On 31st March, 2021, the Brazilian Private Insurance Superintendence (Susep) issued Resolution CNSP No. 407/2021, which regulates general principles and characteristics for drafting and selling large risks coverage insurance contracts. The new norm, in tandem with Circular Letter No. 621/2021, aims to segregate insurance regulation for large risks coverage and massified insurance lines, given their unique complexity. The modification aims to deregulate the sector, increase the number of products being offered, amplify insurance coverage in Brazil and, consequently, reduce policy costs.
The new large risks insurance regulation will provide greater negotiation freedom to the market by ending the need to register information with Susep. This will ensure greater flexibility for insurance companies and will stimulate innovation.
Based on the nature of different types of insurance, the norm defines as large risks: oil risks, specified and all risks, banking, aeronautical, maritime and nuclear risks. Susep also included the internal credit and export credit risks group when the insured are corporate entities.
The other lines of damage liability insurance may be classified as high risk contracts when the maximum guaranteed limit (LMG) exceeds R$15,000,000.00 (fifteen million reais); or when, in the preceding financial year, the contractor recorded total assets in excess of R$27,000,000.00 (twenty-seven million reais) or gross annual revenue in excess of R$57,000,000.00 (fifty-seven million reais).
As a result, the new norm promotes streamlined procedures for insurance company operations, thereby reducing bureaucracy in the sector and stimulating a more agile process of contracting policies.