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Memorandum | New Circular SUSEP No. 553, dated 23rd May 2017, on D&O insurance

Insurance, Reinsurance and Pensions
On 24th May 2017, the Superintendence of Private Insurance (Superintendência de Seguros Privados – SUSEP) published Circular No. 533, dated 23rd May 2017, establishing general guidelines applicable to directors and officers liability insurance (“D&O”).

Such Circular revoked Circular SUSEP No. 541, dated 14th October 2016, which also related to D&O insurance and which had been suspended by means of Circular SUSEP No 546, dated 23rd February 2017.

The new Circular maintained most of the wording of the revoked Circular SUSEP No. 541/2016, only introducing a few changes, including the following:

(i) The possibility of a company being an insured party, by purchasing Coverage C, which covers losses incurred by the company resulting from claims filed by third parties for not complying with the rules that regulate capital markets;

(ii) The possibility of an individual contracting D&O insurance;

(iii) Cover for defense costs, which under Circular No. 541/2016 was required to be contracted by means of an additional coverage, now can be contracted by means of basic coverage;

(iv) Permission for referencing foreign legislation in the event that the insurance provides global coverage;

(v) Inclusion of the concept of “indemnifiable losses”, as being defense costs, indemnification paid or settlements made (subject to the insurance company’s prior approval), thereby helping to clarify the scope of D&O insurance.

Unlike Circular SUSEP No. 541/2016, which did not come into effect on the date of its publication, the new Circular has already become effective as of 24th May 2017 (i.e. immediately upon being published). New D&O insurance contracts that are not compliant with the new Circular will no longer be able to be sold after 180 (one hundred and eighty) days as from 24th May 2017.

Finally, contracts in force as at the date of the publication of the new Circular and which terminate prior to the above-mentioned period of 180 (one hundred and eighty) days may be renewed once
for a period of 1 (one) year. Contracts which terminate after such period of 180 (one hundred and eighty) days shall remain valid up to their date of termination and may not be renewed.

For more information, please do not hesitate to contact:

Marcelo Mansur Haddad
[email protected]
T +55 11 3147-7675

Camila Leal Calais
[email protected]
T +55 11 3147-2838

Cassio Gama Amaral
[email protected]
T +55 11 3147-7792

Luciana Dias Prado
[email protected]
T +55 11 3147-2613

Thomaz del Castillo Barroso Kastrup
[email protected]
T +55 11 3147-7880

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