Brazil Insurance Information

CIA link to demographic/economic data on Brazil

General Brazil Insurance Information

• Compulsory Insurance:
  
  1. Workers’ Compensation (Social Security)
  2. Third-party automobile liability;
  3. Fire (after value exceeds certain amount);
  4. Cargo - truck (once value exceeds certain amount);
  5. Inland Marine (once value exceeds certain amount).
• Non-Admitted Insurance:
  Prohibited but petitions for exceptions can be made to the SUSEP which has assumed the regulatory control over all matters pertaining to insurance – Law 9932 of December 20, 1999.
• Policy Wordings & Rates / Tariffs Controlled:
  Most types of insurance are tariff rated individually by company with SUSEP approval. Fire and liability (excluding automobile) forms are controlled.
• Policy Language:
  Portuguese.
• Types of Insurance Restricted to Government Institutions:
  25% quota share Property (fire) business is no longer compulsory. Insurers negotiate their terms individually.
• Policy Currency:
  real (BRL). U.S. Dollar insurance is rare.
• Currency Restrictions / Exchange Controls:
  The Real is not freely convertible and local premiums must usually be paid in Reals.
• Policy Period:
  Annual.
• Cancellation Provisions:
  At Insured’s direction, though technically cancellation is by mutual consent. A good rule of thumb is 30 day written notice by either party.
• Premium Tax, etc. paid by Insured:
  7% generally; however, there is a small charge for the issuance of policies ranging from R$20.00 to R$60.00. The larger the risk, the smaller the charge. Fewer policies will result in lower overhead charges. Life: 4%.
• Insurance Companies:
  
• Brokers:
  All business must be placed through a licensed broker.
• Brokerage Commissions:
  Commissions cannot be paid to brokers not registered in Brazil. Due to some liberalization, commissions are coming down to more tolerant levels. Property commissions for brokers range from 15% to 30%. Personal Accident: 40%.
• Broker of Record Letters:
  Used for commercial business.
• Reinsurance:
  Any reinsurance requirements in excess of available market capacity is mostly negotiated by the IRB with the world reinsurance market.
• Local Natural Hazards:
  Earthquake in the North. Floods in the South.
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning and explosion. Aircraft, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane and vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Not usual for commercial risks. Can be available for Builders Risk, Contractors Equipment, Machinery Installation risks.
• Coinsurance:
  Varies by policy type.
• Blanket Insurance:
  Not generally available but may under certain circumstances be made available.
• Business Interruption:
  Local forms which generally follow UK Loss of Profits form.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Both UK and U.S. Boiler explosion is included under the Property (fire) policy. Inspections are required by law and must be inspected on a 1 to 3 year schedule.

General / Public Liability

• Available Wordings:
  Comprehensive and includes Product Liability. Product Recall is available with special and restricted wording approved by SUSEP.
• Comments:
  Coverage is usually written on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Bodily Injury: A ‘No-Fault’ scheme is in place; Property Damage Liability is not required.
• Comments:
  Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties.

Workers’ Compensation

• Comments:
  Social Security Scheme is controlled by the Instituto National Social (INNS). Employer’s Liability can be covered under the General / Public Liability Policy. All employees are subject to and covered under the Scheme. Extra-Territorial Benefits, Medical Expenses and Occupational Disease are included in the Scheme. Employees have the option to sue.

Marine

• Available Wordings:
  Institute of London Underwriters forms followed. Import shipments must be insured by locally registered Insurers. Inland Marine coverage required for shipments in excess of a fixed amount.

Crime

• Available Coverages:
  Crime, Fidelity and surety. Fidelity can be included in the Property (fire) policy.