BRAZIL Law and Practice Contributed by: Thiago Junqueira and Daniel Barreto Gelbecke, Junqueira & Gelbecke Advogados
5. Distribution 5.1 Distribution of Insurance and Reinsurance Products Insurance products in Brazil are distributed through multiple regulated channels, reflecting the size and The primary form of distribution is insurance broker- age. Insurance brokers must be authorised by SUSEP and act mainly in the interest of the insured, providing advice on coverage selection and assisting through- out the contractual relationship, including claims han- dling. Insurance agents also participate in distribu- tion, acting on behalf of insurers under contractual arrangements. Bancassurance diversity of the market. Insurance Brokerage Bancassurance operates as a distribution channel rather than a distinct category of intermediary. In this model, banks distribute insurance products (often structured as group policies or ancillary coverages) within their broader financial services offerings, par- ticularly in life, personal accident and payment pro- tection insurance. In addition, direct distribution by insurers has expanded, including digital and online sales, supported by regulatory initiatives such as open insurance, which enable new distribution models while preserving consumer protection standards. Reinsurance Distribution Reinsurance distribution is more restricted. Faculta- tive and treaty reinsurance contracts must be placed directly between the cedant and the reinsurer or through a licensed reinsurance broker. Reinsurance brokers are subject to specific authorisation and regu- latory requirements, including professional qualifica- tion standards and mandatory professional liability (E&O) insurance, reflecting the technical and profes- sional nature of reinsurance transactions. 6. Making an Insurance Contract 6.1 Obligations of the Insured and Insurer Under Brazilian insurance law, disclosure duties dur- ing the negotiation and formation of an insurance
contract are based on good faith and follow a ques- tionnaire-driven model. Insured’s Obligations The insured (or policyholder) must provide accurate and complete information relevant to the assessment of the risk, as requested by the insurer through its questionnaires and communications. There is no gen- eral duty to disclose all material facts spontaneously; the obligation is limited to what is requested and to what the insured knows or should reasonably know. The consequences of non-disclosure depend on fault. Intentional non-disclosure or misrepresentation may result in loss of coverage. Unintentional non-disclosure leads to a proportional reduction of coverage, reflect- ing the premium that should have been charged. If the undisclosed facts render the risk technically uninsur- able or outside the insurer’s underwriting standards, the contract may be terminated. Insurer’s Obligations The insurer has an affirmative duty to proactively seek the information it considers relevant to underwriting, and to clearly inform the applicant of the consequenc- es of failing to comply with disclosure duties. The insurer must also ensure pre-contractual trans- parency, particularly with respect to exclusions, for- feiture of rights and coverage limitations, which must be clearly drafted, properly highlighted and presented in Portuguese. Life and Personal Safety Insurance In life and personal safety insurance, the regime is more protective. Where a waiting period is agreed, the insurer may not deny coverage based on alleged pre-existing medical conditions. In the absence of a waiting period, exclusions for pre-existing conditions are only valid if the insured was clearly questioned and intentionally omitted the relevant information. Consumer v Commercial Insurance The statutory disclosure regime applies to both con- sumer and commercial insurance contracts. However, in consumer insurance, the disclosure and transpar- ency duties imposed on the insurer are applied more strictly, and consumer protection principles may fur-
52 CHAMBERS.COM
Powered by FlippingBook