Adriano Almeida: Legal security of guarantees

In almost 20 years since its regulation, in 2003, by Circular 232/2003 issued by the Superintendency of Private Insurance (Susep), judicial guarantee insurance has gained space in Brazil. This year, with the new circular 662/2022, insurance reaches its best regulation, which stands out for its legal certainty.

To get an idea of ​​the context at the time, the reinsurance market in Brazil remained closed, with only the Instituto de Reseguros do Brasil (IRB) being authorized by law to operate as a reinsurer in any operation of any branch or wallet. Among other factors, monopoly being one of them, the price volume of previous years, despite its growth, remained at relatively low levels for the modality’s potential.

In June 2003, with the publication of Circular 232, the minimum information to be contained in policies, general conditions, special conditions and other provisions was finally made public, a breakthrough for the time with regard to surety bonds in general. , a well-intentioned wording which, for the first time, set in stone the new judicial modality.

Despite the express forecasts, the challenge of developing the new modality was great since the judicial guarantee insurance had different characteristics and needs from the traditional execution risks usually marketed in Brazil as a result of the appeals law. 8.666/93-94, in which there was an express provision to take out performance bond insurance. There was a lot of resistance and most insurers in the market wouldn’t open their portfolios until around 2010.

Until now, it has been very exciting to think about the prospects of permeating the market by judicial guarantee insurance, a new and promising modality in a notoriously litigious country, but to paraphrase a phrase attributed to Garrincha, addressing his coach at the 1958 World Cup in a game against the Soviet Union: “you had to get along with the Russians”, or rather with the IRB.

Long story short, there have been months of debates and presentations to the IRB to convince them to support an automatic line for issuance of the in-court modality by the insurer within shorter timeframes of 15 days. Namely, to receive reinsurance approval from the IRB at that time, one had to submit a reinsurance offer in a specific form, on a case-by-case basis, often traveling to Rio de Janeiro at the IRB headquarters for a conversation personal , in loco, and giving everything was ok to finally receive the long-awaited Gerif Fax with the confirmation of the required capacity, a process that took months and made the dynamics of the judicial modality unfeasible.

By leaps and bounds and with a market still closed to reinsurance, bonding in general has developed, with a significant contribution from the legal segment. In the years that followed until the publication of the circular Susep 477 in 2013, there were periods with really expressive results in the segment, with a growth in the volume of premiums between 2005 and 2013 of the order of almost 1000%.

It is estimated that in 2013, 90% of the generation of premiums in the surety line was linked to the issuance of insurance in the judicial modality, a proportion that has been maintained in the following years.

During this period, important laws were created, such as the important law that gave rise to the reform of the Brazilian Civil Procedure Code (CPC) in 2009, and began to provide for judicial guarantee insurance as an appropriate modality. to secure judgment. In addition to the CPC, it is essential to recall the work carried out in 2009 by the Applied Tax Studies Group (Getap) which, with great skill and the support of the insurance market, constructed the first order published by the Public Prosecutor’s Office General of the National Treasury, whose purpose was to regulate within the framework of the PGFN, the acceptance of judicial guarantee insurance policies to guarantee the debts registered as active debt of the Union, a milestone that gave even more of fuel to the segment.

In 2013, and driven by so many novelties, laws, regulations, infrastructure projects such as the PAC (Economic Acceleration Plan) launched in 2009-2016, discovery of the pre-salt layer, preparation for the World Cup which would take place in Brazil in 2014 and after the Olympic Games in 2016, and fundamentally due to the traction that judicial guarantee insurance has gained in the Brazilian business world and in the judicial system, Susep edited and published Circular 477 /2013.

At this point in history, out of curiosity, the wording of Circular 477/2013 was confusing and extensive. With several chapters and rules allowing insurers to register their technical notes, distinctions were made between products intended for the public sector and the private sector, and Susep stopped counting each modality separately, which gave excellent visibility to the operators of this market, considering simplifying between lines 0775 and 0776. But the most important thing that she did not attack: how to translate, simplify and best present the product to policyholders.

Be that as it may, looking at the glass half full, the circular introduced in Chapter II, Modalities VI, VII and VIII, a very broad formulation on the insurance of judicial guarantee, the insurance of judicial guarantee of executions Tax and Installment Court Guarantee Insurance, as well as more comprehensive than the plain text of 2003, and which was important at the time given the various orders from federal and state prosecutors that were being edited and published at any time. Inevitably because of so much detail, the wording of Circular 477/2013 provided the north and balance for insurers and policyholders to understand each other in their different applications.

The years that followed were truly memorable from the point of view of the collection of premiums by insurance companies and the permeability of products, whether in the Judiciary or in other natures, oil risk, real estate, financial , many new possibilities have opened up and the result has been a growth between 2003 and 2021 of 308%, from R$1 billion to R$3 billion in the volume of written premiums, even taking into account the last two years affected by the Covid-19 pandemic, during which the market remained stable.

There’s a saying in the law that says: give me the suit and I’ll give you the right. It is a legal phenomenon known as the law between fact and norm, in which, through a process of knowing the reality, the appropriate norm is born and applied. The knowledge gained as a result of social and cultural changes, etc., means the need to know the facts, and from this arises the need for a new standard or its adequacy. That said, what has been noticed is that the adjustments promoted by Susep in previous circulars had positive intentions of regulating and actualizing the norm, social aspirations and related parts of a developing ecosystem and maturing.

And so we have arrived in 2022 with the editing and publication of the New Circular 662/2022 for sureties, in force since May 2.

Unlike previous circulars, the new circular 662/2022 surprises with its simplicity, objectivity and freedom. There are only 37 articles, which are more concerned with giving autonomy and freedom to insurers than with regulating in detail the way in which they must act and standardize their products.

The new circular reflects the needs of a mature market hungry for freedom of action. The new circular is manifested by autonomous insurers in the drafting of policies and the approval of new products; simpler clauses that adhere to each specific case; streamlined two- or three-page policies and removal of terms and conditions following the extinction of product standardization.

Looking at the past and suggesting future projections, I conclude thinking that the freedom given by Circular 662/2022 to the insurance market gives rise to a new cycle of promise and growth for the surety bond market, with new hedging possibilities, different possibilities of counter-collateral, better market access for borrowers, the characteristic of raw materials tends to change due to the differentiation of new non-standard products and finally it will bring much more legal certainty and clarity to the main party in this relationship, the insured.

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