The Brazilian House of Representatives approved on 13th December 2006 Bill No. 249/2005, submitted by the former Brazilian Minister of Finance, Antonio Palocci, to Congress, on 18th May 2005. Such Bill regulates the opening of the reinsurance market, as well as the new role to be played by IRB-Brasil Resseguros S.A. (“IRB”), the State-controlled company currently holding the monopoly of the market. The Bill confirms also the transfer of IRB’s authority to regulate the reinsurance market, originally contemplated by Law No. 9,932/99 to the Brazilian Private Insurance Superintendence (SUSEP). As previously reported by Felsberg e Associados, Law No. 9,932/99 was deemed to be constitutional by the Brazilian Supreme Court (STF) in September 2004, after several years of judicial challenge. In accordance with Bill No. 249/2005, three different types of reinsurance companies shall be authorized to operate in Brazil: (i) local reinsurance companies (companies incorporated in Brazil as corporations, which will exclusively perform reinsurance and retrocession transactions); (ii) admitted reinsurance companies (foreign reinsurance companies with head offices in Brazil which must be enrolled with the respective insurance agency for the purposes of performing reinsurance and retrocession transactions); and (iii) eventual reinsurance companies (foreign reinsurance companies, without head offices in Brazil which must be enrolled with the respective insurance agency for the purposes of performing reinsurance and retrocession transactions). The Bill also establishes that insurance companies must offer to local reinsurance companies the preemptive right to at least: (a) 60% of the assignment of reinsurance in the first three years, as from the date of the effective implementation of a competitive reinsurance market in Brazil; and, thereafter (b) 40% of the assignment of reinsurance as from the fourth to the sixth year. After the sixth year as from the date of the effective implementation of a competitive reinsurance market in Brazil, the amount contemplated in item (b) above may be changed by law (subject always to the maximum of 40% of the assignment of reinsurance). Such Bill will be now analysed and ruled upon by the Brazilian Senate. IRB is the principal reinsurance company in the region and has produced the annual gross turnovers of approximately US$2.8 million in the last few years. However, IRB is still not a very representative reinsurance company in the world (and is ranked 40th largest insurance company in the world). In any event, the Brazilian insurance and reinsurance market is constantly growing. For instance, the volume of premiums increased from (i) 2.5% of the Brazilian GDP in 1995; (ii) 2.98% of the Brazilian GDP in 2000; to (iii) 3.39% of the Brazilian GDP in 2005. Therefore, the opening of the reinsurance market will certainly attract many other insurance and reinsurance companies to the Brazilian market.