Quebec - Bill 74 An Act to amend various legislative provisions principally to tighten the regulation of the financial sector
Bill 74 was passed on December 3 and received Royal Assent on December 4, 2009.
There were a number of changes made to legislation by Bill 74. Some of the changes pertaining to Insurance are noted.
Ø Foreign Insurers: The Bill changes the Act Respecting Insurance such that insurers incorporated in jurisdictions outside of Quebec are subject to capital adequacy and maintenance of assets requirements. Every insurer must maintain adequate assets permitting the insurer to guarantee the execution of its obligations in Quebec.
Ø Motor Vehicle Replacement Guarantees: The Act respecting the distribution of financial products and services (ARDFPS) is amended such that replacement insurance is an insurance product that can be distributed with a distribution guide.
Ø Enforcement: The Act allows for significant administrative monetary penalties for non-compliance under the ARDFPS of up to $2,000,000.
Ø Distribution without a representative: Regulation making powers have been enhanced to allow for regulations respecting: (1) the procedure for filing and reviewing distribution guides (2) the nature, form and tenor of a compliance manual, a list of insurance product distributors and a distribution guide; (3) the information that must be provided to a client by a person who distributes an insurance product on behalf of a distributor and the manner in which it must be provided; (4) the steps a distributor must take to ensure that every person assigned to distributing an insurance product is sufficiently familiar with it; and (5) the measures an insurer must take to ensure that its distributors are sufficiently familiar with any insurance product they offer.
The Act repeals the clause requiring distributors to explain the claims process and the timeframe in which an insurer must pay the claims.
The insurer is liable for the distributor's non-compliance if the insurer fails to comply with the Act or the regulation on distribution without a representative.
