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Court rules damage insurance consultants must register with AMF

January 20, 2014

MONTREAL , Jan. 20, 2014 /CNW Telbec/ - In a judgment handed down in November 2013 , the Honourable Justice of the Peace Monique Perron of the Court of QuÉbec (district of Drummond ) confirmed that independent risk management advisers (or damage insurance consultants) are governed by An Act respecting the distribution of financial products and services (the Distribution Act) and that they must be duly registered with the AutoritÉ des marchÉs financiers (the "AMF") when carrying on advisory activities related to insurance product offerings. This judgment is further to a penal proceeding launched by the AMF in 2012 against damage insurance consultants acting as a damage insurance firm, 9111-3258 QuÉbec inc., carrying on business as Claude Descheneaux Consultant. The AMF had informed these advisers/consultants in 2009 of the requirement to hold a certificate for the purpose of pursuing their activities. This judgment confirms that the practice of damage insurance consultants includes activities which are reserved for registered firms and representatives. Their argument that they did not need to be registered since they did not "sell" insurance as such was not accepted by the court. Reminder for insurance professionals In its judgment, the Court [translation] " questions practices which lead an insurance representative, agent or dealer to deal with an intermediary without speaking directly to the client ." Justice Perron pointed out that the law [translation] " imposes the responsibility to ensure that the client has sufficient coverage and the duty to explain the proposed product to the client before the contract is entered into. This responsibility cannot be transferred or shared. A person cannot be released from this responsibility merely because the information provided derives from an independent third party ." The Court [translation] " asks insurance professionals to be vigilant and, where applicable, to change their practices to comply with their professional and ethical duties and obligations. " The AMF expects professionals concerned to comply with the Distribution Act and intends to take appropriate measures to ensure such compliance. The AutoritÉ des marchÉs financiers (the "AMF") is the regulatory and oversight body for QuÉbec's financial sector. Information: Media only: Sylvain ThÉberge: 514-940-2176 Information Centre : QuÉbec City : 418-525-0337 MontrÉal : 514-395-0337 Toll-free: 1-877-525-0337 Twitter : @lautorite SOURCE AutoritÉ des marchÉs financiers

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Source: Canada Newswire

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