December 20, 2018

Quebec: pared-down insurance sector reform

The adoption in June of Bill 141 concerning the financial sector marked a contrasting end to over eight months of legislative work seeking to modernize the legislative framework of Quebec’s financial sector and regulate the sale of insurance products online. The final version, which includes some of the provisions originally in Bill 150, is, as we predicted, significantly pared-down in comparison to its initial scope.

Certain key measures have been abandoned, such as the integration of the Chambre de l'assurance de dommages and the Chambre de la sécurité financière into the Autorité des marchés financiers. Moreover, certain changes appear to be essentially cosmetic, such as the name change from the Act respecting insurance to the Insurers Act.[1]  

There are some significant developments to report, however, including the possibility for insurers to sell insurance products online. There are now several provisions explicitly addressing the sale of insurance products “without the intermediary of a natural person”.[2] This new legislative framework is accompanied by certain obligations for insurers, including the obligation for insurers to provide the assistance of their representatives to potential clients upon request,[3] and the obligation for insurers to ensure compliance with their duty to inform in the course of concluding the contract.[4] These provisions will come into force on June 13, 2019.[5]

Also among the significant developments are the various measures intended to ensure greater transparency of the insurance market through amendments or additions to the Act respecting the distribution of financial products and services. In this regard, the new version of section 38 of the Act requires brokers who offer insurance products directly to the public to “be able to obtain quotes from at least three insurers who do not belong to the same financial group”.[6] Also of note are the new obligations arising from section 83.1 of the Act, particularly the requirement for insurance brokers and agents to disclose to their clients the names of the insurers for which they offers insurance products, and specifically in the case of brokers, the obligation to disclose their relationships with specific insurers.[7] These new provisions will come into force on December 13, 2019.[8]

Finally, it should be noted that in view of the many regulatory adjustments still to come and the gradual coming into force of Bill 141, some uncertainty remains in regard to the actual scope of the changes brought about by this reform. 

[1] Bill141, s. 3.

[2] Bill141, s. 3 “ss. 59 and 67” and s. 525.

[3] Bill 141, s. 525.

[4] Bill 141, s. 3 “ss. 62 para. 1(1) and 62 para. 2”.

[5] Bill 141, s. 814(4).

[6] Bill 141, s. 517.

[7] Bill 141, s. 531.

[8] Bill 141, s. 814(5).