is still far from to threaten the leadership of the Group Life, that was liable for 49.8% of the total income of the personal segment. Its income achieved R$7,8 billion in 2010, an increase of 8.5% over 2009, as result from the record in the generation of formal employments. The Individual Life insurance ended the period with R$1,1 billion in premiums, an increase of 36.89% comparing to 2009, proving the increasingly number of Brazilians who are more concerned and careful in relation to their future and families. Other modality that increased in two digits in 2010 was the Credit Life insurance, where occurring the misfortune, the release of the installments or the balance due of debts is guaranteed by the insurance company. The growth rate has been 24.5% in comparison with 2009, being directly associated with the sound increase of credit in the Country to buy electrical appliances and other durable goods.

203

Personal Insurance

Keeping the Wealth The Group Life, Individual Life, Credit Life and Travelling insurances have been liable for 89.69% of the volume that returned to society as payment of capitals insured (indemnities), amounting to R$4.8 billion. In 2010, the Personal Insurance accounted R$15,7 billion, 14.6% above the previous year.

Return to the Assureds 24% 32% 35% 47% 34% 12% 54%

Credit Life Random Events Individual Life Group Life Personal Accident – Individual Personal Accident – Collective Educational + PCHV + Tourism

Values in R$ million

Credit Life Random Events Individual Life Group Life Personal Accident – Individual Personal Accident – Collective Educational PCHV* Turístico Tourism Loss Ratio = Retained Loss / Earned Premium * PCHV = Loss of Flight License due to Disability

204

Insurance Premium 3,396,3 375,3 1,144,1 7,826,0 367,3 2,552,5 19,5 1 33,5 15,7

Loss Ratio 24% 32% 35% 47% 34% 12% 73% -121% 44% 35% Source: SUSEP

Pension Plans Segment Helping to Guarantee a more Peaceful Future The economic stability, the increase in the life expectancy of the population, the concern to guarantee a peaceful future, and also the improvement in the Brazilians income, have been fundamental questions for the expressive increase in the pension plans sales occurred in the last years. From 2005 to 2010, the average increase in the income of these plans (risk and survival coverages of open private pension plans and survival coverage only, in personal insurance plans) has been 16.52%. In 2010 the income amounted to R$46 billion, 18.9% above the previous year. The recourses of the pension plans are returned to the consumers as surrender and payment of benefits. In 2010, the number of benefits paid has been 103,725, representing a 1.26% increase against the number of benefits paid in 2009, 102,430.

The payments as revenue have been the main kind of benefit paid in 2010, totalizing 101,336 â&#x20AC;&#x201C; retirement revenue (77,116) and disability and death annuities (24,220). In respect of savings, have been paid 2,389. Following the portfolios size, the surrenders in pension plans have been more expressive in VGBLs, amounting to R$15,2 billion; followed by PGBLs with R$3,1 billion and by traditional pans, with R$1,2 billion. All such numbers show how important the pension plans are in the people life, consolidating them as a protection way increasingly required by population. Its social reach, however, goes further. The accumulated provisions (mathematical and technical) of the segment, that in 2010 amounted to R$216 billion, help to constitute long term internal savings, needful for the sustainable development of the Country.

205

Pension Plans Segment

Total Wealth Income

99% Open Private Pension Entities Insurance Companies

Number of Participants 7%

93% Open Private Pension Entities Insurance Companies

Income and Number of Participants Accumulated Value Number of Participants

Values in R$ thousand

Open Private Pension Entities

Insurance Companies

Consolidated

503,533 0.56% 1,236,097 6.88%

89,987,019 99.44% 16,733,215 93.12%

90,490,552 100% 17,969,312 100% Source: FenaPrevi

206

Pension Plans Segment

Benefits and Surrenders Companies

51%

49%

Open Private Pension Entities Insurance Companies

Number of Beneficiaries

93% Open Private Pension Entities Insurance Companies

Benefits and Surrenders By Kind of Company Number of Beneficiaries

Values in R$ thousand

Open Private Pension Entities

Insurance Companies

Consolidated

187,393 49.05% 54,443 16.07%

194,629 50.95% 284,330 83.93%

382,022 100% 338,773 100% Source: SISCORP

207

Pension Plans Segment

Kinds of Benefits and Surrenders Number of Benefits Paid 2008 Savings

2009

2010

2010/2009

1,928

2,275

2,389

5.01%

95,044

100,155

101,336

1.18%

Disability and Death Annuities

23,106

23,302

24,220

3.94%

Retirement Revenue

71,938

76,853

77,116

0.34%

96,972

102,430

103,725

Payment as Revenue

Total of Benefits Paid

1.26% Source: FenaPrevi

Surrenders

Values in R$ billion

Pension Plans Period

VGBL

2007

Open Private Pension

Total

PGBL

Traditional Plans

Total

7,9

2,3

1,7

4,0

11,9

2008

12,4

2,8

1,5

4,3

16,7

2009

12,1

3,0

1,4

4,4

16,5

2010

15,2

3,1

1,2

4,3

19,5

2010/2009

25.6%

3.3%

-14.3%

-2.3%

18.2% Source: SUSEP

Number of Surrenders Â Open Private Pension Entities

PGBL

Traditional Plans

VGBL

273

2,840

Information Not Available

Insurance Companies

615,146

206,371

Information Not Available

Total

615,419

209,211

Information Not Available Source: FenaPrevi

208

Supplementary Health Segment Services Achieve 290 Million, only in the Group of Asociated with FenaSaúde The Supplementary Health segment – taking into account not only the associated –, has been grown in a coherent way before the increasingly number of Brazilians who wishes to guarantee two of their major “wealths”: the health and the well being. A search that already represents one of the main consumption desires of the Brazilian people. According to the kind of activity, all the private plans of health care are considered as insurance. In 2010, amongst the affiliated with FenaSaúde – that in addition to the Insurance Companies Specialized in Health also include some companies of Group Medicine and Group Dentistry –, the income went from R$24,6 billion to R$27,6 billion, representing an increase of 12.0 % if compared to 2009. In five years the segment grew 104%. The relation between care expenses and income from insurance premiums in this segment has been 78.7% in 2010 – the highest index of all the insurance market in this year. But it is worth considering the differences between health and other branches, as well the nonexistence of financial limit for the risk coverage and the use and indefinite term period in the individual plans. Referring only to the income of the Insurance Companies Specialized in Health, the health segment corresponds to the third larger production of the Country, concentrating 11% of the insurance industry and generating income from the Insurance Companies Specialized in Health in the amount of R$ 13,979 billion.

As per the data from the sector, in January 2010, 18,4 million of Brazilian had a health plan with the affiliated with FenaSaúde. From this total, 11,853 million were medical care plans, including or excluding odontological care, while the plans exclusively odontological were 6,55 million. FenaSaúde represents 28.3% of the market of medical plans in the Country and 50.1% of the plans exclusively odontological. The great part of the beneficiaries of care coverage medical plans – including or excluding odontological care – is concentrated in the Southeast, with 9,486 million of people. The Northeast comes next, with a total of 1,08 million of assureds. As regards the care coverage odontological plans, the separation into regions is as follows: 5,09 million of beneficiaries in the Southeast and 524 thousand in the Northeast. With procedures increasingly complex and sophisticated, the plans have been served the population well and it is clear as per the data relating to services in 2009 presented in this report. By the way of example, the cervix examination, important to prevent the female health between 25 and 59 years old, has been made 1,65 million of times. As regards odontological services, 2 million of examinations have been made – mainly fluorterapy or fluor application in children. All in all, the affiliated with FenaSaúde made about 290 million of individual services, being 62 million of appointments and 146 million of examinations.

209

Supplementary Health Segment

Technical Reserves In the last three years, the balance of the technical reserves of the affiliated accounted an accumulated increase of 37.4%, encouraged by the changes in the rules for composing the reserves, supporting even more its financial balance, and, therefore, the quality of the services provision to society Modality

2007

2008

2009

2010

Group Medicine

350,463,820

551,834,238

668,460,401

1,443,748,988

Group Dentistry

15,545,242

18,199,605

22,575,013

42,953,076

Insurance Company Specialized in Health

4,180,236,470

4,440,249,713

4,797,444,395

4,761,556,764

Total

4,546,245,531

5,010,283,556

5,488,479,809

6,248,258,828

Source: Accounting Statement of the Operators available at www.ans.gov.br. Collected on April 2011.

Notes: 1) As regards the operators that did not send the Accounting Statement of the 4th quarter of 2010, were used the information of the 3rd quarter. 2) The calculation of the Technical Reserves is given by: 211_Technical Reserves of Health Care Operations (Current Liabilities) + 2311_Technical Reserves of Health Care Operations (Long Term Liabilities).

Services Provided in 2009 Beneficiaries of Health Plans, by Care Coverage and Segmentation of the Plan, According to Time and Type of Plan Contracted Time and Type of Plan Contracted

Medical Care including or excluding Dentistry Reference

Not Informed

Only Odontological

Total Medical and Only Odontological

Outpatient

Total

11,853,608

24,768

228,841

10,438,118

917,447

244,434

6,553,907

18,407,515

Group

9,935,240

23,439

37,473

8,989,002

885,326

6,023,337

15,958,577

Individual

1,673,786

1,325

191,368

1,448,972

32,121

520,295

2,194,081

244,582

144

244,434

10,275

254,857

9,781,293

4,069

43,737

8,816,040

917,447

6,236,333

16,017,626

8,792,303

3,880

28,575

7,874,522

885,326

5,717,142

14,509,445

Not Informed New Group Individual

Hospital

Hospital(1) and Outpatient

Total

(1)

988,990

189

15,162

941,518

32,121

519,191

1,508,181

Old

2,072,315

20,699

185,104

1,622,078

244,434

317,574

2,389,889

Group

1,142,937

19,559

8,898

1,114,480

306,195

1,449,132

Individual

684,796

1,136

176,206

507,454

1,104

685,900

Not Informed

244,582

144

244,434

10,275

254,857

Source: eneficiaries Information System (SIB) - ANS/MS – January 2010

Nota: Note: The term “beneficiary” refers to bindings to the health plans, and may include several bindings to a same person. (1) It includes hospital plans, including or excluding obstetrics.

210

Supplementary Health Segment Beneﬁciaries of Medical Plans (including or excluding Dentistry) by Care Coverage, Time and Type of Plan Contracted, According to the Large Regions and Federation Large Regions and Federation Units

Medical Care including or excluding Dentistry New

Total

Old Individual

Not Informed

Brazil

11,853,608

9,781,293

8,792,303

988,990

2,072,315

1,142,937

684,796

244,582

North

176,478

157,160

151,077

6,083

19,318

10,279

7,293

1,746

36,346

31,409

27,648

3,761

4,937

1,206

3,679

1,635

1,260

1,213

375

287

68,277

63,694

63,205

489

4,583

3,518

802

263

Rondônia Acre Amazonas Roraima

Total

Group

Individual

Total

Group

917

691

659

226

186

Pará

53,474

45,768

44,120

1,648

7,706

3,774

2,556

1,376

Amapá

11,396

10,980

10,920

416

352

Tocantins

4,433

3,358

3,312

1,075

956

Northeast

1,087,137

781,914

742,653

39,261

305,223

112,736

134,148

58,339

Maranhão

47,913

37,976

37,317

659

9,937

5,141

1,552

3,244

Piauí

12,230

9,539

9,471

2,691

2,133

172

386

Ceará

50,173

37,852

31,785

6,067

12,321

8,006

1,939

2,376

Rio Grande do Norte

32,943

26,376

25,549

827

6,567

3,832

932

1,803

Paraíba

26,370

22,252

21,856

396

4,118

2,860

1,174

304,954

197,023

186,756

10,267

107,931

40,739

50,431

16,761

Alagoas

45,356

32,907

31,879

1,028

12,449

6,060

4,041

2,348

Sergipe

32,177

26,296

26,055

241

5,881

2,712

1,038

2,131

Pernambuco

Bahia

535,021

391,693

371,985

19,708

143,328

41,253

72,869

29,206

9,486,220

7,944,198

7,099,231

844,967

1,542,022

857,174

505,740

179,108

Minas Gerais

409,438

304,882

290,687

14,195

104,556

72,828

26,642

5,086

Espírito Santo

82,344

73,473

71,673

1,800

8,871

6,927

1,744

200

Rio de Janeiro

2,072,617

1,731,464

1,524,354

207,110

341,153

185,288

121,609

34,256

São Paulo

Southeast

6,921,821

5,834,379

5,212,517

621,862

1,087,442

592,131

355,745

139,566

South

691,445

525,643

467,142

58,501

165,802

137,081

26,756

1,965

Paraná

337,839

268,263

222,920

45,343

69,576

58,549

9,585

1,442

Santa Catarina

126,057

75,242

74,462

780

50,815

49,092

1,570

153

Rio Grande do Sul

227,549

182,138

169,760

12,378

45,411

29,440

15,601

370

Midwest

412,325

372,378

332,200

40,178

39,947

25,664

10,859

3,424

Mato Grosso do Sul

24,038

20,494

20,072

422

3,544

2,629

738

177

Mato Grosso

19,871

13,600

13,219

381

6,271

5,315

925

Goiás

133,333

123,502

106,026

17,476

9,831

7,982

1,656

193

Distrito Federal

235,083

214,782

192,883

21,899

20,301

9,738

7,540

3,023

Abroad

Not Identified Federation Unit

Source: Beneficiaries Information System (SIB) - ANS/MS – January 2010

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

211

Supplementary Health Segment Beneﬁciaries of Plans Only Odontological by Care Coverage, Time and Type of Plan Contracted, According to Large Regions and Federation Large Regions and Federation Units

Only Odontological New

Total

Old Individual

Not Informed

Brazil

6,553,907

6,236,333

5,717,142

519,191

2,072,315

306,195

1,104

10,275

North

99,854

94,083

91,770

2,313

19,318

5,758

Rondônia

10,281

10,112

8,318

1,794

4,937

169

1,838

1,586

375

252

43,921

41,633

41,385

248

4,583

2,276

Acre Amazonas Roraima

Total

Group

Individual

Total

Group

790

612

610

226

178

31,897

29,988

29,719

269

7,706

1,908

Amapá

1,482

1,197

416

285

Tocantins

9,645

8,955

1,075

690

Northeast

524,376

501,022

491,067

9,955

305,223

23,172

181

Maranhão

Pará

21,146

19,069

18,883

186

9,937

2,077

Piauí

4,858

4,388

4,309

2,691

470

Ceará

36,627

33,223

32,804

419

12,321

3,403

Rio Grande do Norte

17,164

16,388

16,172

216

6,567

776

Paraíba

16,338

15,161

15,035

126

4,118

1,177

0 30

Pernambuco

136,143

132,314

131,299

1,015

107,931

3,799

Alagoas

17,130

16,289

15,792

497

12,449

840

Sergipe

16,073

15,360

15,116

244

5,881

713

Bahia

258,897

248,830

241,657

7,173

143,328

9,917

149

5,091,052

4,834,863

4,346,933

487,930

1,542,022

245,228

1,079

9,882

Minas Gerais

332,180

301,059

291,255

9,804

104,556

31,080

Espírito Santo

89,351

86,615

85,733

882

8,871

1,696

1,040

Southeast

Rio de Janeiro

1,044,901

983,395

942,215

41,180

341,153

59,673

962

871

São Paulo

3,624,620

3,463,794

3,027,730

436,064

1,087,442

152,779

117

7,930

South

453,354

431,973

423,911

8,062

165,802

21,216

141

Paraná

198,691

190,424

189,657

767

69,576

8,161

87,407

83,070

83,022

50,815

4,315

Rio Grande do Sul

167,256

158,479

151,232

7,247

45,411

8,740

Midwest

385,271

374,392

363,461

10,931

39,947

10,821

Mato Grosso do Sul

18,665

16,426

16,388

3,544

2,239

Mato Grosso

19,672

17,686

17,624

6,271

1,986

Goiás

96,427

92,939

91,213

1,726

9,831

3,466

Santa Catarina

Distrito Federal

250,507

247,341

238,236

9,105

20,301

3,130

Abroad

Not Identified Federation Unit

Source: Beneficiaries Information System (SIB) - ANS/MS – January 2010 Note: The term “beneficiary” refers to bindings to the health plans, and may include several bindings for a same person.

212

Supplementary Health Segment Attention to Health – Number of Events Item

Total

Attention to Child – Hospital Live Birth Premature

7,982

Live Birth 36 Weeks

137,421

Dead Birth Hospitalization in ICU in the Neonatal Period Hospitalization from 0 to 5 years old for Selected Causes

405 6,078 37,250

Attention to Women - Outpatient Colpocitologic Exam of the Cervix for the 1st Time (from 25 to 59 years old)

1,652,911

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

474,617

HIV testing in Expectant Mother

262,675

Attention to Woman - Hospital Vaginal delivery Caesareans Hospitalization for Hypertensive Disorder during Pregnancy, Childbirth and Puerperium Hospitalization due to Infectious Disorder during Puerperium Women Hospitalized for Breast Cancer Women with Breast Cancer Submitted to Selected Procedures Women Hospitalized for Cervix Cancer Women with Cervix Cancer Submitted to Selected Procedures

31,758 113,571 5,007 13,000 5,582 3,362 11,617 7,724

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

74,832

Attention to Adult and Elderly – Hospital Hospitalization for Hypertensive Disease

17,823

Hospitalization for Diabetes Mellitus

12,179

Hospitalization for Diabetes Mellitus - Amputation of Lower Limbs Hospitalization for Acute Myocardial Infarction – Discharge for Death Hospitalization for Acute Myocardial Infarction Hospitalization for Cerebrovascular Disease

85 197 5,742 11,440

People Hospitalized for Colon and Rectum Cancer

4,272

People with Colon and Rectum Cancer Submitted to Selected Procedures

2,083

Men Hospitalized for Prostate Cancer

8,169

Men with Prostate Cancer Submitted to Selected Procedures

6,713

Buccal Health Persons Submitted to Fluor Therapy

2,018,306

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

1,765,738

Tooth with Finished Endodontic Treatment

341,006

People who Received Sealants (under 15 years old)

420,109

Acute Toothache

96,676

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

32,605 3,044

Source: Products Information System /ANS/MS – March 19th, 2010.

Total: Number of people who made certain procedure or number of events.

213

Supplementary Health Segment Number of Events and Expenses by Modality Expense Item

Insurance Companies

Medical Appointments

26,502,313

1,456,776,342,97

35,488,594 1,304,885,632,60

61,990,907

2,761,661,975,57

Examinations

74,389,052

2,207,679,115,68

71,831,549 1,697,364,075,69

146,220,601

3,905,043,191,37

8,984,810

451,793,147

8,922,779

377,591,090

17,907,589

829,384,236,61

626,405

5,214,818,909

2,278,371

4,099,021,642

2,904,776

9,313,840,551,06

Further Outpatient Services

10,202,502

812,126,975,34

15,542,414

755,850,776,97

25,744,916

1,567,977,752,31

Further Medical and Hospital Expenses

7,886,213

237,289,572,23

4,179,790

224,824,294,55

12,066,003

462,113,866,78

Initial Odontological Appointments

720,376

9,976,551,06

577,621

6,188,081,07

2,010,611

7,366,802,83

3,308,608

23,531,434,96

Complementary Odontological Examinations

780,511

9,224,544,62

621,996

6,711,922,47

1,234,800

16,628,433,36

2,637,307

32,564,900,45

Further Odontological Procedures

4,144,872

118,842,985

4,286,714

101,425,809

7,446,208

172,597,200

15,877,794

392,865,993,71

Further Odontological Expenses

-244,396,82

17,935

1,389,344,57

0,00

17,984

1,144,947,75

FenaSaĂşde

Expense

134,237,103 10,518,283,745,55 143,747,763 8,575,252,668,57

Source: Products Information System /ANS/MS â&#x20AC;&#x201C; April 4 , 2010. th

Number

Total

Expense

Hospitalizations and Further Hospital Services

Number

Group Dentistry

Number

Therapies

214

Group Medicine

Expense

Number

10,691,619 196,592,436,45

Expense

288,676,485 19,290,128,850,57

Supplementary Health Segment Number of Events by Modality Item Medical Appointments Allergy and Immunology Angiology Cardiology General Surgery Medical Clinic Dermatology Endocrinology Physiotherapy Gastroenterology Gynaecology Hematology Mastology Nephrology Neurosurgery Neurology Obstetrics Ophthalmology Oncology Otorhinolaryngology Pediatrics Proctology Psychiatry Rheumatology Tisio-Pneumology Traumatology and Orthopaedics Urology Other

Group Medicine

Insurance Companies

Total FenaSaĂşde

204,629 275,748 964,452 175,834 3,919,386 1,208,586 794,533 80,433 510,010 2,037,552 29,510 332,495 19,720 159,569 367,928 509,568 1,100,400 54,346 828,950 2,181,449 72,015 226,693 158,562 172,125

169,147 124,178 715,022 186,763 6,619,898 1,109,547 538,791 11,603 327,202 1,475,306 34,069 24,850 33,839 53,510 220,857 458,071 1,136,195 65,188 608,935 1,376,304 64,878 144,170 100,116 129,015

373,776 399,926 1,679,474 362,597 10,539,284 2,318,133 1,333,324 92,036 837,212 3,512,858 63,579 357,345 53,559 213,079 588,785 967,639 2,236,595 119,534 1,437,885 3,557,753 136,893 370,863 258,678 301,140

1,451,157

1,200,895

2,652,052

469,231 17,183,713

360,828 9,213,136

830,059 26,396,849

Source: Products Information System /ANS/MS â&#x20AC;&#x201C; March 19th, 2010

215

Supplementary Health Segment Number of Events by Modality Item

Group Medicine

Insurance Companies

Total FenaSaúde

2,204,423

2,575,155

55,285

4,815

60,100

Ossium Densitometry

231,689

416,131

647,820

Echocardiography

550,655

579,936

1,130,591

Echocardiogram

967,855

1,310,021

2,277,876

Airways Endoscopy

156,876

222,812

379,688

Endoscopy – Upper Digestive

393,487

452,897

846,384

Endoscopy – Lower Digestive

237,986

169,265

407,251

9,084

7,373

16,457

Holter

115,487

88,226

203,713

Mammography

577,874

569,496

1,147,370

Examinations Anatomopatology and Cytopatology Angiography

Hemodynamics

4,779,578

Nuclear Medicine

514,552

2,889,311

3,403,863

Clinical Pathology

49,959,662

47,936,561

97,896,223

Radiodiagnosis

4,225,615

4,657,862

8,883,477

Nuclear Magnetic Resonance

473,906

649,122

1,123,028

Ergometric Test

397,182

314,263

711,445

Computed Tomography

556,519

782,252

1,338,771

Ultrasonography

4,222,911

3,466,459

7,689,370

Cardiocography

29,175

32,032

61,207

5,951,326

7,265,063

13,216,389

Physiotherapy

5,710,659

6,654,744

12,365,403

Hemotherapy

141,932

120,780

262,712

6,224

8,413

14,637

Chemotherapy

72,657

144,516

217,173

Interventional Radiology

21,047

14,598

35,645

Radiotherapy

262,696

253,160

515,856

Substitutive Renal Therapy

162,892

40,271

203,163

Psychotherapy

318,225

526,747

844,972

2,226,447

1,221,581

3,448,028

Others Therapies

Extracorporeal Lithotripsy

Others Hospitalizations Surgery

556,220

317,041

873,261

1,221,272

191,264

1,412,536

Obstetrics

288,302

71,114

359,416

Pediatrics

203,710

44,286

247,996

Psychiatry

8,867

2,700

11,567

Neonatal

22,388

11,890

34,278

Infantile

36,855

85,062

121,917

209,192

537,389

746,581

Clinic

ICU Daily

Adult

Source: Products Information System /ANS/MS – March 19th, 2010

216

Capitalization Segment Outstanding Presence in the Sustainable Development Policy of the Country This is a segment that has been presented a large increase because of the improvement in the Brazilian people revenue, particularly amongst the consumers of the C and D classes. In addition to the savings feature of the capitalization, and also the ludic feature of the drawings, it has been drawn the attention of several new consumers. Capitalization is an instrument that, used individually or associated with other market mechanisms, enables the development of solutions for the different types of demands from society and is accessible to the most diverse publics.

The percentages addressed to drawings and surrenders vary from a plan to another, due to its objectives. Thus, certain plans give more emphasis to the drawing, while other plans, without giving up the reward, aim the constitution of a large reserve. The income of Capitalization market amounted to R$11,780 billion in 2010, representing growth of 16.6% before the income of 2009, that amounted to R$10,104 billion. Looking back, if we compare to the 2005 performance, the progress was even more expressive: 70.48%.

The bonds may be acquired cash (single payment) or in installments (monthly payment).

Also the equity followed the same increase, achieving R$6,182 billion in 2010, 5.22% above the accumulated in 2009, that amounted to R$5,875 billion.

Part of each value paid is addressed to the drawings and part to the constitution of a fund for the surrender, according to the predetermined terms.

The volume that returned to society, as surrenders and drawings, represented 70% of the segment income, amounting to R$8,1 billion.

217

Capitalization Segment

Reserves The technical reserves of this segment amounted to R$ 17,254 billion in 2010, 15.5% above 2009, accounting R$ 14,937 billion. The reserves of the Capitalization segment â&#x20AC;&#x201C; as well those from other segments of the insurance market â&#x20AC;&#x201C;, give support to consolidate and strength the Brazilian savings.

Reserves from the Capitalization Bonds Values in R$ million

17,254 14,937

2009

218

2010

Capitalization Segment

Drawings and Surrenders In 2010 have been surrendered 1,042 billion of bonds, in the amount of R$7,589 billion and have been awarded in drawings 341 thousand bonds, achieving the amount of R$ 602,9 million.

Return to Society 7%

93% Bonds Drawn Bonds Surrendered

Bonds Drawn and Surrendered Bonds Bonds Surrendered Bonds Drawn Total

R$ Million 7,589,230 602,947 8,192,177

% 92.64% 7.36% 100% Source: SISCORP

219

Coordination and Implementation

Text coordination Social Balance Sheet: Ă&#x201A;ngela Cunha Co-operation: Sonia Araripe

Coordination and Graphic Design

COMUNICAÇÃO E PUBLICIDADE

Rua Senador Dantas, 74 - 11º andar Centro - CEP 20031-205 - Rio de Janeiro - RJ Phone: 55 21 2510-7777 - Fax: 55 21 2510-7844 www.cnseg.org.br Representative office in Brasilia SCN - Quadra 1- bloco C Ed Brasília Trade Center - salas 1607/1608 CEP 70711- 902 - Brasília - DF Phone: 55 61 3326-4399/3328-9399/3328-2838 Fax: (61) 3328-1904