May 15, 2019
The Quebec government today published a new regulation under an Act respecting the distribution of financial products and services (the “Distribution Act”), titled Regulation respecting Alternative Distribution Methods (the “Distribution Reg”). The Distribution Reg addresses issues related to (i) the sale of insurance over the internet without the intermediary of a natural person, and (ii) the offering of insurance products through distributors. With certain exceptions, the provisions of the Distribution Reg will come into effect on June 13, 2019.
With the publication of this new regulation, Quebec has taken the lead in setting clear expectations and standards for insurance intermediaries wanting to offer insurance products over the internet without the necessary involvement of a natural person. A copy of the Distribution Reg is available here.
With respect to internet insurance offerings, the Distribution Reg sets out a number of requirements that must be satisfied by firms wishing to sell insurance through a digital space, including disclosure and record keeping requirements. It also requires firms to ensure that the website clearly makes visible to applicants at all times during the process, the means by which the applicant can interact with a representative. When an applicant wishes to speak with a representative and one is not immediately available, the firm must suspend the transaction.
Firms that intend to offer products and services over the internet without the intermediary of a natural person are required to disclose without delay upon such offering, to the Autorite des marches financiers (the “AMF”):
(1) the name given to the digital space, where this name differs from the name of the firm;
(2) the names of the products and the classes to which they are related or the nature of the financial services offered on the digital space;
(3) the hyperlink or any other means to access the digital space; and
(4) the insurers whose products are offered on the firm’s digital space, if applicable.
Firms must notify the AMF of any change to such information within 30 days of such change.
The firm must also disclose annually to the AMF, the number of financial plans prepared, claims settled and insurance policies issued, the amount of premiums written through the digital space and the number of cases where clients have cancelled their insurance contracts in accordance with section 64 of the Insurers Act (Quebec).
