New Vehicle Liability Insurance regulation providing for road freight submitted to public consultation

The Superintendence of Private Insurance (“SUSEP”) opened a public consultation to address a draft resolution providing for new Vehicle Liability Insurance (“RC-V”) regulations concerning coverage for personal injury and material damage caused to third parties by a vehicle used in the road transport of goods.

The new resolution derives from provisions of article 13, paragraph III of the Law No. 11,442/2007, as amended by Law No. 14,599/2023, which provided for the compulsory contracting of RC-V insurance by road carriers.

The draft does not establish standard contractual conditions for RC-V insurance, following SUSEP’s market regulation approach to preserve the free enterprise system and the freedom to exercise economic activities, in line with Law No. 13,874/2019.

The main points dealt with in the draft are:

• Scope (articles 2 and 3): The scope of the insurance is to provide coverage for personal injury and material damage caused to third parties either by the vehicle used in the freight or by the cargo itself while transported in the same vehicle. The insured party is the road carrier who is duly registered with the National Registry of Road Cargo Carriers (RNTRC).
• Autonomous Cargo Carrier (“TAC”) (article 2, paragraphs 2 and 4): When subcontracting the TAC for transportation, the insurance must be contracted by the service contractor on behalf of the TAC for each freight. The TAC will have its own RC-V policy in cases where it has not been subcontracted.
• Collective contracting (article 2, paragraph 3 and article 3, paragraph 5): A collective policy may be contracted by the service contractor on behalf of more than one subcontracted TAC. A globalized policy can also be contracted for the entire vehicle fleet of the insured.
• Defense costs (article 3, paragraphs 1 and 2): Taking out insurance for the reimbursement of judicial costs and attorney fees incurred by the insured and/or claimant is optional, and these expenses must relate to claims covered by the policy.
• Exclusion of damage to the cargo’s owner (article 3, paragraph 4): Damage caused to the cargo’s owner must not be covered under RC-V policies.
• Insured amount and reintegration of limits (article 3, §§ 6 and 9): Insurance must be contracted with a minimum coverage of 35,000 Special Drawing Rights (“SDR”) for personal injury (currently, USD 46,342.97) and 20,000 SDR for material damage (currently, USD 26,481.70), per vehicle. If a loss is paid below the policy limit, the insured amount will be automatically reinstated without charging any additional premium.
• Deductible (article 3, paragraph 11): Establishing a deductible is prohibited for mandatory coverage, but optional for additional coverage, such as defense costs of the insured.
• Validity of existing contracts (articles 4 to 6): RC-V insurance contracts that were executed or renewed prior to Provisional Measure 1,153/2022 and Law No. 14,599/2023 will remain valid until their expiration date. If these contracts have been extended by endorsement, they must comply with the applicable legislation at the time of the extension. All contracts signed after the provisional measure and the law enter into force must comply with their respective provisions.
• Second-risk insurance (article 7): The personal injury coverage of RC-V insurance is to be paid as a second risk of the compulsory vehicle liability insurance (DPVAT) insurance coverage.

As for the products currently traded, article 8 of the draft provides for a period of 180 days for adapting insurance plans to the new rules. In addition, SUSEP may create its own “insurance branch” to register operations relating to RC-V insurance.

Interested parties can submit contributions to comas.rj@susep.gov.br, by filling in a specific standardized table, by  April 19, 2024.

Access the full resolution draft.

Demarest’s Insurance, Reinsurance, Health and Private Pension team has been closely monitoring transport insurance changes and market trends following the publication of Provisional Measure No. 1,153/2022 and Law No. 14,599/2023. We will continue to monitor this topic and remain available to provide further clarifications.