SUSEP Public Consultation No. 22/2021: New rules on acceptance, validity, as well as issuance and minimum required elements on contractual documents

On June 15, 2021, the Superintendence of Private Insurance (SUSEP) placed for public consultation Public Notice No 22/2021, presenting a draft Circular (“Draft”) that aims to consolidate and systematize the rules on acceptance, validity as well as issuance and minimal required elements that must be included in contractual documents.

The Draft establishes amendments to SUSEP Circular No. 535/2018, and repeals SUSEP Circular Nos. 251/2004, 394/2009, 491/2014, 505/2014, 513/2015, 592/2019 and Circular Letter SUSEP/DIRAT/CGPRO Nos. 7/2012, 2/2014 and 3/2014.  

The proposed Circular is structured into six chapters, which are: (i) initial provisions, with the basic concepts; (ii) acceptance of the insurance proposal; (iii) validity of the insurance; (iv) issuance of policy, endorsement, individual certificate and/or simplified policy legal document (“bilhete de seguro”); v) minimum required elements of policies, policy annotation, individual certificates, simplified policies and endorsements; and (vi) final provisions. Among the main proposed amendments are:

• Acceptance of insurance proposal

1. 1. Requirement to fill out and sign the proposal also in cases of non-automatic renewals, which is not provided for under article 1 of SUSEP Circular No. 251/2004. Such requirement is justified by the necessity to re-examine the essential elements for risk acceptance.
   2. Suppression of the maximum regulatory period of 15 (fifteen) days for Insurers to respond to the proposal, under penalty of tacit acceptance. The proposal and the contractual conditions must establish this period, as well as provide for the possibility of its suspension, in a clear and distinct manner.
   3. Requirement of the Insurer’s express statement regarding the proposal, either by acceptance or by refusal, changing the tacit acceptance rule currently in force. Unlike the current rule, the Draft provides that, if the Insurer does not respond within the agreed period, the proposal will lose its validity and the Insurer will be subject to the applicable administrative penalties, as well as its ability to take out insurance abroad being denied (SUSEP Circular No. 603/2020). Furthermore, the express communication of the acceptance may be replaced by (i) issuing, sending or making available the policy or individual certificate; or (ii) collection of the risk premium, even if partial.
   4. Obligation for the proposal to indicate the effective date of the insurance, or the criteria for its determination, which may or may not coincide with the date of its acceptance.

• Validity of insurance

1. 1. Proposal for standardizing the criteria for establishing the date and time for the commencement and termination of the validity of insurance, based on the parameter established in article 7 of SUSEP Circular No. 592/2019. In the absence of an indication of time, the starting and ending time of the period will be set at midnight (00:00) on the respective dates, in accordance with the residual rule provided for in article 5 of SUSEP Circular No. 251/2004.
   2. Exemption from the requirement of typographic highlighting of the trading name of insurance plans with an intermittent coverage period.

• Issuance of policy, endorsement, individual certificate and/or simplified policy

1. 1. Exemption from issuing and delivering documents to the Insured, simply by providing them remotely. When only the documents are made available, the Insured must be informed of such fact through a competent means. And, in the case of issuing and sending documents, the current rule is maintained regarding the period of up to fifteen days, counted from the acceptance of the proposal.
   2. In the case of issuing simplified policies, the dispatch or availability to the Insured must take place in a timely manner.
   3. Prohibition of charging the costs of issuing contractual documents (policy, registration policy, individual certificate, endorsement and simplified policy) separately from the risk premium.

• Minimum required elements of policies, registration policies, individual certificates, simplified policies and endorsements

1. 1. Consolidation of the provisions regarding the minimum elements that must be included in the contractual documents.
   2. Referral to the SUSEP channel for registration of consumer complaints on the “consumidor.gov.br” platform.
   3. If the technical structuring of the insurance plan provides for the establishment of maximum guarantee limits or insured capital shared between coverages, information on the risk premium values, in the case of combined pricing, deductibles, maximum guarantee limits or insured capital, can be provided jointly in the contractual documents, provided that the rules on accounting for coverage in insurance lines and other specific regulations are observed.
   4. Application of the rules of this section to mandatory insurances that have already their own models of contractual documents defined by specific regulations is waived.
      

Finally, the Draft provides that (i) the general rules of the Circular are of optional application to the contracting of damage insurance to cover large risks; (ii) the provision of other simplified informational documents and materials is allowed, in order to complement the mandatory contractual documents, in order to transmit the most relevant information to the Insured.

The full draft Circular can be accessed at this link. Interested parties can send comments or suggestions to the text through an electronic message addressed to cgres.rj@susep.gov.br, until July 15, 2021, using the specific standardized table available on the SUSEP page.

Demarest’s Insurance and Reinsurance team will monitor the development of this public consultation up to the publication of the final version of the text, remaining at your disposal to provide any clarifications on the matter.