1. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 1 LIFE INSURANCE PRODUCT TAXATION- IMPLICATIONS FOR THE DEVELOPMENT OF THE MARKETS MARCOS ANTONIO SIMÕES PERES mperes@susep.gov.br mperes@susep.gov.br

2. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 2  1995: first steps to incentive the annuities sales.  Pension products.  Legal Entity: deduction up to 20% at the time of the the determination of the taxable book income ( ie.adjusted net income less permitted deductions and amortizations)  Natural person: deduction up to 12% of the gross taxable income for the fiscal year.

3. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 3 Annuties  Important Aspects to be observed.  Complete tax statement x Simplified Tax statement.  “Tax incentive” or just postponed the tax payment.  Contribuitons over the maximum tax deduction limit – 12%.

4. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 4 Annuties  2001: the turn of the life insurance products.  Tax Treatment: at the time of the surrender, only the income are subjected to the taxation.  Income: the portion of the benefits exceeding the aggregate amount of premiums paid.  IOF(Financial Transaction´s Tax) – 0%.

5. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 5 Annuties Annuties  Conclusions  Different taxation: specific public.  Complete Tax Statement x Simplified Tax Statement.  Deductible limit.

6. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 6 Annuities Annuities  2004: new tax regime  Tax incentive.  Two options:progressive tax rates(15% and 27,5%)or tax table Accumulation Period Untill 2 years from 2 to 4 years from 4 to 6 years from 6 to 8 years From 8 to 10 years Over 10 years Tax rate 35%30%25%20%15%10%

7. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 7 Source: SUSEP Values in Billions of Reais

8. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 8 Source: SUSEP Values in Billions of Reais

9. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 9 Death and disability benefits  IOF (Financial Transaction´s Tax)  Until 1998 – 2%  From 01/99 to 08/04 – 7%  From 09/04 to 08/05 – 4%  From 09/05 to 08/06 – 2%  At this moment – 0%

10. VIII Conference on Insurance Regulation and Supervision in Latin America Superintendence of Private Insurance SUSEP 10 Source: SUSEP Values in Billions of Reais