BRASILIA (Bloomberg) — Brazil’s Vice-President Jose Alencar yesterday approved a bill to open the country’s reinsurance market to private competition, ending a monopoly held by state- controlled IRB-Brasil Re.The proposed law had been adopted by lawmakers last month and was signed by Alencar because President Luiz Inacio Lula da Silva is out of the country. Brazil’s reinsurance market has been controlled by the state since 1939.

“The new market will be modern, competitive and will allow new companies to arrive,” Alencar said in Brasilia.

The entry of private reinsurance companies will lead to the creation of new products, more efficiency and lower costs for companies, Alencar said.

Brazil’s bid to sell IRB-Brasil in 2000 failed when the Supreme Court ruled the sale unconstitutional, ruling on a challenge brought by Lula’s Workers’ Party before it came to power. At that time, the sale of IRB was part of former President Fernando Henrique Cardoso government’s asset sale programme.

President Lula proposed opening the industry in May 2005.