CIRCULAR SUSEP NO. 662, OF 11.04.2022 * (versão em inglês/LegisMap)
Surety Insurance Provisions.
The SUPERINTENDENT OF THE SUPERINTENDENCY OF PRIVATE INSURANCE - SUSEP, in the use of the powers granted by art. 36, sub items "b" and "c", of Decree-Law 73, of 21 November 1966, considering the provisions of Decree 10.139, of 28 November 2019, and the contents of Susep File No. 15414.603660/2020-12, resolves:
Art. 1. Toestablish rules and criteria for the preparation and commercialization of Surety Insurance plans.
CHAPTER I
DEFINITIONS
Art. 2. For the purposes of this Circular it is defined:
I - type: set of clauses that establish the specific provisions of the Surety Insurance according to the characteristics, provisions and legislation of the guaranteed obligation;
II - main object: legal relationship, whether contractual, bid noticing, procedural or of any other nature, generating obligations and rights between the obligee and the principal, regardless of the denomination used;
III - guaranteed obligation: obligation assumed by the principal with the obligee in the main object and guaranteed by the Surety Insurance policy;
IV - obligee: creditor of the obligations assumed by the principal in the main object;
V - Surety Insurance: insurance aimed at guaranteeing the true compliance of the guaranteed obligations;
VI - Surety Insurance: Obligee - Public Sector: Surety Insurance whose main object is subject to the legal regime of public law;
VII - Surety Insurance: Obligee - Private Sector: Surety Insurance whose main object is subject to the legal regime of private law;
VIII - loss: default by the principal in relation to the guaranteed obligation;
IX - principal: debtor of the obligations set forth in the main object towards the obligee; and
X - value of the guarantee: maximum value guaranteed by the policy.
§ 1. The guaranteed obligation defined in item III of this article may be limited to phases, stages, or partial performances of the main object, as defined therein.
§ 2. In cases where the main object is a lawsuit, the court may act on behalf of the obligee in the policy, in accordance with, and within the limits of the specific legislation of the main object.
CHAPTER II
THE OBJECTIVE OF THE SURETY INSURANCE
Art. 3. The Surety Insurance is intended to guarantee the main object against the risk of default, by the principal, of the guaranteed obligations.
Sole paragraph. By the Surety Insurance contract, the insurance company is obliged to pay the indemnity, pursuant to art. 21, in case the principal does not comply with the guaranteed obligation, as established in the main object or its specific legislation, respecting the conditions and limits established in the insurance contract.
Art. 4. The Surety Insurance is a contract linked to the main object, and must respect its characteristics, provisions and specific legislation.
Sole paragraph. The insurance company should observe the link defined in this article when preparing the insurance contractual conditions, as well as when issuing the policy.
CHAPTER III
CHARACTERISTICS OF THE SURETY INSURANCE PLAN
Guaranteed obligations
Art. 5. The Surety Insurance should guarantee the obligations of the main object, for which the obligee demands coverage.
Sole paragraph. In case the Surety Insurance does not guarantee all the obligations of the main object, the policy should emphasise this information, besides describing, in a clear and objective way, the exact guaranteed obligations.
Value of the guarantee
Art. 6. The value of the guarantee should be defined by the obligee in line with the guaranteed obligation and its specific legislation.
Policy term
Art. 7. The period of validity of the policy should be equal to the period of validity of the guaranteed obligation, except if the main object or its specific legislation provides otherwise.
Sole paragraph. In the event the insurance proposal is forwarded after the commencement of the guaranteed obligation, the commencement of the policy should follow the general insurance rules.
Art. 8. Should the validity period of the policy be shorter than the validity period of the guaranteed obligation, pursuant to art. 7, the insurance company should ensure the maintenance of the coverage as long as there is risk to be covered, in accordance with art. 9.
§ 1. The obligee may, at any time, oppose the maintenance of the coverage, through express manifestation.
§ 2. The principal cannot oppose the maintenance of the coverage, except if the policy is replaced by another guarantee accepted by the obligee.
Art. 9. For the purposes of art. 8, the insurance company should:
I - specify, in the insurance contractual conditions, the criteria for maintaining the coverage during the entire risk period and the procedure for renewing the policy, when this is the case, which may not generate any harm to the maintenance of the coverage and to the rights of the obligee;
II - ensure that the procedures and the attainment of the maintenance of the coverage and/or the renewal of the policy occur before the end of the policy validity period; and
III - communicate to the obligee and to the principal the proximity of the end of the validity period of the policy, at least ninety (90) days before this date.
Alteration and updating
Art. 10. The policy may only be altered at the request of the obligee or with its express agreement.
Art. 11. When alterations are made to the main object and a modification of the policy becomes necessary, the policy:
I - should follow such alterations, if they have been previously stipulated in the main object, in its specific legislation or in the document that served as the basis for the insurance company's acceptance of the risk; or
II - may follow such alterations, in situations not covered in item I of this article, provided that there is the respective acceptance by the insurance company.
§ 1. The procedures to be adopted by the obligee in case of alterations made to the main object must be objectively established in the insurance contractual conditions.
§ 2. In case the requirement of communication of the alteration of the main object to the insurance company is foreseen, its non-communication, or its communication in disagreement with the criteria established in the contractual conditions of insurance, may only generate loss of right to the obligee in case it aggravates the risk and, concomitantly:
a) is related to the loss; or
b) it is proved by the insurance company that the obligee was silent in bad faith.
Art. 12. The index and periodicity for updating the policy values, when applicable, should be the same as defined in the main object or in its specific legislation.
Sole paragraph. The updating of the policy values may occur automatically, without express manifestation of the obligee or principal, as long as it is foreseen in the main object or in its specific legislation.
Contracting
Art. 13. The form of contracting the Surety Insurance is the absolute risk basis, a form of contracting in which the insurance company is fully liable for the value of the loss, limited to the value of the guarantee, not applying, under any hypothesis, the average clause.
Deductibles, obligatory participations of the obligee and waiting periods
Art. 14. The establishment of deductibles, obligatory participations of the obligee and/or waiting periods is allowed with the express consent of the obligee.
Policy beneficiaries
Art. 15. In the event that a default of the principal in relation to the guaranteed obligation may generate damages to third parties, these may be included in the policy in the form of beneficiaries, in accordance with the terms of the main object and/or its specific legislation.
Sole paragraph. The contractual conditions of the insurance should clearly describe the possibility of including beneficiaries, as well as their definition and relationship with the guaranteed obligation.
Payment of the premium
Art. 16. The principal is responsible for the payment of the insurance premium.
§ 1. The policy should remain in force even if the principal has not paid the premium on the agreed dates.
§ 2. The principal should also be responsible for the payment of any additional premium resulting from alterations in the policy, pursuant to art. 10, or from the updating of the policy values, pursuant to art. 12.
Expectation, characterization and communication of the loss
Art. 17. Anexpected loss is defined as the fact or act that indicates the possibility of characterization of the loss and the beginning of the carrying out of procedures and/or verification of criteria for proving default, pursuant to § 1 of art. 18.
§ 1. In the event of an expected loss, the contractual conditions of insurance should clearly describe the act or fact that defines it and establish whether or not there will be a requirement to communicate it to the insurance company, in which case the criteria for this formalization should be described.
§ 2. In the hypothesis that the requirement to communicate the expectation of loss to the insurance company is foreseen, its non-communication, or its non-communication in accordance with the criteria established in the contractual conditions of insurance, may only generate loss of right to the obligee in case it represents aggravation of the risk and prevents the insurance company from adopting the measures of items II and III of art. 29.
Art. 18. The loss should be deemed to have occurred when the default of the principal in relation to the guaranteed obligation is proved.
§ 1. The characterization of the loss, under this article, may occur immediately, by the occurrence of default, or may require procedures and/or verification of criteria for its proof, according to the terms of the main object or its specific legislation.
§ 2. The procedures and criteria for proving default, as provided in the head of art. 17 and in § 1 of this article, are part of the rules of the main object and are the responsibility of the obligee, with the insurance company having no influence over this process, unless otherwise provided for in the main object or in its specific legislation.
§ 3. The proof of default mentioned in § 2 of this article should not be mistaken for the loss adjustment, dealt with in art. 19.
§ 4. Once characterized, the date of the loss is considered as being the date of default of the principal.
Art. 19. The communication of the loss should be sent to the insurance company, as soon as its characterization is known, in accordance with the criteria and containing the documents defined in the insurance contractual conditions, so that the process of adjustment by the insurance company may be initiated.
Art. 20. The loss occurring during the validity period of the policy, as per this article and § 4 of art. 18, its characterization and communication may occur outside this validity period, not characterizing a fact that justifies the denial of the loss, as long as the statutory period of limitation applied to the insurance contract is respected.
Indemnification
Art. 21. The insurance company should indemnify the obligee or the beneficiary, up to the value of the guarantee, through:
I - settlement of losses, fines and/or other amounts owed by the principal and guaranteed by the policy as a result of default on the guaranteed obligation; or
II - performance of the guaranteed obligation, in order to give continuity and conclude it under its full responsibility, under the same terms and conditions established in the main object or as agreed upon between the obligee and the insurance company.
§ 1. The form of payment of the indemnity, dealt with in items I and II of this article, should be defined in accordance with the terms of the main object or its specific legislation or, in the absence of a specific provision, by agreement between the obligee and the insurance company.
§ 2. In the hypothesis set forth in item II of this article, the choice of a person, whether natural or legal, to continue and conclude the guaranteed obligation should be made by agreement between the obligee and the insurance company, in compliance with the terms of the main object or its specific legislation.
Art. 22. In the event of extinction of the main object, due to the occurrence of a loss, any credit balances of the principal with the obligee, within the scope of the main object, should be used to pay off the amount of the indemnity, without prejudice to its payment in due time.
Sole paragraph. If the indemnity has already been paid or if the insurance company has already initiated the process of enforcement of the guaranteed obligation at the time of conclusion of the ascertainment of the credit balances of the principal with the obligee in the main object, the obligee should be obliged to return to the insurance company the excess amount received.
Concurrent policies
Art. 23. The use of more than one Surety Insurance to cover the same obligation of the main object is forbidden, except in the case of complementary policies.
Excluded risks and loss of right of the obligee
Art. 24. Without prejudice to other situations duly described in the contractual conditions of insurance, excluded risks are considered to be:
I - default on guaranteed obligations arising from acts or facts under the responsibility of the obligee which have contributed in a determining manner to the occurrence of the loss; or
II - default on obligations of the main object that are not the responsibility of the principal.
Art. 25. Exclusive acts of the principal, the insurance company or both may not generate losses or damages to the obligee.
Policy termination
Art. 26. The Surety Insurance should be cancelled in the occurrence of one of the following events, whichever occurs first, without prejudice to the notification of the loss as per arts. 19 and 20:
I - when the guaranteed obligations are definitively concluded and there is an express manifestation of the obligee in this sense;
II - when the obligee and the insurance company expressly agree;
III - when the payment of the indemnity to the obligee or beneficiary reaches the value of the guarantee;
IV - when the main object is extinguished; or
V - at the end of the validity period of the policy.
Sole paragraph. The termination of the Surety Insurance as a result of the situations set forth in items II and IV of this article, may result in the refund of the premium amount calculated according to the criterion defined in the insurance contractual conditions, which should be compatible with the risk effectively covered by the insurance until the contractual termination date.
Types of Surety Insurance
Art. 27. Specific clauses and definitions must be included in each type, according to the specific characteristics and legislation of the main object, addressing at least the following aspects:
I - objective of the insurance, in accordance with art. 3, clearly describing the commitment assumed by the insurance company before the obligee;
II - description of the amounts guaranteed by the policy, pursuant to item I, art. 21;
III - validity of the policy, in accordance with art. 7;
IV - expectation of loss, if any, and characterization of the loss, according to art. 17 and 18; and
V - description of objective criteria and methods for calculating the value of the indemnity;
Sole paragraph. It is the responsibility of the insurance company to prepare and develop specific clauses of each type, in accordance with the characteristics and specific legislation of the main object and of the guaranteed obligation and/or in accordance with the model of clauses required by the obligee.
CHAPTER IV
UNDERWRITING AND RISK MITIGATION POLICY
Art. 28. The insurance company’s risk underwriting policy should take into consideration, as a minimum, the assessment of the principal, as well as the main object and its specific legislation.
Sole paragraph. The technical actuarial note of the product should specify, in detail, the technical criteria and instruments used by the insurance company in the underwriting of the risk of the main object and in the assessment of the risk of the principal.
Art. 29. As long as previously and expressly agreed upon by the parties, the Surety Insurance may foresee, separately or jointly, the possibility or the obligation of the insurance company:
I - to carry out the follow-up and/or monitoring of the main object;
II - to act as mediator of the default or of any conflict between the obligee and the principal; or
III - to provide support and assistance to the principal.
CHAPTER V
MINIMUM POLICY INFORMATION
Art. 30. The Surety Insurance policy should contain, in highlight, besides the minimum information required in specific regulation:
I - information on the main object, guaranteeing its unequivocal identification; and
II - the guaranteed obligations.
CHAPTER VI
GENERAL ASPECTS
Art. 31. The relationship between the insurance company and the principal should not prejudice the proper treatment of the obligee, and any conflict of interest arising from this relationship should be made clear to the obligee.
§ 1. Operations with related companies may only be carried out under conditions compatible with market conditions, including limits, rates, terms and criteria for risk underwriting, without additional or differentiated benefits in comparison with operations granted to other principals with the same risk profile, except in cases provided for in specific legislation.
§ 2. The parameters adopted by the insurance company in Surety Insurance operations for principals with the same profile and risk of default are considered as conditions compatible with market conditions.
§ 3. If the principal is a company linked to the insurance company, as defined in specific regulations, the policy should make express mention of the existing link in a clear and objective manner.
Art. 32. The collateral contract, which governs the binding relationships between the insurance company and the principal, if any, should be freely agreed upon and may not interfere with the right of the obligee.
Sole paragraph. The collateral contract mentioned in this article does not fall within the scope of Susep's activities.
Art. 33. The occurrence of any contractual mismatches between the insurance and reinsurance operations contracted should not justify the denial of a claim or the reduction or loss of rights of the obligee.
CHAPTER VII
FINAL PROVISIONS
Art. 34. In addition to the provisions of this Circular, the Surety Insurance contracts and plans should comply with the legislation and regulations in force.
Sole paragraph. Art. 2 and 3 of this Circular should apply to Surety Insurance contracts to cover large risks, issued within the scope of Resolution CNSP 407 of 29 March 2021, with the adoption of its other provisions being optional.
Art. 35. As from 1 January 2023, the insurance companies should not market new Surety Insurance contracts in disagreement with the provisions of this Circular.
§ 1. The Surety Insurance plans registered with Susep before this Circular becomes effective should be replaced by new plans adapted to this rule, until the date established in the head of this article, by means of the opening of a new administrative file.
§ 2. After the date provided for in the head of this article, all Surety Insurance files with an opening date prior to the effective date of this Circular will be automatically cancelled.
§ 3. From the effective date of this Circular, new plans filed with Susep should be adapted to its provisions.
Art. 36. The Surety Insurance contracts in force that are in disagreement with the provisions of this Circular and that have their term of validity terminated:
I - before the date established in the head of art. 35, may be renewed only once for, at most, the same originally agreed upon term; or
II - after the date established in art. 35, may only be in force until the end of their validity.
Sole paragraph. The validity period of the Surety Insurance contracts described in this article may be extended, at the express request of the obligee, to follow the respective extension of the validity period of the guaranteed obligation, and for the same term.
Art. 37. The following are hereby revoked:
I - Circular Susep 477, of 30 September 2013; and
II - Circular Susep 577, of 26 September 2018.
Art. 38. This Circular shall enter into force on 2 May 2022.
ALEXANDRE MILANESE CAMILLO
(Official Gazette DOU of 12 april 2022 – pages 55 and 56 – Section1)
*The information provided in this publication is general and may not apply to a specific situation or person. Every effort has been made to ensure that matters of concern to readers are covered. Although the information provided is accurate, be advised that this is a developing area. The information contained herein is not intended to be relied upon or to be a substitute for legal advice in relation to particular circumstances. Specific legal advice should always be sought from experienced local advisers. Accordingly, Editora Roncarati accepts no liability for any loss that may arise from reliance upon this publication or the information it contains.
