SUSEP Public Consultation Notices No. 41 and 42/2021: new rules for personal insurance

The Superintendence of Private Insurance (SUSEP) placed for public consultation Notices No. 41 and 42/2021, presenting drafts of the CNSP Resolution and SUSEP Circular that introduce new rules on the regulation of personal insurance that includes risk coverage.

Following on from the regulatory standards review schedule, and as exemplified by what has already been carried out in the field of Damage Insurance, the proposed changes aim for the regulatory norms and standards to be more principled and less prescriptive, in order to allow more competition and innovation in the sector.

At the current time, the proposed revision targets the updating of life insurance rules only, that is, products characterized by the non-survival of the Insured to trigger the coverage. Products that have survivorship coverage will, therefore, follow the specific regulation that already exists.

We highlight the following main rules proposed by the Notices:

• Exemption from prior registration of the actuarial technical note of personal insurance plans that include risk coverage, and which is compulsory only for insurance plans with coverage structured in the financial system of capitalization and/or distribution of coverage capital;
• Repeal of the limitation, as a general rule, on the combination of coverages from different insurance lines, so that any restrictions will be dealt with according to specific rules, if applicable;
• Simplification of the rules for adding dependents of the Insured;
• Provision that the payment of indemnity may occur, in addition to payment in cash and reimbursement, in the form of provision of services, and that the referenced network of providers of the Insurer must be kept updated on the Insurer’s website;
• Exclusion of the prohibition on issuing insurance in foreign currency, being maintained only for insurance that provides for the formation of a mathematical provision;
• Alteration of the definition of “personal accidents”, with exclusion from the list of events that are classified or not as such;
• Exclusion of the cap on the maximum interest rate;
• Exclusion of provisions on biometric tables and product pricing, once the Insurers have pricing freedom;
• Inclusion of specific rules on personal accident insurance for passengers;
• Regulation of personal accident insurance for cases in which there is no previous knowledge of the identity of the people exposed to risks during the period of stay in specific spaces, such as on highways, events, exhibitions, shows, etc.;
• Alteration of the rules on the omission of pre-existing illnesses and provision for the exceptional possibility of exclusion of coverage for specific pre-existing illnesses declared by the Insured, in the event of express agreement between the parties;
• Inclusion of a provision indicating that states of mental insanity, inebriation, and the use of intoxicating substances by the Insured are not considered an aggravation of risk for purposes of loss of the right to coverage; and
• Provision for waiver of the need for the Insured to fill out a new application proposal in the case of non-contributory insurance stipulated by an employer in favor of its employees.

Furthermore, the new Rules also introduce a specific proposal for life insurance for security guards, highlighting the (i) non-fixing of limits on the amount of capital insured; and (ii) the determination of mandatory coverage for death by natural and accidental causes, without prejudice to the contracting of other coverage in favor of the security guard.

Finally, since the draft Circular proposes the repeal of SUSEP Circular 302/2005, the table for calculation of indemnity in the event of permanent incapacity will also be repealed. In this way, since it is not the responsibility of the regulator to fix percentages, the Insurer may freely establish the scope of its coverage and, if necessary, use its own tables.

Considering the intention to unify sparse rules, the Drafts will repeal (i) CNSP Resolution Nos. 05/1984, 117/2004, 129/2005, 130/2005, 137/2005, 315/2014, 329/2015, 352/2017 and 365/2018, (ii) SUSEP Circular Nos. 302/2005, 316/2006, 317/2006, 516/2015 and Chapter II of Circular No. 535/2016; and (iii) Circular Letters Susep/DETEC No. 08/2007, SUSEP/DETEC/GAB No. 01/2009 and Susep/CGPRO No. 02/2011.

The full draft Resolution can be accessed at this link and Circular at this link, and interested parties may send comments or suggestions on the text by electronic message addressed to copep.rj@susep.gov.br, in accordance with the specific standardized chart filled out (Resolution) / (Circular), by December 10, 2021.

Demarest’s Insurance and Reinsurance team is closely monitoring the development of these public consultations through to the publication of the final version and makes itself entirely available to provide any clarifications on the subject.