New rules on acceptance, validity, issuance and minimum required elements in contractual documents

On September 20, 2021, SUSEP Circular No. 642/202 was published, establishing new rules on acceptance, validity period, issuance and minimum required elements that must be included in contractual documents, which formed the scope of SUSEP Public Consultation Notice No. 22/2021.

The Circular 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 SUSEP Circular Letter/DIRAT/CGPRO Nos. 7/2012, 2/2014 and 3/2014.

Among the main changes proposed by the Circular, the following are highlighted, in terms of:

Acceptance of insurance proposal:

• The establishment of a maximum period of 15 (fifteen) days for risk analysis and acceptance falls away, as well as tacit acceptance in the absence of a response within the 15-day period. Now, the insurer may freely establish the maximum period for acceptance and refusal according to the risk and the type of product, whose period must be fixed in the proposal and in the contractual conditions, accompanied by the scenarios in which such period will result in suspension;
• If the proposal and the contractual conditions do not stipulate tacit acceptance of the risk within the deadline established, the absence of an express statement on the result of the analysis shall be understood as a refusal, subjecting the insurer to the applicable administrative penalties;
• Requirement to fill in the required information and sign the proposal also in cases of non-automatic renewals, whether by the applicant, legal representative or insurance broker, except for contracts executed through a simplified policy;
• If the proposal is accepted and the deadline for acceptance of the proposal is greater than 15 days, it is forbidden to charge a premium without confirmation of maintenance of interest and express authorization by the applicant;
• The total or partial collection of the premium before the acceptance of the proposal is only allowed in the event of offering provisional coverage to the proponent, for claims occurring during the analysis of the proposal, and provided that it is requested by the proponent;
• Obligation for the proposal to indicate the effective date of the insurance, or the criteria for its determination, which may coincide with the date of its acceptance.

Validity period of insurance

• In the absence of an express indication of the start and end period of the insurance term, the time of midnight (00:00) will apply for start and end dates.

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

• The issuance and sending and/or making available of contractual documents to the Insured may be carried out by physical means or remotely, within fifteen days of the proposal acceptance. The making available of the documents must be preceded by communication to the Insured and the use of remote means must ensure the possibility of printing or downloading the document by the client;
• In the case of issuing simplified policies, sending or making them available to the Insured, by physical or remote means, must take place in a timely manner.
• Charges related to the costs of issuing contractual documents, recovering and monitoring credits, maintaining records or other administrative costs separate from the risk premium are prohibited.

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

• Consolidation of the provisions regarding the minimum elements that must be included in the contractual documents, under the terms of articles 17 to 19;
• Inclusion of the link to the official digital platform for registering consumer complaints in supervised markets (consumidor.gov.br);
• If the technical structuring of the insurance plan provides for the establishment of guarantee or insured capital maximum limits shared between coverages, then information on the premium values, in the case of combined pricing, deductibles, maximum guarantee limits or maximum insured capital limits may be provided jointly in the contractual documents, provided that the rules on accounting for coverage in insurance lines and other specific regulations are observed.
• The rules covered in this current section do no apply to mandatory insurance products that already have their own models of contractual documents defined by specific regulations.

Finally, the Circular establishes that its provisions are optionally applicable to the contracting of damage insurance to cover large risks.

The Circular come into force on October 1, 2021, and its full text can be accessed at this link.

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