BRAZIL Law and Practice Contributed by: Thiago Junqueira and Daniel Barreto Gelbecke, Junqueira & Gelbecke Advogados
erally results in forfeiture of coverage, while negligent non-compliance may lead to a proportional reduction of the indemnity, depending on the circumstances. In certain cases, such as aggravation of risk, the law requires a causal link between the breach and the occurrence or aggravation of the loss. Courts there- fore focus on whether the breach was relevant to the risk and causally connected to the loss. If such a con- nection exists, indemnity may be denied or reduced; if not, coverage is generally preserved. 8.3 Conditions Precedent In Brazilian insurance law, “conditions precedent” are not recognised as a distinct legal category in the com- mon law sense and are uncommon in practice. Insur- ance contracts are generally not made contingent on the occurrence of specific prior events for the insurer’s liability to arise. Clauses that could resemble conditions precedent are usually treated as contractual duties of the insured, and their breach does not automatically exclude cov- erage. The consequences are assessed under statu- tory insurance rules and general contract principles, rather than through an automatic forfeiture mecha- nism. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage Disputes over coverage under insurance contracts in Brazil are most commonly resolved through ordinary court litigation. Although arbitration clauses may be included in insurance policies, arbitration is still not predominant in insurance disputes, including in large- risk insurance, although its use is gradually increasing in more sophisticated transactions. In consumer insurance, arbitration is subject to stricter constraints. Arbitration clauses are not prohibited per se, but they must comply with heightened transpar- ency and consent requirements. Depending on the circumstances, such clauses may be deemed non- binding on the consume, particularly where they are imposed in an adhesion contract without clear and informed acceptance.
In reinsurance contracts, arbitration is more widely accepted and commonly used, reflecting the profes- sional, B2B nature of such contracts and their broader contractual autonomy. As a general rule, insurance claims are subject to a one-year limitation period. Under the new Insurance Contract Act, this period typically starts from the insurer’s formal denial of coverage, consolidating a trend already emerging in case law. There are, howev- er, statutory nuances depending on the type of insur- ance and the nature of the claim. The new framework places greater emphasis on timely notice of loss and transparent communication during claims handling. Beneficiaries are entitled to enforce insurance con- tracts even if they are not expressly named, provided they are identifiable under the policy. In liability insur- ance, injured third parties may bring direct claims against the insurer, typically with the insured joined in the proceedings. 9.2 Insurance Disputes Over Jurisdiction and Choice of Law Brazilian insurance disputes are governed primar- ily by mandatory statutory rules on jurisdiction and applicable law. As a general rule, insurance contracts connected to Brazil are subject to Brazilian law and Brazilian courts. Under the Brazilian Insurance Contract Act (Law No 15,040/2024), Brazilian law mandatorily applies to the following insurance contracts: • those issued by insurers authorised to operate in Brazil; • where the insured or policyholder is resident or domiciled in Brazil; or • where the insured interest is located in Brazil, with- out prejudice to the limited exceptions for offshore insurance expressly permitted by Complementary Law No 126/2007. Brazilian courts have exclusive jurisdiction over dis- putes arising from insurance contracts subject to the Act. The default forum is the domicile of the insured or beneficiary, although they may alternatively sue in the insurer’s domicile. Contractual choice of foreign
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