The Fonds d’indemnisation des services financiers (financial services compensation fund) was established in 1999 under the Act respecting the distribution of financial products and services. The fund compensates victims of fraud, fraudulent tactics (dishonest transactions) or embezzlement for which a firm, independent representative, independent partnership, mutual fund dealer or scholarship plan dealer is responsible.

The AMF is responsible for managing the amounts constituting the fund. The AMF keeps separate books in respect of such amounts and the costs incurred for the administration of the fund are paid out of the amounts constituting the fund. The assets of the fund are not part of the assets of the AMF. 

AMF undertakings

As trustee of the compensation fund, the AMF undertakes to:

  • award the mandate of measuring provisions to actuarial valuation specialists;
  • award the risk rating mandate to actuarial valuation specialists;
  • produce financial statements audited by the Auditor General of Québec;
  • award the management of the fund’s investments to an investment committee.

Representatives and firms covered by the fund

For compensation to be paid, fraud must have been committed by a representative or firm while pursuing activities under a licence issued by the AMF.

Title of representativeExamples of products and services offered

Financial security advisor

  • Life insurance policies
  • Annuity contracts
  • Segregated funds
  • All types of accident and sickness insurance contracts that may be offered by insurance representatives
  • GICs and term deposits

Accident and sickness insurance representative

  • Accident insurance
  • Sickness insurance
  • Salary insurance
  • Individual disability insurance

Group insurance and group annuity plans advisor

  • Group insurance or group annuity plans

Group insurance plans advisor

  • Group insurance plans

Group annuity plans advisor

 

  • Group annuity plans

 

Damage insurance representative

  • Home insurance
  • Automobile insurance
  • Replacement insurance
  • Liability insurance 

Claims adjuster

  • Claims adjustment services as part of damage insurance claims

Financial planner

  •  Financial planning services

Mutual fund dealer representative

  • Mutual fund units
  • Registered mutual funds
  • Mutual funds 

Scholarship plan dealer representative

  • Scholarship plan units

If the representatives listed above are attached to an insurance firm or independent partnership, mutual fund dealer or scholarship plan dealer, then the actions of those businesses, their officers and employees could also be covered by the fund.

Is your representative authorized to offer you the product?

Type of damage covered by the Fund

Financial loss that is directly related to fraud is covered by the fund.

Some indirect financial losses are not covered by the compensation fund. These include investment losses, redemption and account closing fees (except in certain cases) and unrealized returns.

Costs incurred by the claimant to file a compensation claim are not repaid and no compensation is payable for moral damages, stress, loss of enjoyment of life and disturbances and inconveniences.

Fund financing

The compensation fund has three sources of financing:

  1. Contributions paid by certain firms and representatives registered with the AMF
    These are representatives, firms and independent partnerships registered under the Act respecting the distribution of financial products and services as well as mutual fund dealers and scholarship plan dealers registered under the Securities Act.
Sector1Contribution
Annual contributions paid by representatives to the compensation fund by sector
Insurance of persons160 $
Group insurance of persons100 $  
Damage insurance160 $  
Claims adjustment100 $
Financial planning100 $  
Mutual fund brokerage160 $
Scholarship plans100 $

1If a representative operates in more than one sector, his or her contributions are discounted by $75 for each additional sector.

  1. Subrogation
    Where victims are compensated by the fund, some of their rights against the representative or firm at fault are assigned to the fund. The fund may then sue the persons responsible as if it itself was the victim, allowing it to sometimes recover all or some of the amounts of compensation paid to the victims.
  2. Returns on investments made by the fund
    All returns generated by the fund’s investments are paid to the fund.