CNSP Resolution 392/2020: Criteria for Mandatory Insurance Operations

On October 30, CNSP Resolution 392/2020 was published establishing criteria for mandatory insurance operations referred to in paragraphs “g” and “h” of Article 20 of Decree-Law No. 73, of November 21, 1966: (i) mandatory insurance for buildings divided into autonomous units; and (ii) mandatory insurance for fire and transportation of goods belonging to legal entities.

Resolution 392/2020 requires that the insurance products must be contracted to comply with the legislation regarding mandatory insurance, as follows:

• Mandatory insurance for a building or group of buildings, covering all autonomous units and common areas, against the risk of fire or destruction, total or partial, shall be contracted through comprehensive condominium insurance;
• Mandatory insurance for the transport of goods belonging to legal entities shall be contracted through transport insurance;
• Mandatory insurance against fire and risks of movable and immovable property belonging to legal entities shall be contracted through comprehensive insurance, named perils coverage, or operational risks insurance.

When establishing the lines of insurance products that should correspond to the legal requirement for contracting mandatory insurance, the Resolution refers such verification of the adequacy of companies’ operations to the standards of Decree-Law No. 73/1966.

Demarest’s Insurance and Reinsurance team is available to provide any clarifications on the subject.