Main developments


On 11 April 2022, the insurance regulator (SUSEP) issued Circular 662/2022 (the Circular), which entered into force on 2 May 2022. The Circular provides a new framework for surety insurance in Brazil. It was issued after two rounds of consultations with the market (public consultations 24/2021 and 40/2021), which led to improvements and adjustments to the original draft, based on feedback from the market.

Under the new regime, there is no longer an obligation on the parties to a surety contract to be bound by the SUSEP standard wording. Leaving no scope for doubt, Circular 662/2022 expressly revokes Circulars 477/2013 and 577/2018, which regulated surety insurance and contained the revoked standard wording as an appendix.

Article 34 of Circular 662/2022 provides that the Circular has limited applicability to the large risks sector, which is defined and regulated by CNSP Resolution 407/2021 (for further details please see "Resolution 407 provides P&T underwriters with freedom to contract on bespoke policy wordings"). Only articles 2 and 3 are mandatory for the large risks sector, with the other provisions of the Circular being optional.

Articles 2 and 3 contain definitions which are applicable to surety contracts (eg, obligee, principal, loss and main object (article 2)) and a definition of the objective of surety insurance (article 3). Freedom of contract in the large risks surety sector is therefore widely preserved. The most innovative definition is that of "main object", which is:

the legal relationship, whether contractual, bid noticing (tender), procedural or of any other nature, generating obligations and rights between the obligee and the principal, irrespective of the denomination used.

Main developments

The main developments introduced by Circular 662/2022 are as follows:

  • Policy periods should follow the duration of the guaranteed obligation, unless the contract and/or statutory provisions determine otherwise. If they do not, the insurer must continue to provide cover throughout the period in which the risk is active and create mechanisms to renew the policy periods accordingly (articles 7, 8 and 9).
  • The guarantee can be limited to certain obligations of the main object and is not required to cover 100% of the obligations contained therein. However, any limitations of cover negotiated by the parties need to be included clearly and objectively in the policy wording (article 5).
  • If the main object is altered, the policy must be amended accordingly, if such alterations were envisaged in the main object, arise from a statutory obligation or were provided for in the documents which led underwriters to accept the risk; or, alternatively, if the insurer accepts the alteration (articles 10 and 11).
  • The procedures to report amendments to the main object must be clearly stated in the policy. If such amendments are not properly articulated to the insurer in the manner provided for in the policy, it will be open to the insurer to pull cover if, simultaneously, the risk is aggravated, the amendment is directly related to the loss and the insurer can evidence that the assured acted in bad faith in failing to report the amendment to the main object (article 11).
  • Excesses and deductibles are now allowed, including grace periods, representing a change in approach from the regime prescribed in Circulars 477/2013 and 577/2018 (article 14).
  • Third parties can now be included in the policy as beneficiaries, in accordance with the main object and relevant statutory provisions if default on the part of the principal causes them damage (article 15).
  • If the policy provides for the possibility of notification of an expected loss, the policy wording must clearly describe the act or fact that amounts to an expected loss and whether its notification is mandatory to the insurer, as well as the criteria for the notification (article 17).
  • The burden of evidencing the default of the principal falls to the obligee and not the insurer, unless otherwise provided for in the main object or specific legislation (article 18).
  • If expressly agreed by the parties in advance, the surety contract may provide the possibility or the obligation of the insurer to:
    • monitor and/or inspect the main object;
    • act as mediator of the default or of any other conflict between the obligee and the principal; or
    • to provide support and assistance to the principal (article 29).


The contents of Circular 662/2022 should be read in the context of the principles set out in the Economic Freedom Act (Federal Law 13,874/2019) and the wider efforts of SUSEP to modernise the Brazilian market's regulatory landscape. SUSEP has recently sought to reduce regulatory constraints on local and international players and to move away from the previous model of mandatory standardised SUSEP-issued wordings for insurance products.

The new rules provide the framework for new wordings, leaving scope for contractual freedom and the parties' ability to tailor the policy to their needs and the characteristics of the risk, the assured interest and the underlying main object, while keeping a minimum set of fundamental requirements for a surety policy.

This is also in line with Federal Law 14,133/2021, which regulates public tenders. In particular, article 2 of the Circular defines a subgenre of surety insurance (ie, Surety Insurance: Obligee – Public Sector). In this sense, the Circular aims to cater for the specificities of guaranteeing contracts entered into with the government and the special conditions, which are typical of administrative (as opposed to business or civil) law.

The Circular is a welcome development, as it provides more clarity to the rules applicable to surety, enhancing the ability of the parties to exercise their freedom of contract, while leaving the adoption of such rules optional in the large risks sector.

For further information on this topic please contact Geoffrey Conlin or Bernardo de Senna at CAL - Costa, Albino & Lasalvia Advogados by telephone (+55 11 3179 2900) or email ([email protected] or [email protected]). The CAL - Costa, Albino & Lasalvia Advogados website can be accessed at