The Québécois motor vehicle agency, Autorité des marchés financiers ("AMF"), is shedding a light on motor vehicle replacement insurance distributors and damage insurance firms, issuing a firm warning that it will pursue violators of two recent statutes, reports
Lexology.
The regulation in question, An Act respecting insurance and An Act respecting the distribution of financial products and services, mandate that damage insurance be sold:
- By way of a licensed firm offering damage insurance
- From businesses who may not have a license but are authorized to sell insurance, such as motor vehicle dealers
In a Notice issued by the AMF in February, the agency announced that insurers and distributors had to meet certain requirements, such as informing the distributor about the product and ensuring that all transactions occur within the law.
In addition, the AMF laid out several provisions that it considers non-compliant among automobile dealers, including:
- Not telling customers when commissions surpass 30% of premiums
- Not providing a distribution guide
- Selling insurance related to civil liability and damage, which is relegated to certain agents and brokers only
A failure to abide by these measures will result in action by the AMF, which “may impose an administrative sanction or take penal proceedings against any person who fails to comply with these Acts [and] may also order an insurer to cease distributing an insurance product through distributors.”
