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Law 14,544/2023 – Caixa Econômica Federal acts as administrator of the DPVAT Insurance in 2023
On April 4, 2023, the President of the Board of the National Congress, Senator Rodrigo Pacheco, enacted Law n. 14,544/2023, which assigns to Caixa Econômica Federal (CEF) in the period from January 1 to December 31, 2023, the management of funds raised in the Compulsory Insurance Fund for Personal Damage Caused by Road Motor Vehicles Land, or for their Cargo, to Persons Transported or Not (FDPVAT), as well as the analysis of claims for compensation and their payment.
DPVAT Insurance was created in 1974 with the aim of compensating victims of traffic accidents, whether they are drivers, passengers or even pedestrians. Its fund is filled with the annual payment of a mandatory premium by vehicle owners, but since 2021 the charge has been suspended as determined by CNSP Resolution No. 399/2020.
For 13 years, DPVAT Insurance was managed by Seguradora Líder. However, as of January 1, 2022, it has been managed by Caixa, following a contract signed with the Superintendence of Private Insurance (SUSEP).
The new norm was enacted after the approval of Provisional Measure n. 1,149/2022 (MP), published on December 21, 2022. Below are the main highlights:
- CEF will act as the Fund’s operating agent and will be responsible for carrying out claims for indemnities by policyholders, as well as for their payment – including indemnities determined by court decisions – which must occur (i) to the account and within the limits of the resources available in the FDPVAT and (ii) digitally.
- Ensures that the operating agent receives remuneration due to the activities carried out, provided for in art. 1 of the Law, and the form and amount to be received will be defined by the Conselho Nacional de Seguros Privados (CNSP) in accordance with the proposal presented by CEF and forwarded by SUSEP, observing the economic-financial balance of the operator and FDPVAT agent.
- Amends art. 3 of Law No. 14,075/2020, includes a new item, which deals with the possibility of automatically opening a digital social savings account for payments of DPVAT compensation.
Also in December, CNSP Resolution No. 457 of 2022 (Resolution) was made public. The Resolution outlined current Law No. 14,544/2023 and also amended CNSP Resolution No. 399, of December 29, 2020. Below, the main points of the Resolution are highlighted:
Regarding the attributions of the Operator Agent
- It is incumbent upon CEF to carry out asset, financial, technical and accounting management of the Fund’s resources represent its judicial and extrajudicial interests, observing the provisions of the Statute and comply with the other legal and regulatory provisions applicable to it.
- The financial statements must be prepared from the base dates of June 30th and December 31st, accompanied by the corresponding reports and opinions of the independent auditors and then forwarded to SUSEP by September 30th and March 31st.
- The following technical provisions must be set up in the FDPVAT on a monthly basis: (i) Provision for Unsettled Claims (PSL) (ii) Provision for Claims Occurred but Not Reported (IBNR) (iii) Provision for Related Expenses (PDR) (iv) Other Technical Provisions (OPT) (v) Technical Surplus Provisions (PET) and (vi) Provision for Administrative Expenses (PDA). These and the financial statements shall consider the semi-annual actuarial report to be provided by the Operating Agent.
- If the Agent verifies that the Fund’s resources will be insufficient for the provisions, it must immediately notify SUSEP at least 90 (ninety) days in advance of the date foreseen for the end of the availabilities, so that the appropriate measures can be adopted. After the notification, if measures have not been taken to recompose the resources, the Operating Agent will not receive new claims for compensation for accidents that occurred after the projected period for the depletion of the provision.
With regard to requests related to accidents that occurred in 2023
The management and operation of claims for compensation that occur between January 1, 2023, and December 31, 2023, involve:
- receipt of claims for compensation.
- analysis of requests and verification of the presence of the necessary assumptions for payment, with the performance of medical expertise, when necessary.
- analysis and payment of indemnities, within a period not exceeding 30 (thirty) days, counted from the initial request or the complete presentation of the documentation that proves the right, including those necessary for the granting of the request.
- maintenance of the technological structure, operational capacity compatible with the complexity and scope of the operation and face-to-face service structure if necessary.
- continuous development and maintenance of a system (application for mobile devices) for receiving claims for compensation, which must be in full operation throughout the term of validity of the obligations arising from the operation and integrated with the system used in face-to-face assistance.
- implementation and maintenance of a page or website, with guidance to the general public regarding the management and operation of claims for compensation, as provided for in this Resolution.
- structuring, providing, maintaining and using fraud prevention and combat tools.
- provision of personal service throughout the duration of the obligations resulting from the operation, observing the rules inherent to the regular operation of bank branches, regardless of the availability of the application for mobile devices.
Regarding the Inspection and Governance of the FDPVAT
- It is incumbent upon the Operating Agent to submit to SUSEP on a monthly basis (i) presentation with management information on the operation, by the 15th day of the month following the reference month (ii) statements, data and information to be regulated by SUSEP and (iii) copies of the balance sheet and accounting ledger of all accounts referring to expenses incurred with FDPVAT resources up to the 45th day after the closing of the reference month.
- It is incumbent upon SUSEP (i) to formally designate representatives to manage and supervise the provision of services and forward the designation to the Operating Agent (ii) resolve doubts, provide information and clarifications to the Agent, aiming at the proper provision of services, taking into account the procedures, deadlines and layouts established in the legislation in force (iii) inform the Operating Agent in advance concerning the edition, alteration and updating of normative acts related to the provision of services and that require adequacy of the operational processes (iv) immediately notify the Operating Agent in the event of irregularities or abnormalities that it becomes aware of in the processes under its management (v) pronounce on any irregularities or abnormalities pointed out by the Agent (vi) define the reports and layouts that will be made available by the Agent (vii) clarify the Operating Agent on matters not provided for in the rules and criteria established for the management of the FDPVAT or for the management and operation of claims for compensation (viii) adopt measures to enable the availability of resources destined to the FDPVAT and (ix) issuing an opinion on the FDPVAT’s annual financial statements and submitting them to the CNSP for appreciation
- If it is found that the Operating Agent or anyone who carried out the work on its behalf has caused damage or harm to the FDPVAT assets resulting from the situations provided for in art. 4 of its Statute expenses that do not meet the conditions set forth in the Statute shall also consider the contradictory and ample defense in an administrative proceeding initiated by SUSEP. After the final decision of the CNSP there may be a reimburse of the fund and may be a deduction from their remuneration.
Finally, regarding the amendment to CNSP Resolution No. 399 of 2020, for 2023, the DPVAT insurance premium will be equal to zero. There will be no issue of the insurance ticket and this will be considered paid, for all purposes, the insurance premiums for all vehicle owners subject to registration and licensing under the CTB.
Despite the fact that Law n. 14,544/2023 partially resolves the issues related to the management of the DPVAT Insurance for 2023, a more solid and perennial definition on the operationalization and administration of the aforementioned mandatory insurance is still pending. There is an issue that was already in the regulator’s agenda during the former management of SUSEP and which will undoubtedly be a challenge for the new management of the superintendence.
Lefosse’s Insurance, Reinsurance and Private Pensions Team closely monitors the changes that impact the Brazilian Market. For further clarification on this matter, or others that may be of interest to you, contact our professionals.
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