Main sources of insurance and reinsurance law in Brazil include the following.

The Brazilian Civil Code (Law No 10.406/2002) Articles 757–802 establish key rules pertaining to insurance contracts in general, covering both non-life and life insurance.

The Brazilian Commercial Code (Law No 556/1850) Articles 666–731 provide specific rules applicable to maritime insurance.

The Brazilian Aeronautical Code (Law No 7.565/1986) Articles 281–286 address aspects of aviation insurance. 

Decree-Law No 73/1966 sets up the National System of Private Insurance (Sistema Nacional de Seguros Privados), overseen by the National Council of Private Insurance (Conselho Nacional de Seguros Privados – CNSP) and the Superintendency of Private Insurance (Superintendência de Seguros Privados – SUSEP). These executive agencies regulate the insurance and reinsurance market, aiming to protect policyholders. The decree contains provisions for insurance contracts.

Complementary Law No 126/2007 ended the federal government’s monopoly on reinsurance (formerly exercised through the Instituto de Resseguros do Brasil – IRB), and establishes the rules for reinsurance and retrocession activities.

As Brazil’s legislation on insurance is incomplete and outdated, the executive agencies (the CNSP and especially SUSEP) supplement the law with extensive regulation on insurance and reinsurance. The most relevant rules on prudential supervision and specific insurance branches (property insurance, life insurance, etc) are found in the CNSP’s resoluções (resolutions) and SUSEP’s circulares (circular letters).

Brazil’s Consumer Protection Code (Law No 8.079/1990), applicable to all consumer insurance policies (ie, those not taken for business activities), provides important rules on business practices (eg, tie-in sale is forbidden) and policy content (eg, policy provisions that excessively restrict consumers’ expected rights related to the insurance contract are null and void).

Law No 9.656/1998 establishes detailed rules on health insurance contracts, and Law No 9.961/2000 enacts and defines the legal powers of Brazil’s National Health Agency (Agência Nacional de Saúde – ANS), an independent regulatory agency.

Complementary Law No 109/2001 regulates open and closed pension funds. Law No 12.154/2009 establishes two executive agencies responsible for pension funds supervision:

• the National Council of Complementary Welfare (Conselho Nacional de Previdência Complementar – CNPC); and
• the Superintendency of Complementary Welfare (Superintendência Nacional de Providencia Complementar – PREVIC).

In December 2024, a new Insurance Contract Law Bill was sanctioned (Law No 15.040/2024). Set to take effect on 11 December 2025, the law will replace the chapter on insurance contracts in the Brazilian Civil Code and introduce substantial updates to the country’s insurance legal framework.

In the last decade, Brazil has made significant efforts to increase the role of legal precedents, notably through the promulgation of the new Civil Procedure Code (Law No 13.105/2015). However, the courts, especially Brazil’s highest court on federal law (the Superior Court of Justice or Superior Tribunal de Justiça – STJ), have not adopted a stable body of precedent on insurance matters.

The insurance and reinsurance sector is overseen by a range of independent and executive regulatory agencies.

Decree-Law No 73/1966

The CNSP and SUSEP are mainly responsible for supervising insurance and reinsurance companies as well as open pension funds.

The CNSP, mostly through its resolutions, establishes general guidelines and rules on:

• solvency requirements;
• insurance policy standards;
• reinsurance regulations;
• co-insurance and insurance operations; and
• insurance brokerage.

SUSEP is responsible for complementing and enforcing CNSP guidelines. In practice, this results in extensive supervisory activities, as SUSEP holds significant powers, such as setting guidelines for all insurance policies. Additionally, the broad and open-ended nature of many CNSP regulations further expands SUSEP’s role in regulating the sector.

Law No 9.961/2000

The ANS is the only independent agency among all insurance regulatory bodies. Being responsible for health insurance regulation, the ANS:

• sets limits for annual premium adjustments;
• defines mandatory coverage for medical procedures;
• authorises health insurance writing; and
• conducts prudential oversight of health insurers.

Law No 12.154/2009

As mentioned previously, Law No 12.154/2009 established the National Council of Complementary Welfare (CNPC) and the Superintendency of Complementary Welfare (PREVIC) to oversee closed pension funds. These bodies operate similarly to the CNSP and SUSEP. The CNPC and PREVIC oversee all aspects of closed pension funds, with a primary focus on authorising the establishment of new funds.

Only legally authorised entities (which in almost all cases must be a corporation) are allowed to write insurance and reinsurance. Insurance and reinsurance companies must comply with legal and regulatory requirements established in Decree-Law No 73/1966 and CNSP Resolution 422/2021.

Legal authorisation for insurers and reinsurers is granted through a two-step process.

First, a legal representative of the prospective shareholders must formally request SUSEP’s authorisation to establish a (re)insurance company. The request must include:

• a sound business plan;
• a full description of the corporate group and shareholders;
• proof of financial and economic capabilities suitable for the intended (re)insurance branch(es), especially the minimum partnership capital requirement specified in CNSP Resolution 432/2021;
• a description of the financial resources to be used in the (re)insurance company; and
• any other document demanded by SUSEP to prove reputation and good character of the prospective key shareholders.

After authorisation is granted, the (re)insurance company must be constituted within 90 days and prove the legitimate origin of the resources used. Following its establishment, SUSEP issues the authorisation for the company to underwrite (re)insurance in the requested branches.

While there is no regulatory distinction between excess layers, reinsurance and other insurance branches, more flexible rules apply to SME insurance and business insurance. Both branches are subject to less regulation, either by having lighter authorisation requirements (SME insurance – SUSEP Circular Letter 439/2012) or less stringent supervision on policy content (particularly in large or jumbo risks business insurance – CNSP Resolution 407/2021).

Regulatory authorities have recently loosened authorisation requirements for certain types of insurance companies, aiming to promote innovation through CNSP Resolutions 381/2020 and 417/2021 and SUSEP Circular Letters 598/2020 and 636/2021. This so-called regulatory sandbox grants a temporary authorisation to operate to new insurance companies with innovative proposals vetted by regulators. Companies operating under the sandbox must meet standard regulatory requirements and secure permanent authorisation within three years of active insurance operations.

International reinsurers, already constituted in their home jurisdiction, follow a different procedure. They must register with SUSEP to be allowed to underwrite risks in Brazil. According to Complementary Law No 126/2007, the reinsurer must:

• appoint a representative residing in Brazil;
• present its latest financial statements;
• prove itself to be regularly constituted in its home jurisdiction;
• demonstrate a minimum of five years of active underwriting reinsurance in the branch in which it intends to operate;
• prove not to have any solvency issues;
• possess more than USD150 million in assets; and
• have its individual solvency rated at least BBB or equivalent by selected risk-rating agencies.

Where the international reinsurer aspires to be an admitted reinsurer (ie, not just an eventual one), it must also establish a representation office in Brazil and deposit USD5 million (non-life insurance) or USD1 million (life only) in an authorised bank account.

Payment of insurance premiums is considered a financial transaction and is subject to a federal tax on financial transactions (IOF). According to Decree No 6.306/2007, the federal government is allowed to tax most insurance transactions (eg, rural insurance is exempt from taxation) up to a rate of 25% of the premium paid, though the effective rate is very diverse.

Reinsurance, obligatory insurance, credit insurance, performance bonds and other types of insurance are currently exempt.

Life insurance is currently subject to a 0.38% rate, while health insurance is subject to a 2.38% rate and other insurance branches are subject to a 7.38% rate. 

Brazilian law distinguishes between overseas-based insurers and overseas-based reinsurers.

Overseas Insurance

Under Complementary Law No 126/2007, all insurance policies related to risks located in Brazil must be issued domestically. Exceptions apply only if local insurers are unwilling to underwrite the risk or if the specific insurance branch is not offered in Brazil. In such cases, the prospective insured may seek coverage from foreign jurisdictions. Proof that insurance coverage is not locally available is regulated by Circular Letter No 603/2020: the insured must present the formal refusal to underwrite from at least five insurance companies operating in the Brazilian market.

Despite these restrictions, Complementary Law No 126/2007 does not prohibit global insurance programmes. Only risks located exclusively in Brazil cannot be insured by international insurers through policies issued to Brazilian residents or entities. International groups often use this restrictive wording to bring their usually more protective policies to their local operation.

Another entirely different matter is applicable law. Recently, the STJ ruled that international insurance contracts (ie, with international insurers), although concluded in Brazil, can stipulate which law governs the contract. This is a liberal interpretation of Brazilian law (Decree-Law No 4.657/1942) adopted in some STJ rulings that is yet to be confirmed by the Constitutional Court (STF). Mainstream consensus is that Brazil has not yet clearly adopted full party autonomy on choice of law.

Overseas Reinsurance

Complementary Law No 126/2007 fully allows international reinsurance contracts and the operation of foreign reinsurance companies in the country. The law separates reinsurers into three groups, as follows.

Local reinsurers

These are reinsurance companies incorporated in Brazil (often as part of international groups) that have the right to preferentially write 40% of the global reinsurance cession from all insurers operating in Brazil. These reinsurers are allowed to cover specific life insurance policies and pension funds.

Admitted reinsurers

These are international companies that establish a local office in Brazil and deposit a required amount of capital in an authorised financial institution, in addition to fulfilling all registration requirements discussed in 2.2 Writing of Insurance and Reinsurance.

Eventual reinsurers

These are international companies without a local office but registered to operate in Brazil. They only fulfil the registration requirements discussed in 2.2 Writing of Insurance and Reinsurance and are not incorporated in a tax haven (defined by CNSP Resolution 422 as a jurisdiction that does not tax income, has an income tax rate lower than 20% or does not require the company to publicise its shareholder structure).

According to Complementary Law No 126/2007, the federal government may set specific cession limits to eventual and admitted reinsurers to maintain reinsurance contracts tied to Brazil. However, Decree No 10.167/2019 allows insurers to cede 95% of all premiums to eventual and admitted reinsurers, making both types of reinsurers equivalent for the purpose of cession.

Mirroring the insurance system, CNSP Resolution 451/2022 provides that if no authorised reinsurer (local, admitted or eventual) is willing to write a specific risk, the insurer is allowed to cede to non-authorised reinsurance companies after formally consulting all reinsurers.

According to CNSP Resolution 451/2022, any reinsurance contract related to risks in Brazil must be governed by Brazilian law unless the parties elect arbitration as their preferred dispute resolution method.

Fronting is allowed in Brazil. In most cases, insurers must retain at least 30% of all premiums received in a given year pursuant to CNSP Resolution 451/2022. However, this retention requirement is calculated globally, not on a per-policy or per-contract basis. As a result, insurers can cede most or even all of the risk to reinsurers for specific treaties or facultative reinsurance contracts.

This practice is particularly common in large or jumbo risks, especially when the insurer is part of a larger reinsurance group. Such arrangements often include claims control or co-operation clauses, reflecting the reinsurer’s involvement in claims management.

Under Complementary Law No 126/2007, the insurer (cedent) remains the sole party liable to the insured, regardless of the extent of risk ceded to reinsurers. For this reason, some level of retention – however minimal – is generally maintained.

The general trends are the same as last year. In large risks and sophisticated insurance, the increasing presence of international reinsurance groups continues to blur the line between insurance and reinsurance.

By contrast, in retail insurance – a market dominated by large Brazilian companies and bancassurances – technological improvements are streamlining internal processes and facilitating insurance distribution.

Insurtechs, the expected target of M&A in insurance, are usually grown inside or in close relation to established insurance companies. They are not currently focused on displacing traditional insurers – most insurtechs in Brazil threaten the insurance brokerage and traditional insurance agency business, such as with the recent growth of manager general agents (MGAs) and the creation of insurance service initiation companies (SISS), the first of which recently received regulatory approval.

Insurance and reinsurance contracts are distributed in different ways in Brazil.

Reinsurance Distribution

Under Complementary Law No 126/2007, facultative and treaty reinsurance contracts must be directly concluded between cedent and reinsurer, or by way of a legally authorised intermediary (the reinsurance broker).

Reinsurance brokers operating in Brazil must be authorised by SUSEP. Under CNSP Resolution 422/2021, reinsurance brokers must comply with regulatory requirements different from those applicable to insurance brokers. The most relevant distinction is that reinsurance brokers are required to have professional liability insurance (E&O) with a minimum global limit of BRL10 million.

Insurance Distribution

Insurance is distributed through various channels, and authorities have recently created new ones through so-called open insurance (CNSP Resolution No 415/2021). The most-used channels are:

• direct sale;
• insurance brokerage;
• insurance agents; and
• distribution deals with large financial companies.

Insurance companies are allowed to receive and accept insurance proposals directly from the proponent, waiving any insurance intermediation. However, in this case, the insurance company must still pay the standard brokerage commission to a fund administered by the National Insurance School Foundation (FUNENSEG) pursuant to Law No 4.594/1964.

Insurance brokers are the legally preferred channel for distributing insurance products. Insurance brokerage is governed by three main laws.

• The Brazilian Civil Code (Law No 10.406/2002) enacts general rules relating to brokerage in Articles 722–729.
• Law No 4.594/1964 establishes specific rights and duties for insurance brokers and requires operating authorisation for insurance brokerage. In Brazil, brokers are responsible for counselling the policyholder on which is the best insurance product in the market for its purposes.
• Decree-Law No 73/1966 provides that brokers are part of the National System of Private Insurance and empowers SUSEP to grant operating authorisation to brokers. The most prominent requirement is a specific professional qualification for working in an insurance branch group (mostly life and non-life insurance).

Insurance agencies are generally limited to retail insurance, mainly distributing travel, life and certain types of casualty insurance (eg, extended warranty insurance). Large retailers are typically the biggest insurance agents. Agents are subject to the following regulations:

• The Brazilian Civil Code (Law No 10.406/2002) enacts general rules relating to agency in Articles 710–721;
• Law No 4.886/1965 provides basic rules on commercial agency, focusing mainly on protecting the agent as the economically weaker contractual party; and
• CNSP Resolution 431/2021 establishes specific rules on insurance agents (eg, it forbids an agent from underwriting on the insurer’s behalf).

Both insurance brokerage and agency are subject to certain provisions of the new Insurance Contract Law (Law No 15.040/2024), which is due to come into effect in December 2025. The new rules regarding brokerage and agency do not contrast with standing provisions on the matter. The main change introduced is a new limitation period for all claims related to insurance intermediaries equivalent to the limitation period applicable for most insurance and all reinsurance claims.

Since most retail insurance is operated by bancassurance conglomerates, banks are frequent venues for taking policies. They are not typical insurance agents – thus, the aforementioned rules do not directly apply – as they are usually beneficiaries of the policy taken by the client (eg, in payment protection insurance) or are the policyholder in group insurance. Authorities have tried to curb the latter through CNSP Resolution No 439/2022, which forbids group insurance administration only for financial gain.

According to Article 766 of the Brazilian Civil Code (Law No 10.406/2002), the insured must disclose all relevant information to the insurer when the contract is being negotiated.

Case law and jurisprudence have recently highlighted that the insurance company must at least refer to which kind of information may be relevant to write the risk. Where a questionnaire is provided, the courts have mostly referred to the questions in determining whether the information allegedly omitted was material or not. This is frequently discussed in life or health insurance litigation (and therefore, in consumer insurance contracts). Any documents not demanded or questions not asked, unless obviously relevant, cannot be levied against the policyholder or beneficiary to deny coverage.

If any misrepresentation is made, the insurance company may demand additional premium from the insured, who may lose coverage only if the insurance company can prove wilful misconduct or gross negligence in omitting information. Contrary to expectations, case law shows that the gross negligence threshold is easily achieved. Especially in business insurance, courts are rarely impressed with allegations that a misrepresentation was made by mistake, without any intention to take advantage of insurers.   

Insurance intermediaries can act on behalf of both insurers and policyholders, although they do not represent either insurance companies or insureds in a legal sense. Brokers, in general, are perceived to be acting on behalf of policyholders, and are thus legally required to aid policyholders in choosing, negotiating and managing the insurance contract according to Law No 4.594/1964 and longstanding practice. For instance, in large-risks insurance, claims made by the insured to any insurer are frequently handled by brokers, who typically mediate loss-adjusting communications.

Conversely, in retail insurance (such as policies issued by bancassurance conglomerates) brokers are frequently part of the same economic group as the insurers and are incorporated for the main purpose of raising commissions. “Contingent commissions” agreements with insurance companies are unfortunately common in Brazil, making brokers financially interested in quashing or reducing claims brought by policyholders. Therefore, on whose behalf an intermediary is acting must be determined on a case-by-case basis.

The Brazilian Civil Code (Law No 10.406/2002) Article 757 establishes the five distinguishing features of any insurance contract:

• guarantee or coverage;
• insurable interest;
• risk;
• premium; and
• enterprise.

By legal definition, insurers receive a premium to guarantee the legitimate interests of insureds. The insured must, then, have a qualified interest – that is, an economic or otherwise relevant relation to a thing or a person worthy of protection – to be able to insure it. The legitimacy of the interest is typically only called into question to prohibit speculation through insurance. In life insurance, for instance, the Civil Code requires the policyholder to expressly declare its interest in the life of the insured person, and a kinship or likewise worthy link between insured person and policyholder is required for the contract to be valid.

Insurance contracts are consensual, although the Brazilian Civil Code requires that the insured submit an insurance proposal in writing to the insurance company. Policies are seen as having only probatory value of the agreement, and it is longstanding practice that insurance contracts can be formed by simple silence of the insurer after receiving a proposal.

Recently, and in contravention of the Brazilian Civil Code, SUSEP has tried to change this through Circular Letter No 642/2021. Under this illegal but still-in-force regulation, proposals must be signed by the insured and acceptance must be given in writing or in other specific way by insurers.

According to the Brazilian Civil Code (which is supplemented by SUSEP Circular Letters No 621/2021 and No 667/2021, and by CNSP Resolution No 407/2021), the insurance policy should at least contain, in a clear and direct way:

• the name of the insured or beneficiary, if applicable;
• protected interests;
• covered risks;
• liability limits;
• premium owed by the insured; and
• contract duration.

Parties not named as insureds can be beneficiaries of an insurance contract. This is the rule and not the exception in some branches (eg, construction all risks (CAR) insurance). The insured must of course have a legitimate interest threatened by insurable risks in that specific insurance branch to be able to benefit from coverage.

Disclosure obligations fall only on the insured taking the policy if they are the only party involved in negotiations. In certain insurance branches, such as bonds, insurance companies may question policyholders and beneficiaries alike before writing the risk. In that case, both are obliged to disclose what was asked, and insurers must be informed of what is obviously relevant to risk assessment.

The rights and duties of the parties are not inherently different regarding reinsurance and consumer contracts. As with any rules related to good faith and fair dealing, case law adopts a more defensive stance when dealing with consumers and other vulnerable parties, while weakening the influence of many protective statutes on commercial contracts negotiated by experts.

Alternative risk transfer (ART) transactions are not at all common in Brazil, although a recent federal law (Law No 14.430/2022) created an insurance-linked security (the Letra de Risco de Seguro – LRS) and a specific type of insurance company (the Seguradora de Proposito Específico – SSPE) focused on ART.

Despite some regulation on the matter (CNSP Resolution 453, CMN CNSP joint resolution 9), as far as is known, the market has not engaged much with these new tools and there is no regulation classing them as insurance or reinsurance contracts. At the time of writing, the IRB, Brazil’s largest reinsurer, is set to be the first to issue LRS in 2025.

International ART transactions are even rarer in Brazil. Local insurance and reinsurance companies do not frequently use them and there is no specific regulation on foreign ART transactions. Considering the broad and economically focused language of CNSP Resolution No 422/2022, which establishes general rules on solvency, ART transactions should arguably be considered reinsurance for solvency purposes.

Where the insurance policy is drafted only by the insurance company (or by reinsurers), as is the case in almost all situations, the Brazilian Civil Code (Law No 10.406/2002) imposes the so-called contra proferentem interpretation – ie, an ambiguous contract term should be construed against the drafter. Despite clear wording in the law, case law has been somewhat reluctant to broadly interpret insurance policies and frequently defers to the actuarial stability argument. As policies in Brazil are notoriously badly written, resorting frequently to mistranslations from international sources, the contra proferentem rule should not be used sparingly.

In addition to this specific and overstated rule in insurance, Brazil’s rules on interpretation are very similar to those found in other civil law jurisdictions. The aim of any contractual interpretation is to reveal common intent registered in a party’s declarations. To that end, circumstances, “usual practice”, reasonableness and good faith are all tools used in revealing or reconstructing the common will manifested in the declarations – there are few binding rules on interpretation, such as the above-mentioned contra proferentem rule. Four corners clauses, although frequent in commercial contracts, hold little sway.

Although not referred to as such, as a “warranty” is a foreign concept for civil law jurisdictions, most policies impose duties on the insured whose breach entails loss of coverage, or which must be observed to ensure coverage in the case of loss. It is not clear how far insurers can impose these duties on policyholders, as Decree-Law No 73/1966 prohibits any clause that affects coverage not linked to a legally established cause of coverage loss, such as risk aggravation or late-claim notice. Case law typically combines both the policy clauses and the closest legal provision in most rulings, requiring that the warranty breach be directly related to the loss discussed.

As with warranties, “conditions precedent” are a foreign concept for civil law jurisdictions, and are rare in insurance contracts in Brazil. Insurers usually do not tie the existence of the insurance contract to any specific event. A noteworthy exception are the “open policies” in transport insurance, which require the insured to disclose to the insurer certain facts before coverage is granted to each trip.

Disputes over coverage are usually addressed by ordinary litigation. Arbitration is rare in insurance, even though policies frequently allow arbitration as a dispute resolution method. Under the Brazilian Consumer Protection Code, compulsory arbitration clauses are forbidden in consumer contracts. By contrast, arbitration is commonplace in reinsurance contracts.

Under the Brazilian Civil Code (Law No 10.406/2002), the statute of limitations for an insurance claim in Brazil is one year. The date on which this period starts is a very disputed subject. The dominant view in case law was that the period starts from the loss discovery and is suspended during loss-adjusting procedures. More recently, the courts have adopted a different starting point: the moment in which the insurer refuses coverage to the policyholder or beneficiary.

Any beneficiary can enforce an insurance contract, be they named in the policy or not. Injured third parties can also directly enforce an insurance contract against the insurer in civil liability insurance, despite breached warranties by the insured.

According to Decree-Law No 4.657/1942, the law applicable to insurance contracts is the law of the proponent’s residing county, and Brazilian courts have jurisdiction over disputes where the respondent resides in Brazil, or where Brazil is the place in which performance should be rendered.

As discussed in 3.1 Overseas-Based Insurers or Reinsurers, Brazil is one of the last jurisdictions in which party autonomy on choice of law is not clearly established, despite some rulings to this effect by the country’s highest federal court.

According to Brazil’s Civil Procedure Code (Law No 13.105/2015), litigation in Brazil starts with a complaint filed either in a state or federal court. After preliminary analysis, the judge orders the respondent to be served.

Against the claimant’s complaint, the respondent may either recognise the claimant’s enforced right or respond to the complaint, which can lead to a counterclaim.

The judge then enquires of the parties regarding evidence. After all relevant evidence is procured, parties may present final arguments summarising all that has been presented thus far.

The judge subsequently renders their final judgment on the case. The losing party may appeal to the state or regional federal court, which reviews the ruling made by the singular judge in collegiate bodies. After the regional or state court reviews the decision, the losing party can appeal either to the Superior Court of Justice (Superior Tribunal de Justiça – STJ) on grounds of federal law violation by the lower court, or to the Supreme Federal Court (Supremo Tribunal Federal – STF) on grounds of a constitutional violation by the lower court or the STJ.

Pursuant to Brazil’s Civil Procedure Code (Law No 13.105/2015) and Arbitration Law (Law No 9.307/1996), national provisional and definite rulings or arbitration awards can be enforced in Brazil, requiring either a simple request or a specific petition. By contrast, under the Brazilian Constitution, enforcement of foreign judgments must be previously approved by the STJ, which assesses whether or not the judgment violates Brazil’s public policy or res judicata rule.

Arbitration clauses can be enforced in both commercial insurance and reinsurance contracts under the Brazilian Arbitration Law (Law No 9.307/1996). As insurance contracts are frequently formed by adhesion to already-drafted polices, the adhering party must consent either by specifically signing the arbitration clause or by enforcing the arbitration clause themselves.

The Brazilian Arbitration Law (Law No 9.307/1996) treats an arbitration award as having the same legal effect as a court ruling. As such, the same restrictions mentioned in 9.4 Enforcement of Judgments apply to foreign arbitration awards, though the approval procedure is governed by the Arbitration Law (Law No 9.307/1996), which mirrors the New York Convention (incorporated by Decree No 4.311/2002).

Alternative dispute resolution methods such as mediation play a small role in insurance and reinsurance disputes in general, despite being a growing field in other matters.

Under the Brazilian Civil Code (Law No 10.406/2002), insurers are liable for all damages caused by late payment of claims if the loss-adjustment process is not regularly conducted. According to SUSEP Circular Letter No 621/2021, insurers also have 30 days after receiving all requested documents to settle the claims. If the deadline is not observed, interest must be paid to the insured.        

According to the Brazilian Civil Code (Law No 10.406/2002), insurers have a right of subrogation following the payment of a claim – any act of the insured that diminishes or extinguishes this right is considered void.

In general, case law pertaining to subrogation has been overprotective of insurance companies. Even though they succeed the insured as creditor before the responsible party, insurers are subject to new limitation periods, extending claims almost indefinitely, and some case law frees them even from arbitration clauses that bind the insured.

Insurtechs are widely regarded as a transformative force in the Brazilian insurance market in recent years, comparable to the significant impact fintechs have had on the financial services sector. However, their potential to match such high expectations makes it challenging to accurately assess the tangible progress driven by insurtechs in the Brazilian insurance landscape.

Insurtechs have certainly had an impact on insurance distribution. Most successful Brazilian insurtech enterprises tackle how insurance is processed internally (eg, premiums and claims), promoted to the consumer and sold to the policyholder – not insurance contracts or economics. In that capacity, there is healthy co-operation between traditional innovation-focused business models and insurance businesses, who feel the impulse to improve provided services. The biggest insurers in Brazil have dedicated teams and investment lines for improving internal processes.

Nevertheless, insurance is a more conservative business than financial services in general (especially banking). It is difficult to affect the core product without financial backing from a large financial conglomerate or international reinsurers. Underwriting, insurance policies wording, loss adjusting and claims settling are, by their nature, very similar between all insurance and reinsurance companies. There is no insurance without a certain degree of standardisation. Hence, in core insurance, insurtechs are yet to have any meaningful impact, particularly on insurance branches that rely heavily on reinsurance (eg, large or jumbo risks), although some marginal change can be seen (eg, in bike insurance).

In the last few years, Brazilian regulatory authorities have been playing a very active role in fostering innovation in the insurance sector. The biggest action taken is the creation of the so-called regulatory sandbox (CSNP Resolutions 381/2020 and 417/2021), in which new insurtechs can be incorporated with less stringent regulatory requirements and oversight for a maximum period of three years. The aim is to allow new ideas to be tested in a friendlier – albeit controlled – environment.

Despite these efforts, it is too early to tell how successful they have been. Insurtechs, although providing new and interesting solutions, are currently very far from being true competitors to the established insurance companies in Brazil, who are mainly branches of the biggest financial conglomerates in the country.

The regulatory authorities have been quick to introduce regulation on new insurance policy types such as cyber-risks insurance (a special liability policy governed by SUSEP Circular Letter 638/2021). The market has not, in turn, been so eager to face emerging risks. High deductibles and restrictive underwriting have been the usual answer, as new insurance products are seen as too uncertain or volatile.

This is not an isolated trend in the Brazilian insurance sector. Despite the relevant general growth in the last few years, anything other than small retail insurance is facing persistent crises and being left to international groups and reinsurers who are willing to write.

Brazil is not a leading market in developing alternative solutions to address emerging risks. Almost all innovation on insurance comes from more established markets – ie, Europe (in particular the UK) and the United States.

The new Insurance Contract Law (formerly PLC 29/2017), sanctioned on 9 December 2024, represents a transformative step in modernising Brazil’s insurance legal framework. Scheduled to take effect on 11 December 2025, this comprehensive legislation redefines core aspects of insurance contracts, integrating established best practices from the Brazilian market with proven solutions from international jurisdictions such as Portugal, Spain, France, Belgium, Switzerland and Germany.

Primarily focused on updating contractual regulations, the law also briefly addresses reinsurance and insurance intermediaries. Its 134 articles are structured into six titles:

• General Provisions;
• Property and Casualty (Non-Life) Insurance;
• Life Insurance;
• Mandatory Insurance;
• Statute of Limitations; and
• Final Provisions

Although comprehensive in scope, the legislation is more concise compared to similar frameworks in countries such as France and Germany. However, this streamlined approach leaves significant room for complementary regulations to be issued by SUSEP and CNSP. Therefore, its effectiveness will depend, to some extent, on the proactive engagement of regulatory agencies and on the insurance industry’s ability to adapt effectively to the new rules.

This modernised legal framework is expected to significantly enhance Brazil’s insurance market, promoting competitiveness and aligning it with international standards. The phased implementation provides the necessary lead time for stakeholders to align practices and ensure a smooth transition.