SUSEP Circular No. 637/2021: consolidation and simplification of rules applicable to liability insurance

On July 7, 2021, SUSEP Circular No. 637/2021 was published, providing new rules for insurance liabilities group, with the purpose to introduce some flexibility into the drafting of clauses.

Among the changes made, we highlight the most relevant:

  • Regulation of civil liability insurance on claims based on first statement or discovery;
  • Creation of a new cover trigger: in addition to court and arbitral decisions, the administrative decision of the Government may be used as a trigger to motivate the payment of compensation by the insurer. Furthermore, the new rule waives the prior need of a final decision for payment of the compensation by the insurer;
  • Possibility of insurance commercialization without the provision of an aggregate limit (LA) for each cover, allowing the insured to use the entire maximum limit of indemnity (LMI) in different covers, according to their interest;
  • Explicit provision about the possibility of coverage for fines and penalties imposed on the insured in all kinds of civil liability insurance;
  • Additional Term: previously called Complementary Term and Supplementary Term, they were replaced by the definition Additional Term, corresponding to the extraordinary period in which the claims submitted to the insured by third parties will be covered;
  • Possibility to offer network of professionals referred by the insurer in the case of hiring coverage for defense costs;
  • Authorization to contract any civil liability policy, including Directors and Officers Liability Insurance (D&O), based on occurrences; and
  • Waiver of the mandatory one-year minimum term for claims-based policy.

SUSEP Circular No. 637/2021 will come into force on September 1, 2021, repealing SUSEP Circulars Nos. 336/2007, 348/2007, 437/2012, 476/2013 and 553/2017.

The entire SUSEP Circular No. 637/2021 can be accessed by this link.

Demarest’s Insurance and Reinsurance team is available to provide any additional clarifications that may be necessary.