Insurance laws Brazil
Insurance laws in Brazil are governed by a multi-layered legal framework that has recently undergone significant changes. The main regulatory bodies are the National Council of Private Insurance (CNSP) and the Superintendence of Private Insurance (SUSEP).
Here's a breakdown of the key aspects of insurance law in Brazil:
Regulatory Framework
National Council of Private Insurance (CNSP): This is the highest authority, responsible for setting the overall policy and guidelines for the private insurance market.
Superintendence of Private Insurance (SUSEP): An autonomous government agency that acts as the supervisor and enforcer of the CNSP's policies. It is responsible for inspecting insurance, reinsurance, and capitalization companies.
Other Bodies: The National Regulatory Agency for Private Health Insurance and Plans (ANS) specifically regulates the health insurance industry.
Key Legislation and Recent Changes
Brazil's insurance law has been significantly modernized with the enactment of Law No. 15,040/2024, which became law on December 9, 2024, and is expected to take full effect one year after its publication. This new law revokes and replaces outdated provisions in the Brazilian Civil Code and introduces a comprehensive legal framework for insurance contracts.
Key features of this new law include:
Increased Clarity and Transparency: The law requires insurers to clearly define the risks and events excluded from policies, providing greater legal certainty for the insured.
Deadlines for Claim Settlement: Insurers must now respond to a claim within 30 days, with a possible extension to a maximum of 120 days for more complex cases.
Consumer Protection: It strengthens consumer protections, such as prohibiting insurers from unilaterally canceling contracts. The law also favors the continuation of a contract in favor of the insured.
Significant Risk Aggravation: The law defines the concept of "significant increase of risk," requiring the insured to notify the insurer of such changes.
Tacit Acceptance: The law establishes that a proposal for a contract is considered accepted if the insurer does not provide a reasoned refusal within 25 days.
Reinsurance: The new law also impacts reinsurance contracts, including rules on tacit acceptance of reinsurance proposals, a one-year statute of limitations for disputes, and provisions for direct payment to the insured in case of the insurer's insolvency.
Insurance and Reinsurance
Domestic vs. Foreign Insurance: Generally, insurance policies for risks located in Brazil must be issued by a domestic company. Exceptions exist if the local market is unable to underwrite the risk. In such cases, the insured must prove that at least five local insurers have refused the coverage.
Reinsurance: The reinsurance market in Brazil was opened to private enterprise in 2007. The law categorizes reinsurers into three groups: local, admitted (foreign companies with a local office), and eventual (international companies). Local reinsurers have a preferential right to underwrite a portion of the reinsurance business.
Important Principles
Insurance Contract Features: The Brazilian Civil Code outlines the essential features of an insurance contract, which include a guarantee or coverage, insurable interest, risk, and a premium.
Choice of Law and Jurisdiction: The new law specifies that for disputes related to insurance contracts executed in Brazil, Brazilian law applies, and Brazilian courts have absolute jurisdiction. While parties can choose arbitration for disputes between insurers and reinsurers, recent laws have raised questions about the full extent of this autonomy.
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