AM Best, the credit rating agency, states that Brazil’s sweeping reforms to its insurance regulatory framework represent a major institutional shift, steering the country’s insurance market toward greater professionalism, stronger consumer safeguards, and closer alignment with international standards.
Citing the International Monetary Fund, AM Best notes that Brazil’s real GDP growth is expected to slow to 2.0% in 2025 from 3.4% in 2024, while inflation is projected to rise from 4.4% to 5.3% over the same period.
According to Ann Modica, Director, Credit Rating Criteria, Research and Analytics at AM Best, “High interest rates, fiscal rigor, and global trade headwinds are constraining growth and limiting the government’s policy flexibility.”
AM Best highlights that a key element of Brazil’s regulatory overhaul is the new Insurance Contract Law (Law No. 15.040/2024), which replaces outdated provisions with a modern legal framework for insurance agreements.
Set to take effect in December 2025, the law introduces stricter timelines for insurer and reinsurer responses, improves claims transparency, and restricts unilateral policy cancellations.
AM Best notes that the law also limits the ability to apply foreign law and jurisdictions in insurance and reinsurance disputes, a change that could reshape how international contracts are structured.
Further, AM Best points out that other enacted reforms address the regulation of mutual societies and cooperatives, enhance risk oversight through the adoption of Own Risk and Solvency Assessment (ORSA) requirements, and strengthen operational and governance rules for brokers and loss adjusters.
AM Best concludes that market participants will need to move quickly to update their legal, operational, and governance frameworks to ensure compliance with the evolving regulatory landscape.
“Taken together, these legal and institutional shifts represent a turning point for Brazil’s insurance market as they aim to broaden market access and deepen financial inclusion while introducing solvency and governance standards proportionate to the size and nature of these organisations,” added David Lopes, Senior Industry Analyst, Industry Research and Analytics, AM Best.
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