SUSEP publishes new regulations applicable to Carrier’s Liability Insurance

The Superintendence of Private Insurance (“SUSEP”) published Resolution No. 472/2024, providing for the new regulations  applicable to Liability Insurance for Cargo Carriers.

The new regulations result from the changes in Article 13 of Law No. 11,442/2007, established by Law No. 14,599/2023, which introduced significant changes to the operation of liability insurance for cargo carriers.

In addition, the resolution consolidates the provisions relating to liability insurance applicable to all types of transport:

• Air Cargo Carriers (“RCTA-C”);
• Waterway Cargo Carriers (“RCA-C”);
• Railway Cargo Carriers (“RCTF-C”);
• Road Cargo Carriers (“RCTR-C”);
• Multimodal Cargo Transport Operator (“RCOTM-C”); and
• Road Carriers due to Disappearance of Cargo (“RC-DC”).

The resolution reinforces the mandatory nature of contracting the insurance mentioned above, except for Multimodal Cargo Transport Operator (RCOTM-C) insurance.

Regarding the provisions addressing the RCTA-C, RCA-C, and RCTF-C insurance plans, the resolution does not introduce innovations compared to the resolutions that previously addressed this type of insurance and that are now repealed.

The main highlights are the changes introduced to the provisions of RCTR-C and RC-DC insurance, especially those relating to contracting a single policy linked to the National Registry of Road Cargo Carriers (“RNTR-C”) (art. 9, sole paragraph; art. 18, sole paragraph and art. 39, § 4), a limitation in line with the provisions of paragraph 5 of art. 13 of Law No. 11,442/2007, including the changes introduced by Law No. 14,599/2023:

“§ 5 The insurance provided for in items I and II of the caput of this article will be contracted through a single policy for each type of insurance, per insured person, linked to the respective RNTR-C.”

Thus, according to the provisions mentioned above, the insured will no longer be able to maintain more than one RCTR-C and RC-DC policy with the same insurer or another, under penalty of losing the right to insurance compensation and cancellation, without any rights to a premium refund, which, in our view, indicates that the purchase of RCTR-C and RC-DC insurance policies by the shipper on behalf of the carrier would be restricted to cases in which the carrier operates for a single shipper.

Article 39 of the resolution provides for exceptions to the contracting of a single policy in the situations described below, however, these exceptions only apply to other insurance plans covered by the regulation, not extending to RCTR-C and RC-DC policies (paragraph 4):

(i) for situations in which the insured has branches that are not covered by the main policy and provided that the shipping location is mentioned in each of the additional policies;

(ii) when the other additional policies address a certain type of product, not covered by the main policy; or

(iii) when the shipment amount exceeds the Maximum Limit of Guarantee (“MLG”), and the insurer refuses to accept it within the deadlines established in the resolution.

Regarding RCTR-C, the regulation reinforced the coverage possibility due to “fire or explosion in the transporting vehicle located in the warehouses, depots, or yards used by the insured, in the locations of departure, overnight stay, transfer and shipping destination, even if the goods or products transported are located outside the aforementioned vehicle.” (art. 10, item III).

As for RC-DC, the resolution introduced the following changes in relation to the risks covered, compared to the provisions of CNSP Resolution No. 422/2011, which is now repealed:

(i) in the case of risks involving total or partial cargo disappearance due to misappropriation, fraud, simple or qualified theft, and simple extortion or through kidnapping, it is no longer necessary for this to have occurred simultaneously with that of the vehicle;

(ii) in the case of cargo theft, there is no longer a provision that, for the purposes of characterizing coverage, the perpetrator of the crime has taken control of the transporting vehicle, through serious threat or use of violence against the driver;

(iii) in relation to the risk of theft of goods loaded in the transporting vehicle, while parked in the insured’s warehouses, the new resolution changed the maximum period of time for which the goods can remain in the warehouse from 15 calendar days to the period to be established in the insurance contractual conditions, which must not be less than 15 or more than 30 days;

(iv) in relation to the risk of theft of goods during river shipping in addition to road transport, the resolution no longer limits the coverage to the Amazon Region, nor does it require the opening of a police investigation; and

(v) establishing a deductible in this insurance continues to be permitted, however, it cannot involve amounts or percentages incompatible with the insured’s economic and financial capacity.

As for the RCOTM-C insurance, the resolution highlights that it does not replace the mandatory civil liability insurance for carriers of other categories if they are third parties hired by the multimodal carrier operator to carry out the shipment (art. 14).

Also, if the multimodal cargo transport operator has its own or a leased fleet in any transport category, it will be exempt from purchasing the respective mandatory insurance (except for RC-DC) if it contracts the RCOTM-C insurance.

Regarding the provisions that are applicable to all the insurance types covered by the resolution, the draft establishes the following:

• Prohibition on collective contracting (art. 22): The policy must be individualized per insured.
• Covered risks (arts. 23 to 27): In addition to the damage caused to cargo, the policies will also cover expenses aimed at avoiding loss, mitigating damages or saving goods, up to the limit of the insured amount for the shipment if specific coverage is not contracted; as well as defense costs, if provided for in the contract. Regarding the risks of fire or explosion while storing goods and products by the insured, the resolution changed the previous provision relating to the time limit to determine that coverage will apply to goods that have been kept for the minimum term of 15 days and a maximum of 30 days.
• Defense costs (art. 25): The resolution establishes that the policy wording must provide for the cases of reimbursement of defense costs of the insured and the claimant. In our view, the reference to the reimbursement of the claimant’s defense costs is inappropriate, as is the provision for a limitation “to the amount corresponding to the difference, if any, between the maximum limit(s) established in the policy in force, and the amount for which the insured is civilly liable”, which is unclear.
• Maximum limit of guarantee (art. 32): The MLG for each shipment must be provided for in the policy and the insured must notify the insurer if the operation exceeds this limit within three business days in advance of the shipment date, considering that the insurer must respond within the same deadline, under penalty of implied acceptance.
• Proposal (arts. 35 to 37): The insured must notify the insurer of any changes in the proposal within three business days in advance of the date when the intended change will become effective, considering that the insurer must respond within the same deadline, under penalty of implied acceptance. Regarding the RCTR-C and RC-DC insurance plans, the Risk Management Plan must be agreed upon between the carrier (insured) and the insurer, in a specific document that will not be subject to SUSEP.
• Declaration of cargo (arts. 40 and 41): The insured must notify the insurer of all shipments covered by the policy before shipping, by submitting the bills of lading or an equivalent tax document. For the RCTR-C and RC-DC insurance, in cases where the issuance of the Electronic Manifest of Tax Documents (“MDF-e”) is mandatory, the insured must submit the complete file electronically.
• Compensation (arts. 50 and 51): For mandatory insurance plans, the insurer will pay compensation directly to the third-party claimant, upon the insured’s knowledge. Depending on the criteria established in the policy, the insurer can authorize the insured to make the payment, reimbursing them within ten business days (which is a different deadline for other types of insurance) from the date when the proof of payment was submitted. As for insurance plans that are not legally mandatory, the policy must establish the indemnity payment method – whether by reimbursement, direct payment to a third party, or any other methods chosen.

Regarding the Waiver of Subrogation (“DDR”), widely used by insurers in transport operations, art. 53 of the resolution provides that the existence of a clause to this effect, or of any other instrument with the same purpose, does not exempt the contracting of mandatory civil liability insurance for the carrier. SUSEP’s approach towards this instrument appears to resolve the dispute that had been created in the market in the sense that such waiver had allegedly been extinguished through Law No. 14,599/2023 – which, in fact, did not occur.

In addition, in line with the provisions of paragraph 9 of Art. 13 of Law No. 11,442/2007, with the amendments to Law No. 14,599/2023, Art. 54 of the resolution provides for the possibility of the shipper – upon contracting the freight – to require that the carrier submit a full copy of the RCTR-C and RC-DC insurance policies, including their contractual conditions, rates, premium, and the Risk Management Plan.

As expected, upon submission to public consultation, this resolution does not suggest a standardized policy wording but provides general guidelines and minimum mandatory elements that must be included in each insurance product. This is in line with the positioning that SUSEP has adopted to make both the contractual structuring and the creation of insurance products more flexible.

As for the products currently traded, articles 56 and 57 of the resolution determine 180 days for adjusting insurance plans to the new regulations, highlighting that the RCTR-C and RC-DC insurance plans that are not in compliance will be automatically cancelled.

Finally, the resolution repeals CNSP Resolutions No. 182/2008; No. 183/2008; No. 184/2008; No. 219/2010; No. 247/2011; No. 256/2012; and No. 361/2018.

Demarest’s Insurance, Reinsurance, Health, and Private Pension team has been closely monitoring the changes in transport insurance and the market practices following the publication of Provisional Measure No. 1,153/2022 and Law No. 14,599/2023 and remains available to provide any further clarifications that may be necessary.