Newsletter Insurance – Reduced Term and Intermittent Period Insurance – Circular SUSEP nº 592/2019

On 26 August 2019 the Brazilian Private Insurance Superintendence issued Circular No. 592/2019, which regulates the sale and purchase of insurance products with a “reduced term” and/or by “intermittent period”.

Following the tendency of other countries where it is possible to offer tailor-made insurance products, the new Circular intends to regulate insurance products to adapt to the actual needs of its consumers, with coverage for specific time periods (months, days, hours, minutes), specific locations (as commuting paths or limited geographical areas) and other agreed limits, while also regulating insurance coverage during partial periods, with specific criteria for terminating and restarting coverage (as an “on-off” option) and the inclusion or exclusion of coverage for specific risks.

The clearer rules for tailored products brought by Circular no. 592/2019 opens the local Brazilian market for adaptation of insurance plans and products with the concept of usage-based insurance (a product with flexible coverage and prices based on usage), as commonly applied in per-pay-ride motor insurance and property insurance available in other countries.

We believe that the possibility of offering customers with insurance products which is tailored to their needs should broaden the consumer base for the industry, engaging individuals or companies with specific needs not fulfilled by the products already available on the market, such as drivers who only use their cars during the weekends.

The need for fast and specific analysis, as well as a cost effective operation, will also tend to foment the use of new technologies by the insurance industry, with further use of big-data (the structured crossing and analysis of data from different sources) and artificial intelligence to better assess the needs of its clients, evaluate the risks and price its products.

Circular Noº 592/2019 has come into force on 27 August 2019, shortly after its issuance.

 

Marcella Hill
Partner
T: + 55 11 96913 2871
+ 44 7478 568 672
E: marcella.hill@cmalaw.com

Pedro Cardoso A. A. Costa
Associate
T: +55 11 3077-3517
E: pedro.costa@cmalaw.com

Fabiana Marcondes
Associate
T: +55 11 3077-3530
E: fabiana.marcondes@cmalaw.com