After a long time of expectation from the market, SUSEP regulates the D&O insurance policies
SUSEP Circular No. 541, of October 17, 2016, establishes the guidelines to the D&O insurance coverages and provides for the definitions and concepts to be adopted, besides the coverage limit, scope and form of commercialization of the D&O insurance policies.
The new insurance policies to be submitted to SUSEP for approval shall be compliant with the new Circular. Insurers that already sell D&O insurance products shall submit new products in accordance with Circular No. 541, until February 28, 2017. The products developed before the enactment of the Circular shall be terminated by June 1, 2017, except in case of products that will expire before March 31, 2017, the policy may be renewed once to be in force for a maximum term of one year.
Change in the rules and criteria for the Engineering Products
Circular No. 540 changed certain rules of the Engineering Risk policies, among which the removal of the limitation in 25% of the Maximum Limit of Indemnity (MLI) for the insurance coverage over equipment to be assembled and installed, which shall be maintained in the construction after its conclusion, and over the respective work execution necessary to assemble and install such equipment.
Other important changes are the inclusion of the obligation to reserve a minimum of 5% of MLI to the Basic Coverage for the necessary expenses to remove construction waste and associated items and the possibility to offer additional coverage for moral damages.
The products in force shall be adapted until April 15, 2017.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.