On May 14, 2020, SUSEP Circular No. 603/2020 was published, providing for the operational procedures to be observed for contracting insurance abroad.
Until now, the subject was defined by Circular No. 392/2009, which also dealt with the contracting of insurance in foreign currency.
The new Circular maintains the restriction on contracting insurance only for the cases provided for in Resolution CNSP No. 197/2008 and reiterates the right of the Superintendence of Private Insurance (SUSEP) to require from the insured or intermediary to present documentation related to contracting concerning risks for which coverage had not been obtained in the country, which are:
i. Copy of queries made to at least 5 (five) Brazilian insurance companies operating in the line in which the risk falls; queries must be the same, for all insurers;
ii. Copy of the documents issued by the insurers mentioned in the previous item, with the respective negative for insurance coverage, with the presented justification for the positioning; and
iii. Copy of the query made to the insurance company abroad, with the same terms as those made to the national insurers.
At this point, the regulation has changed the previous provision to decrease the number of required queries to Brazilian insurers, from 10 (ten) to 5 (five) and suppressed the need for sworn translation for queries made with insurers abroad.
Still regarding queries that must be carried out, the Circular provides that, if there are not 5 (five) insurers operating in the insurance line in which the risk falls, all those operating in the respective line must be consulted.
In addition, the negative coverage due to lack of information should not be considered, as well as queries made to Brazilian insurers at a date after the policy commences, or that have not issued premiums in that line in the last 12 (twelve) months.
If requested by SUSEP, the insured or intermediary must present proof that the insurance contracted abroad was subject to an international agreement endorsed by the National Congress.
For hull, machinery and civil liability insurances for vessels registered at the Brazilian Special Registry (REB), the documentation requirements have other requisites provided for in the Circular.
The new regulation also determines that the contracting of insurance abroad to cover risks abroad and due to lack of coverage in Brazil must be informed to SUSEP within 60 (sixty) days counted from the beginning of the risk term, according to models in the annexes I and II of the Circular.
In addition, it provides that the insured and its intermediary, when domiciled or resident in Brazil, will be subject to the penalties provided for in specific regulation in the case of contracting insurance abroad that is not in accordance with the provisions of the Circular.
Furthermore, the new regulation defines that intervention in litigations related to insurance contracted abroad will not be under the competence of SUSEP.
Lastly, it is worth noting that the documentation related to contracting insurance abroad must be kept available for SUSEP, by the insured and its intermediary, for a period of 5 (five) years after expiration of the risk term, without losses of distinct deadlines required by other control bodies.
SUSEP Circular No. 603/2020 will take effect on June 1, 2020, repealing SUSEP Circular No. 392/2009.
Demarest’s Insurance and Reinsurance team is entirely available to provide any clarifications on the subject.