The Insurance Legal Framework came into effect this Thursday, the 11th, and promises to bring more clarity and standardization to the services provided by insurance companies. The main advances are in the definition of deadlines, the exclusion criteria for policies, the interpretation of contractual clauses in favor of policyholders, the acceptance or rejection of proposals, and transparency in the claims settlement process.
The new Law No. 15.040/2024 was created to meet the needs of the sector, with the aim of improving the relationship with consumers. Susep (Superintendence of Private Insurance) will be the agency responsible for reviewing and adapting all the rules provided for in the legal text.
See below the highlights foreseen in the new Legal Framework for Insurance:
- Contracts are now required to describe uncovered risks and interests in a clear, unequivocal, and prominent manner.
- In case of doubt regarding the extent of coverage or any contractual term, the interpretation should be the one most favorable to the insured .
- Insurance companies must respond regarding the acceptance or rejection of the insurance proposal within 25 days of receiving it. If no formal response is received within this period, the proposal will be considered accepted.
- The request for additional information and documents can only be made once. In this case, the 25-day period is suspended and resumes after all the information has been received.
- Insurance companies have up to 30 days to pay compensation . In case of refusal, the denial must be formal, justified, and indicate the legal or contractual reason.
- Insurance companies cannot demand documents that are already in their possession or in the possession of third parties containing easily accessible information.
- Unilateral cancellation of policies by insurance companies is prohibited , and the contracts remain in effect.
- If the beneficiary of the insurance policy is not identified within three years of the insured person’s death, the amount will be allocated to Funcap (National Fund for Public Calamities, Protection and Civil Defense).
Penalties
In the event of non-compliance with obligations, insurance companies are subject to fines , in addition to being required to fulfill their responsibilities to policyholders. They may also be subject to administrative penalties imposed by SUSEP (Superintendence of Private Insurance) for misconduct .
Brokers who fail to follow the established guidelines may be held legally liable for failing to inform policyholders about risks and exclusions, and may also be subject to penalties from SUSEP (the Brazilian insurance regulator) for misconduct or ethical breaches.
Were the changes positive?
Companies in the sector have differing assessments of the effects of the new legal framework. For Marcus Vinícius de Oliveira, CEO of Wiz Co., a company specializing in bancassurance and the distribution of consortiums and credit, the new legislation represents progress.
According to the executive, transparency is one of the central pillars of the new Legal Framework for Insurance. He states that the relationship between Brazilians and the insurance market is constantly maturing, with room to expand benefits for both companies and families. In this context, the new law is likely to favor the sector’s growth.
Suhai Seguradora, on the other hand, believes that the changes were not profound, but could result in increased insurance prices , especially in the auto insurance segment.
According to Jorge Martinez, vice president of products and pricing at the insurance company, there is a risk of higher prices due to improper contracting practices or changes that increase risk during the contract’s term. He cites as an example the incorrect information regarding the vehicle’s overnight parking zip code , indicating a lower-risk area.
Martinez explains that, if omission or false information in the contract is proven, the compensation may be reduced proportionally to the difference between the premium paid and what should have been charged. Before the new law, situations of increased risk during the term could lead to the complete denial of compensation. Now, the insurer is limited to applying this proportional reduction.
The executive also points out that, in civil liability coverage , which involves damages to third parties, it will now be required to define a specific limit for legal expenses, in addition to the limits already established for material and bodily damages.
Boost in the sector
With the new legislation, the Ministry of Finance seeks to boost the insurance market. The ministry emphasizes that, although Brazil is the ninth largest economy in the world, the share of insurance in GDP is still low, placing the country in 18th position globally in this segment.
According to Alessandro Octaviani, superintendent of Susep, the law structures a legal framework based on transparency, security, and trust in contracting, elements considered essential to sustain a growth cycle in the sector.
Currently, the insurance market represents about 6% of Brazil’s GDP . In OECD (Organisation for Economic Co-operation and Development) member countries , this average share is around 10%.
