The Government of Brazil reserves the right to refuse entry of managers or executives associated with providing a service if they do not provide new technology, increase productivity in Brazil, or attract new investment. This denies U.S. marine cargo insurers an opportunity to compete for business. Furthermore, the Government of Brazil has granted no new authorizations to transact insurance since 1966. Requirements for withholding insurance premiums and outstanding loss reserves also expose U.S. reinsurers to serious exchange losses. Brazilian regulatory policy precludes the issuance of new licenses.
Brazil is South America's largest potential insurance market.
The United States continues to seek improved market access for trade in insurance and other service industries. Even with these restrictions, many U.S. and foreign firms have major investments in Brazil. Furthermore, the new Brazilian Administration has indicated its interest in eliminating, or reducing, limitations on foreign investment in various sectors. The proposed constitutional amendments which the government submitted to the Congress in February 1995, when ratified, may open the petroleum, telecommunications, natural gas exploration, mining and coastal shipping sectors to foreign investment. In other sectors Brazil limits foreign equity participation, imposes local content requirements, and links incentives to export performance requirements.