In a notice published on February 16, 2015, Quebec’s Autorité des marchés financiers (AMF) warns distributors, firms and insurers involved in the distribution of replacement insurance products against engaging in certain distribution practices that, in its opinion, are not in compliance with An Act respecting insurance (Quebec Insurance Act),An Act respecting the distribution of financial products and services(Quebec Distribution Act) and various notices published by the AMF on the same topic.
This notice follows the recent assessment of penalties, ranging from $10,000 to $45,000, against nine car dealerships and a damage insurance firm. The notice is also intended to make the public aware of certain non-compliant practices relating to the offering and sale of replacement insurance and to serve as a warning to insurers who offer such products through distributors.
The complete text of the notice, including a reminder of the provisions and guidelines applicable to insurers, particularly with respect to the training of distributors of replacement insurance products, as well as industry sound commercial practices and the Outsourcing Risk Management Guideline, can be found here.
Finally, the notice ends with the AMF stating that it intends to take the necessary measures to put an end to any practice that is not in compliance with the Quebec Insurance Act or the Quebec Distribution Act. As such, it may impose an administrative sanction or take penal proceedings against any person who fails to comply with these Acts.