Mr. Thompson to Mr. Olney.

No. 441.]

Sir: I have the honor to inclose herewith a copy of the regulations promulgated by the minister of the fazenda for the execution of the law recently passed by the National Congress in regard to foreign life insurance companies.

I also inclose an article from the Rio News upon the withdrawal of the New York Life Insurance Company.

I have, etc.,

Thos. L. Thompson
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[Inclosure in No. 441.—Translation.]

Decree No. 2153, of November 1, 1895.

The President of the Republic of the United States of Brazil, in consideration of the provisions of article 10 of law No. 294, of September, this year, regarding the foreign life insurance companies doing business in the territory of Brazil, decrees that the regulations hereto annexed be observed for the faithful execution of said law.

Federal Capital, November 1, 1895, the seventh year of the Republic.

Prudente J. de Moraes Barros.

Fco. de Paula Rodrigues Alves.

Regulations for the enactment of law No. 294 of September 5, 1895, which legislates on foreign life insurance companies and to which above decree No. 2153 of this date refers.

Chapter I.Of the foreign insurance companies.

Article 1. Life insurance companies, which have their social seat in foreign countries, can not operate in Brazil without a previous authorization of the Government, in accordance with the legislation in force and the dispositions of these regulations.

Article 2. The company desiring such authorization must solicit it from the Government through the intermedium of the secretary of the exchequer, accompanying the petition:

With documents proving its legal existence in the country where it has its social seat.
With a copy of its statutes.

Only paragraph: These documents must be legalized by the representative of Brazil, in the country where the company has its social seat, or by the respective consul. The company may further accompany its petition with all such documents as it may deem convenient to establish its rights.

Article 3. When the authorization is granted by a decree of the President of the Republic, the secretary of the exchequer will grant the charter, compiled in the directory of the treasury, signed by the director, and countersigned by the minister.

Only paragraph: Before the company can commence operations, it must file an authentic copy of the charter and a copy of its statutes with the chamber of commerce of the Federal District, and publish them in the Diario Official, in accordance with section 3 of article 47 of decree 434 of September 4, 1891. A failure to do so involves the invalidity of acts performed.

Article 4. In its petition for the charter, the company must assume the obligation to maintain in the city of Rio de Janeiro its principal agency, with full powers to decide all questions that may arise with either private parties or with the Government.

The company must further agree:

  • Sec. 1. To maintain in the capitals of the States, where it intends to accept insurance, an agent with the necessary powers to assume the responsibilities which pertain to the principal agency according to these regulations.
  • Sec. 2. To respect and submit to the Brazilian laws and courts in everything regarding its relation to the Government or to private parties.

Article. 5. After deliberation on the petition for permission to operate in the country, and bearing in mind the condition of the company and the guaranties it offers as to solvency and good administration, the Government will resolve.

Chapter II.Of the operations of the companies.

Article 6. When the principal agency is established in the Federal District and the agents in the State capitals in accordance with article 4, section 1, after receiving the charter and having complied with the conditions contained in the only paragraph of article 3, the foreign life insurance companies may do business in the whole territory of the Republic after having made the deposit required by article 21.

Article 7. The principal agency is obliged, and must have the necessary powers for that purpose, to decide all applications for insurance made in Brazil, rejecting or accepting them, and, in the latter case, to issue the definite policies. (Law, art. 5.)

Only paragraph: If an application has not been rejected within fifteen days after being received at the principal agency, and the agency accepts from the applicant the amount corresponding to the first premium, then the insurance shall have full force though the policy be not yet issued, and the company can no longer reject the risk. (Law, art. 5 already quoted, only paragraph.)

Article 8. The respective agency shall give to the applicant or to the person representing him a receipt, stating date of entry and receipt of the application.

Article 9. The examination and settlement of death claims and of reclamations, made by assured, must also be made and decided by the principal agency in Brazil. (Law, art. 6.)

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Article 10. After deducting from the total amount of premiums received by the companies the sum required for general expenses, death claims, dividends, or other payments to the assured then the remainder shall be invested in national securities, such as bonds of the national debt, debentures guaranteed by the Union, landed property in the territory of the Republic, mortgages on lands and properties, shares of railroad companies, banks, or industrial establishments or others in Brazil, or in deposits for not less than one year in banking establishments operating in the Republic. (Law, arts. 2 and 4.)

Article 11. At the end of every half year, and within the two subsequent months, the companies shall present to the secretary of the exchequer and publish in the Diario Oficial a minute statement of all the premiums received for life insurance risks assumed during the said half year. (Law, art. 7.)

Chapter III.Of the companies which already operated in Brazil before September 5 of this year.

Article 12. The foreign insurance companies which already operated in Brazil before the promulgation of law No. 294 of September 5 this year are obliged:

  • First. To present to the Government through the secretary of the exchequer, and to publish through the press, within sixty days of the promulgation of law No. 294 of September 5 this year, a nominal list of all the insurance risks assumed and in force in the territory of the Republic, indicating with the number of each policy the name of the assured, the amount assured, the annual premium, and the amount of the reserve corresponding to said policy on January 1, 1894. (Law, art. 1.)
  • Second. To invest the total amount of the reserves on all the policies in force in Brazil on that date in national securities, such as bonds of the national debt, stock guaranteed by the Union, landed property in the territory of the Republic, mortgages on lands and properties, shares of railroad companies, banks, and industrial or other establishments in Brazil, or in deposits for not less than one year in banking estabments operating in the Republic. (Law, arts. 2 and 4.)

Article 13. Within the same period of sixty days after the promulgation of the said law No. 294 the said companies shall also prove to the secretary of the exchequer and publish in the press that the total reserves, of which the preceding section 2 speaks, are employed in the manner therein required in order to guarantee inspection by interested parties. (Law, art. 3.)

Article 14. The companies shall further communicate, and within the same period, officially to the secretary of the exchequer that they accept the responsibilities for the obligations prescribed by law No. 294 of September 5 of this year.

Only paragraph: The company which does not make this communication will have its permission to effect new insurance contracts in Brazil canceled, and must restrict itself thereafter to collect the premiums on the risks until then in force and to meet the obligations assumed in accordance with the respective contracts.

Article 15. When the permission of a company to effect new insurance is once canceled by virtue of the preceding paragraph and the company decide later to submit to the obligations of the law and of these regulations, it must petition the Government, in accordance with Chapter I, for a new authorization to operate, making a new guarantee deposit in the treasury. (Law, art. 9.)

Article 16. The company which, without a new authorization and given the hypothesis of article 14, only paragraph, accept new insurance contracts, shall deposit in the treasury 10 per cent of the premiums it has collected on such new business until it has petitioned for and obtained such authorization.

Only paragraph: If the company should refuse to make such deposit within fifteen days after receiving an intimation from the investigating committee of the treasury, then the amount due will be deducted from the deposit which the company may have in the treasury. (Law, art. 9, only paragraph.)

Article 17. The company which has thus violated the law can not obtain a new charter for operations in Brazil.

Chapter IV.Of the control.

Article 18. Whenever the minister of the exchequer considers it necessary, he may order some of his confidential employees to proceed to a minute examination of the accounting department, etc, of the foreign insurance companies, in order to verify whether everything is kept with the necessary regularity, whether the companies observe all the provisions of the law and of these regulations, as also whether the statements made in their reports, balance sheets, and official communications are exact.

Article 19. Having made such examination, the employees that were in charge of it shall make a detailed report to the minister of the exchequer, who, after submitting it to the investigating committee of the treasury for study, will adopt the measures he may deem convenient.

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Chapter V.General dispositions.

Article 20. When the authorization for operating in the territory of the Republic has been granted to a foreign insurance company, the charter will not be issued until the company has deposited in the federal treasury on an order of the investigating committee the amount of 200,000$000 in currency or in bonds of the public debt as a guarantee for the contracted obligations.

Article 21. If that deposit should at any time be diminished by the application of some legal decision, the company is obliged to cover the deficiency immediately under penalty of not being allowed to continue its operations.

Article 22. The decree of authorization and the charter, mentioned in article 3 of these regulations, must contain the explicit declaration that the respective company, when establishing its principal agency in the Federal District and agencies in the State capitals, where it intends to contract insurance, all with the necessary powers, submits without reserve to the laws and courts of Brazil in all its relations to the Government and to private parties.

Article 23. Under penalty of having its authorization for operating canceled, the company can not alter any disposition of its statutes to take effect in Brazil without a permission from the Government, in accordance with the respective provisions of decree No. 434, of July 4, 1891.

Article 24. In the case foreseen by these regulations, that the companies which already operate in Brazil before September 5 last should desire a new concession, it may be granted to them under the same conditions and with the same formalities as are required in regard to the companies which establish themselves for the first time in Brazil.

Article 25. The conversion of the reserves, of which article 10 speaks, of the companies which may establish themselves after these regulations will be made proportionately as the insurance premiums are being collected, so that the dispositions of article 7 of the law and article 11 of these regulations may be complied with.

Article 26. The concession granted to companies to operate in the country may also be canceled:

  • First. If they refuse to present their books and documents for examination by the comptrollers of the Government.
  • Second. If they should make false declarations in their statements, balance sheets, and other official communications with the intention of evading the obligations imposed by the law and the present regulations.

Article 27. The companies are obliged to communicate in this capital to the investigating committee of the treasury, and in the States to the fiscal delegates or to the custom-houses, the names of their agents, the place in which the agencies are established, and the alterations occurring thereafter.

Article 28. All dispositions to the contrary are herewith revoked.

Francisco de Paula Rodrigues Alves