The event aimed to discuss the impact of systemic corruption on government accounts and public works, debating how hiring insurance companies can mitigate such expenses. Those topics are covered in the Continuing Education Course in Law, Insurance, Reinsurance and Regulation, offered by the Rio de Janeiro Law School.

FGV´s Rio de Janeiro Law School hosted a lecture, on March 20, with lawyer Modesto Carvalhosa about “The performance bond agreement and anti-corruption efforts.” The event aimed to discuss the impact of systemic corruption on government accounts and public works, debating how hiring insurance companies can mitigate such expenses. Those topics are covered in the Continuing Education Course in Law, Insurance, Reinsurance and Regulation, offered by the Rio de Janeiro Law School.

According to Carvalhosa, the performance bond, created in the United States over 100 years ago, is a solution for recurrent corruption and overpricing in Brazilian public works. “With the performance bond agreement, insurance companies become a third party in a relationship that usually includes only the government and contractors. This breach in the direct intercession between contracting and contracted parties, through monitoring and auditing by insurance companies, enables the guarantee of project prices, quality and deadlines,” he said.

Carvalhosa also highlighted that the analysis of technical requirements, prior studies and materials used in this type of agreement are essential to ensure the quality of the work and prevent tragedies. “The most recent example was the collapse of the bicycle lane in São Conrado, in the South side of Rio de Janeiro, three months after its completion. The basic design of the construction, above the sea, did not provide for strong waves, and such mistake ultimately cost the lives of two people. A more detailed study could have prevented that accident,” said Carvalhosa.

The lecture, held at the FGV unit downtown Rio, gathered approximately 60 participants among students, lawyers and people interested in the topic. The event was also attended by Carlos Frederico Ferreira (President of insurance company Austral), who spoke about how the market views this type of insurance. “In addition to supervising the performance of the work, the insurance company also acts as a mediator in case of accidents and monitors contractual changes. So, when an accident happens, the insured party is aware and protected from the changes and their implications,” he said.

Go to the website to learn more about the courses (in Portuguese).

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