On 17 October 2016, the Brazilian Private Insurance Agency (SUSEP) issued Circular no. 541/2016, establishing new rules for D&O Insurance in Brazil.

The most relevant changes brought in by the rules relate to coverage for defence costs and for fines and penalties. Defence costs and attorney fees, which previously formed part of basic D&O cover, will now fall within additional cover which must be offered by insurers. SUSEP authorises insurers to offer cover for fines and contractual and administrative penalties, a recurrent subject of discussion in Brazil, but it is unclear whether these will fall within basic or additional cover.

The rules also require that D&O policies are issued to legal entities (the policyholder) for the benefit of their directors and officers. This prevents insurers from providing direct cover to directors and officers in the event their company does not purchase cover on their behalf.

The rules require that policies are issued on a claims-made basis, and shall not cover damages insured under General, Professional or Environmental Liability policies. Lastly, it is prohibited for policies to refer to any foreign legislation unless it is already used in the Brazilian insurance market and it is translated.

Insurers who already operate in the Brazilian D&O insurance market have until 28 February 2017 to ensure that their D&O policies comply with the new rules. Insurance contracts that were in force on the date the rule was published will terminate on 1 June 2017. Policies on risk until 31 May 2017 may be renewed only once, for one year and policies which cover risks beyond the period ending 31 May 2017 cannot be renewed.