Mexico and Brazil on the road to risk-based regulation

Latin American economic powerhouses Brazil and Mexico are introducing new solvency regulations in their fast-growing insurance markets. But while Mexico has gone straight for a Solvency II-type approach, Brazil is emphasising gradualism and will not make the jump to risk-based regulation in the near future. John Rumsey reports

The Mexico and Brazil insurance sectors are ostensibly similar: both are under-developed markets with great potential for growth and conservative regulatory regimes. However, their differences are more marked. While foreign insurers are dominant in Mexico, Brazil has a more domestic, bancassurance-dominated market. Mexico is using European models and a fast rollout for its risk-based solvency regime, while slower-moving Brazil is opting for an approach in line with the International Association