On October 6, the Superintendence of Private Insurance (SUSEP) published a Circular that intends to simplify certain rules for regulating the standards and criteria for insurance operations that fall within the Property Group.
The proposal, which has now been submitted for public consultation, revises and consolidates the SUSEP Circulars that provide for insurance plans within the Property Group insurance lines considered massified, such as (i) comprehensive insurance; (ii) loss of profit insurance; (iii) engineering risks insurance; and (iv) multiple-peril insurance.
It its important to highlight that the extended guarantee insurances are clearly excluded from this list, since it has specific regulation.
In the category of the comprehensive insurance, the rules divide the group into homeowners (residential), commercial multiple-peril and condominium multiple-peril, the latter currently regulated by CNSP Resolution No. 218, of December 6, 2010.
Such rule provides for the condominium multiple-peril insurance modalities that will be available for the industry (simple basic coverage or broad basic coverage).
Regarding the engineering risks insurance to be offered in the mass market insurance segment, the rules establish a minimum list of elements to be provided for under contractual conditions.
In addition, it is important to clarify that the aforementioned proposal is an express continuation of Public Consultation No. 16/2020, which deals with the relaxing of regulations related to the mass market insurance segment.
Therefore, based on the assumption that there is a perception of an excess of regulation in the insurance industry in Brazil, the draft Circular reinforces that the regulatory simplification agenda has been gaining ground.
Additionally, it is worth noting that, beyond meeting the guidelines of the recently approved Strategic Planning 2020-2023 of SUSEP, which aims to simplify the regulation of the insurance industry in order to develop the market, the proposal is in line with the Economic Freedom Law (Law No. 13.874).
Finally, it should be noted that the Public Consultation will be open for suggestions until the November 5, 2020.
Demarest’s Insurance and Reinsurance team will continue to follow the development of this Public Consultation until publication of the final text and is available to provide any clarifications on the subject.