The Insurance Legislative Bill No. 29/2017 is currently in process under the House of Representatives (House of Representatives Bill No. 29/2017), which, if approved, will substantially modify the statute of limitation rules related to insurance relations, with an impact on the provisions and technical reserves of insurers and reinsurers.
With regard to the claim of the insured against the insurer (and vice versa), the Civil Code currently in force in Brazil establishes, in art. 206, §1, II, that it shall be of 01 (one) year, counting from, in case of civil liability insurance, the date on which it is summoned to respond to the indemnification lawsuit proposed by the third party affected, or the date in which the latter is indemnified, with the consent of the insurer and, as for other insurance, the knowledge of the event generating the claim.
Notwithstanding the discussions about what would be the triggering event of the claim, in the case of insurances other than civil liability, the dominant understanding of the Brazilian Courts is in the sense that this would be the insurance claim, that is, the "occurrence of the covered risk during the term of the insurance plan". This understanding is settled, hence the Superior Court of Justice's Precedent 229, built after intense jurisprudential debates on the subject, recommends that "the request for payment of compensation to the insurer suspends the limitation period until the insured is aware of the decision".
In summary, therefore, there is currently a rule that the statutory period of 01 (one) year for the insured to file a suit against the insurer seeking to receive indemnity based on an insurance contract (other than civil liability) starts to count from the occurrence of the claim, suspending with the request for payment of indemnity to the insurer and returning to count (for the missing term) from the knowledge of the insurer’s decision.
Such rule, however, will be substantially altered if the mentioned Insurance Bill is approved, since art. 124, I, "e" of the aforementioned bill, establishes that "the insured party’s claim to demand indemnity payment, capital, mathematical reserve, overdue installments of temporary or life annuities, and refund of premium in its favor, prescribes in 01 (one) year upon receipt of the express and motivated refusal of the insurer".
It is extracted from that proposition that the deadline of 01 (one) year for the insured to file a suit against the insurer seeking the receipt of indemnification would only begin to count from the express and motivated refusal of contractual coverage, thus not being computed the period between the date of the claim and the date of the notice to the insurer, enabling the insured to be inert after the occurrence of the claim, for an indefinite period of time/which suits him best, since the limitation period only occurs after the insurer’s refusal of indemnification.
It is understood that the eventual legislative change, in this point, will consolidate serious legal instability, with a significant negative impact on the issue of technical provisions and reserves of insurers and, consequently, reinsurers, precisely because the initial term of the limitation would be at the sole and exclusive discretion of the insured, who is himself the holder of the claim for insurance indemnity and who, in theory, could wait as much as he wanted to notify the claim occurrence to the insurer (years even), regardless of a possible "delay" on his part that could influence the term of the prescriptive period and in its claim to insurance indemnity.
The insurers and reinsurers, as such, must maintain the technical provisions and reserves, without the possibility of canceling the claim, until the insured decides to notify them and until the period of 01 (one) year after the negative/refusal of the insurer to pay the indemnity sought. Before that, they will have the legal and financial burden of maintaining the provisions and technical reserves related to all the policies issued, which, in our opinion, is not reasonable and will certainly hinder the development and growth of the insurance and reinsurance market in Brazil, insofar as the increase in the financial cost of provisions and reserves will certainly be passed on to the insured, by increasing the value of the respective insurance premiums - premium increase = decrease in sales/business.
The Bill, in this regard, undeniably violates the legal and constitutional rules of reasonableness and security and stabilization of legal relations, on which the statute of limitation institute is based, which, in addition to negatively reflecting the development and growth of the insurance and reinsurance market in the country, persuades our view, that it should not be approved by the legislature.