On June 7, 2023, Québec’s Finance Minister tabled Bill 30, An Act to amend various provisions mainly with respect to the financial sector (“Bill 30”), in the National Assembly. The Bill amends the Insurers Act (chapter A-32.1) and the Act respecting the distribution of financial products and services (chapter D-9.2)[1] and will go through the various stages of the legislative process when the National Assembly reconvenes this fall. The main changes made by Bill 30 affecting the insurance industry are set out below.

Insurers Act

Reciprocal Unions and Insurance Associations

Bill 30 provides that an association formed under the Civil Code of Québec may apply to be regulated by the provisions of Title III of the Act in order to be able to carry on insurer activities as a Québec reciprocal union. Several provisions relating to how the reciprocal union is organized and when that regulation ceases to apply are introduced in Bill 30 and it is now specified that the authorization granted to a reciprocal union only allows it to insure its members. It should also be noted that the prohibition on the parties in the union from accepting a risk which would respectively oblige them to pay, after reinsurance, an amount that exceeds 10% of the net value of their assets, has been removed.

Life Insurers

Bill 30 imposes an obligation on a life insurer to take the means necessary to (i) obtain information enabling it to know whether the sum it has committed to pay under an individual life insurance contract is payable;[2] and (ii) inform beneficiaries about it where they have not claimed it for the three years since the date it became payable. The insurer must also support the beneficiaries in justifying their claim.

Review of an Authorization

Bill 30 no longer requires the Autorité des marchés financiers (the “Authority”) to systematically review an authorization issued to an authorized insurer in the event that the insurer becomes the holder of control of a group, when the transaction does not have a significant effect on it. In this case, only a notice to the Authority is required. As with asset acquisitions, Bill 30 states that an acquisition of control of a group is deemed not to have a significant effect on the insurer if it does not result in a change of more than 5% in its assets.

Act respecting the distribution of financial products and services

Distribution Other Than Through a Representative

Bill 30, as introduced, removes the authorization that currently allows the distribution of replacement insurance relating to a vehicle by a distributor without an insurance representative (for example, new and used automobile, recreational vehicle and leisure vehicle dealers). It should be noted that distribution without a representative occupies a major position in the replacement insurance market in Québec.[3]

Additionally, in order for a life, health or employment insurance contract to be underwritten through a distributor, the premium must be paid at least once a year.

Person Acting Under the Supervision of a Claims Adjuster

Bill 30 provides that in certain situations and under certain conditions, a person may now carry on activities under the supervision of a claims adjuster without holding a claims adjuster’s certificate.[4] This exception applies to (i) a person domiciled in Canada who, (ii) solely by means of information technologies and (iii) only in respect of automobile claims determined by government regulation or for settlement of claims not exceeding a maximum amount prescribed by such a regulation, (iv) carries out one of the functions of a claims adjuster under the supervision of an independent representative or a claims adjuster who acts on behalf of the registrant.

We would also point out that the restriction stating that a claims adjuster may not be authorized to act in a sector other than claims adjustment has been removed from Bill 30.

Recovery of Monetary Administrative Penalties

Bill 30 now holds the directors and officers of the party responsible for a failure to comply solidarily liable with that party for the payment of an administrative monetary penalty, unless the directors or officers can establish that they exercised due care and diligence to prevent the failure. Payment of the penalty is now secured by a legal hypothec on the property of the debtor (the party responsible for the failure to comply and the directors and officers who are solidarily liable for payment). Bill 30 also includes provisions for the recovery of these amounts by the Authority.

Penalties and Orders of the Financial Markets Administrative Tribunal

Bill 30 now gives the Financial Markets Administrative Tribunal (the “Tribunal”) the power to impose an administrative penalty of up to $2,000,000 on any person who has, by an act or omission, contravened or aided in the contravention of a provision of the Act respecting the distribution of financial products and services. It also allows the Tribunal to order any person not to dispose of funds, securities or other property acquired for unreasonable consideration.